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Maintenance Agreements in 2024 | The Ultimate Guide to Profit

November 30th, 2023
13 Min Read

Home maintenance contracts, often sold as service agreements or club memberships, generate guaranteed, recurring revenue for home service businesses. Maintenance agreements provide homeowners with the peace of mind that your company will show up if something breaks and maintain their equipment to prevent major problems. 

For HVAC, electrical, plumbing, and other types of contractors who perform repairs and routine home maintenance, an annual or monthly preventive maintenance contract guarantees future billable work in a market that's hard to predict (and very competitive). It’s also a way to book more time in a customer’s home, build brand loyalty, and give homeowners discounted or exclusive access to your services. 

Is your home service business properly utilizing service agreements? Could your field technicians sell more of them? Does your team know how to successfully pitch memberships and contracts to customers?

In this guide to home maintenance contracts, we give tips on how to sell service agreements and examine the ways modern service agreement software can help your business revamp its approach.

Then, we’ll explain how our software, ServiceTitan, helps commercial and residential home services businesses:

  • Create and customize maintenance agreements for all of your customers.

  • Schedule and organize customer appointments to fulfill your service agreements.

  • Set up automatic billing and membership renewals to receive payments on time and flag customers who need to upgrade or renew.

  • Track how memberships are performing so you can increase customer satisfaction and maximize profit.

Table of Contents

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What is a Maintenance Agreement?

In simple terms, a maintenance agreement sets out the steps a contractor will take to maintain, repair, and service a customer’s equipment or property. The terms are agreed between the two parties to ensure the equipment continues to operate satisfactorily. 

Maintenance agreements typically include clauses referencing:

  • Responsibility: A description of the contractor’s responsibilities for the term of the agreement.

  • Timescale: The length of the agreement and how it can be terminated.

  • Payment: Payment terms and amounts.

Reasons for Pursuing Home Service Contracts

  • Maintenance agreements generate predictable, recurring revenue during slower seasons.

  • Monthly maintenance contracts allow techs to regularly check a customer’s equipment or systems and address minor issues before they become expensive problems.

  • Equipment-based contracts sold with new equipment ensures scheduled maintenance service to protect their investment and your company’s reputation

  • Home maintenance contracts give more opportunities to engage loyal customers, build the brand and the client relationship, identify potential sales opportunities, and earn referrals.

Field service management software means your techs know the right time and the right way to pitch a service club membership, while having mobile technology that makes signing up and setting recurring payments quick and easy.

Why Selling Service Maintenance Agreements Is Important

There are two key areas where service maintenance agreements help:

1. Increase Predictable Revenue 

As a service provider, you already know there are busy times when the phone rings off the hook and other slower periods when jobs become scarce. In some service industries, like HVAC and plumbing, these peaks and lulls change with the season, but every business must weather slow periods when revenue can rapidly dwindle.

Maintenance contracts help stabilize revenue during these slow times and grow your customer base. By scheduling routine maintenance and checking in on existing customers, you can maintain a stream of billable preventive services—even when homeowners aren’t calling you with an urgent issue. 

Train your technicians to catch potential problems that homeowners should take care of immediately—before they become a larger, more expensive issue in the future—and discover opportunities to upsell accessories or additional services.

2. Improve Customer Satisfaction

Annual maintenance service agreements mean your company must stay aware of your customers' needs, and that kind of attentive customer service gives you more opportunities to impress, service, and satisfy homeowners.

Train your technician team to engage with customers and listen to their questions and concerns during scheduled check-ups and maintenance. Time spent talking face-to-face with customers provides extremely valuable feedback and reassures them that your company cares. A monthly maintenance contract generates more of these opportunities to build a good rapport with homeowners and inspires loyalty to your brand.

Creating Your Home Maintenance Agreements

Whether you want to revamp your current service agreements or introduce home maintenance contracts to your customer base for the first time, keep in mind these specific principles to ensure these offerings mutually benefit both you and your customers:

  • Charge the right price. This varies, based on your market, competitors, and the specifics of your own business. Bottom line: You want to crunch enough of your own numbers to make sure service agreements prove profitable for your business and don't end up being costly or wasteful.

  • Set the right contract terms. Many home service agreements last for 12 months—others work on a month-by-month basis as a monthly maintenance contract (read more about renewal policies below). You want to find a policy term that appeals to homeowners who are willing to try out a contract agreement but don't want a major commitment.

  • Determine a renewal policy. If you opt for an automatic renewal policy for your home service agreements, you’ll want to make that clear to homeowners as they sign up. Establish an automated notification system that sends homeowners a reminder in the weeks prior to the auto-renewal. Transparency builds trust with customers—and modern consumers expect a digital reminder from companies.

