How Contractors Manage Service Agreements

A great service agreement clearly defines what the customer gets - number of visits, what is inspected or serviced, response time guarantees, and any discounts on repairs. It should feel like a good deal for the customer while being profitable for you.

The best agreements balance enough value to attract sign-ups with enough margin to sustain your business.

Offer two or three tiers - basic, standard, and premium. Each tier adds more value and costs more. This gives customers choices and often pushes them toward the middle or premium tier.

Basic might include one annual visit. Standard includes two visits plus priority scheduling. Premium includes everything plus discounted repairs and parts coverage.

Every service call, installation, and customer interaction is an opportunity to sell a service agreement. After completing a repair, mention that a maintenance agreement would have caught the issue earlier and saved money.

Train your technicians to present agreements naturally as part of their customer interaction, not as a hard sell.

An agreement that expires without renewal is lost revenue. Track every agreement's expiration date and start the renewal process 60 to 90 days before it expires.

Automate renewal reminders and make the renewal process as simple as possible. Auto-renewal options can dramatically improve retention rates.

Track key metrics for your agreement program. Total agreements, renewal rate, average revenue per agreement, and conversion rate from service calls to new agreements. These metrics tell you if your program is growing and healthy.

Set goals for agreement growth and hold your team accountable for selling and renewing.