  • Do your due diligence. Maintenance agreements shouldn't be extended to homeowners until your team obtains detailed information about their equipment and property. If your company installs new equipment, make sure to attach an equipment-based contract to that specific unit and log the serial number in your digital records. 

Generally speaking, it’s best to fully examine the working condition of a homeowner's HVAC technology, plumbing, electrical system, etc. before extending a service agreement to the customer. Too many service visits to remedy repeat repair and breakdown issues won’t be cost-effective for your company. Consider setting a limit of appointments per contract period and specify what services the maintenance plan covers.

Helping Your Field Techs Succeed at Selling Service Memberships

Your field technicians bear most of the burden of pitching and selling a home maintenance contract to your customers. Many techs entered the skilled trades because they enjoy working with their hands and helping people—not because they wanted to be salespeople. 

However, you can give your on-site team the mobile technology and sales tools to approach this process with confidence. Build in a discount so techs can easily show the customer a digital estimate that calculates how much money the membership potentially saves them on service calls and equipment deals. 

“I’d hate to be offering a membership program and not have my company on ServiceTitan,” says Joshua Campbell, co-founder of Rescue Air Heating & Cooling in Texas. “You hit a button and put it on recurring’s about getting those visits. Those customers build trust in you.” 

Keep your pitch simple and short. Neither your customers nor your techs want to be burdened with an awkward, prolonged sales situation, so make sure your techs know how to speak about your maintenance programs with a succinct sales presentation that highlights homeowner benefits.

You also want your team to identify the ideal opportunities to pitch your company’s club membership or maintenance contract. Not every house call presents an opportunity to sell a service agreement, but techs should be aware of situations where they do appeal to homeowners and make financial sense for the business. 

For instance, if your company offers free inspections on initial visits, use these thorough inspections to help uncover current or potential issues the homeowner may not know about. Advise solutions to help them remedy over a period of time or stay on top of the problem with a monthly maintenance contract.

With an intuitive, cloud-based mobile app in the field like ServiceTitan Mobile 2.0, you can utilize a customizable service agreement template with just a few quick taps on a tablet and make the membership forms a mandatory part of certain service calls—ensuring your techs always know the right time and situation to pitch a home maintenance contract to a customer.

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How ServiceTitan Helps Home Services Businesses Sell and Implement Maintenance Agreements

In the next section, we’ll explain how our best-in-class field management software, ServiceTitan, helps home services businesses create and facilitate successful maintenance agreements that increase revenue and boost customer satisfaction. 

Set Up and Customize Membership Agreements

With ServiceTitan, you can create membership agreements from scratch or you can adapt and improve  an existing agreement if you’re already using one that works for you.

Companies can select agreements from a wide range of templates and set up and store as many as needed to suit different membership types. 

Each template is fully customizable with a menu of recurring services including the number of visits to be undertaken for specific services on each call. You can record all the key details for each contract, including:

  • Contact information

  • Membership type

  • Duration of agreement

  • Recurring service types and frequency (monthly, annually, etc.)

  • Billing frequency and pricing

Agreements are easy to set up and, once up and running, can be integrated with other ServiceTitan tools such as scheduling, executing jobs, and estimates. You can even tie agreements to individual pieces of equipment so there’s no confusion about what needs servicing. 

If you already have an agreement that you like, we can help import existing data and you can create a custom template using your existing agreement that makes it easier to execute. The flexibility of being able to create new agreements or customize existing contracts lets companies tailor maintenance agreements to suit every customer — commercial or residential. 

Since everything is centralized, contracts can be viewed by office staff (via our desktop app) and by field technicians (via our mobile app). So, techs have all the information they need when they’re out on a service call (such as the service type required and equipment details) and can update information on the fly. 

Let’s take a look at how ServiceTitan memberships connect to other operational workflows.

Schedule Regular Service Visits

When you set up recurring service events in your membership agreement, they are automatically added to the schedule based on the frequency you defined. So, office staff don’t need to spend time adding jobs manually and none are missed. 

The schedule can be viewed by date range, and office staff can then contact customers and book service visits. The job will then be assigned to a technician who can see the details on their schedule—via the dispatch board

You can also include info such as, “Preferred Technician” and leave notes within a job, for example, about quantities of materials required or if a customer isn’t ready to book a job. This means office staff and technicians are up-to-date on what’s needed for each service call and whether it requires following up. 

Maximize Your Technician’s Efficiency with ServiceTitan’s Productivity Tools

ServiceTitan offers several tools that work in tandem with your membership agreements to ensure technicians have everything at their fingertips when they’re on site (via our mobile app).

Access to Job Histories

Technicians don’t need to contact the office for customer information. They have access to the complete job history, including:

  • Existing equipment (e.g. HVAC system)

  • Previous estimates and invoices

  • Recurring services and dates when they took place

  • Any specific job notes

  • Photos and videos

Having all of these details on hand not only saves time and prevents delays, but it improves the customer experience

Access to Maintenance Checklists

Using ServiceTitan’s custom forms feature, you can create maintenance checklists for technicians to refer to and complete when out on service visits. These ensure that no steps are missed during a visit and provide a record of the work undertaken. 

For example, an HVAC maintenance company performing a service on an air conditioning system might include elements such as:

  • Air intake

  • HVAC piping

  • Humidifiers

  • Controls

  • Air filters 

  • Fan functionality

  • And more

These lists can be duplicated and adapted for different jobs and are useful to show the customer that each element has been checked, should an issue arise.

Access to Warranty Details and Replacement Part Information

All warranty information can easily be stored within ServiceTitan after any new equipment is installed. This information can be pulled up if a technician encounters an issue and needs guidance on next steps — such as whether the equipment is still under warranty and/or the procedure for ordering a replacement part. Technicians can initiate an order directly from their tablet, and this can be followed up by office or warehouse staff.

Ability to Produce Estimates from the Field

Technicians can create estimates for resolving issues or for changing or upgrading a maintenance agreement when they are on a service visit. 

For resolving a problem, technicians can select the equipment and materials needed from ServiceTitan’s integrated pricebook, and create an estimate on site. Customers can view the estimate on the tablet or it can be emailed for approval. Technicians can also upload details of the issue (photos, notes, etc.) and request that the office create the estimate in real time. Both methods save the unnecessary “back-and-forth” between the technician, the office, and the customer—which is especially important if the work is urgent.

Technicians can also use these features to follow up on open estimates with customers and to upgrade customers to new membership plans, which helps close more deals and increase profits.

Set Up Automatic Billing and Membership Renewals

ServiceTitan makes billing and automatic membership renewals quick and easy by organizing customers by membership expiration date so you can stay on top of who’s due to renew or upgrade.

Automatic Billing Rules

Once you’ve defined the billing frequency in the membership set up, ServiceTitan will automatically send invoices within the specified time frame (e.g. monthly, quarterly, etc.). 

You can also select an invoice template and specify preferences for pricing, discounts, and customer-specific pricing (for commercial businesses). 

This is a massive timesaver, as payments will run automatically and all you’ll need to follow up on is a failed payment or customers who prefer to pay by mail/check. 

Business owners can view a master list that shows the status of every membership account, including the payment status. This is a useful barometer for how much revenue they’re bringing in. Plus, you can utilize ServiceTitan’s integration with QuickBooks, which allows contractors to run a revenue recognition model. 

Membership Renewal Protection

Users can also opt for ServiceTitan’s membership renewal protection tool. This automatically checks and updates credit card details and prevents companies from having to contact customers for their information (and also avoids a potential cancellation opportunity).

Track Maintenance Agreement Performance

As well as creating service agreements, ServiceTitan provides deep reporting insights into how those agreements are performing. Users can review two key areas: customer memberships and recurring services.

You can filter using dozens of KPIs to see what’s working (and what needs improving) with your current membership programs and services. 

Data sets include:  

  • Response times

  • Emergency service requests

  • Number of memberships renewed

  • Number of memberships expired

  • Number of memberships canceled

This information allows businesses to analyze data at a granular level to see how memberships are helping drive revenue. 

Home services businesses can also use ServiceTitan’s Marketing Pro feature to further tailor marketing activities based on these KPIs. This upgrade allows you to determine the best way to communicate with target audiences (e.g. via email) and can even prioritize customers who are most likely to invest in a big-ticket order.

HVAC Service Contractor Review: Hunter Heat & Air

“I really love how easy it made our service agreement program,” says Chris Hunter, President of Hunter Heat & Air. 

Hunter, who co-owns Go Time Success Group, recently joined ServiceTitan as Director of Customer Relations to lend his “voice of the contractor” experience after running an HVAC business for nearly 15 years. 

The ServiceTitan software suite automates maintenance appointment scheduling, develops targeted marketing email campaigns geared toward renewal and new customers, and delivers reporting on home maintenance contracts and memberships to ensure companies can see the profit and customer-base growth driven by service agreements.

“Service agreements used to be a nightmare to manage, and now it is so easy that we have more than doubled our agreements!” Hunter says.

Set Up Your Maintenance Agreements with ServiceTitan

ServiceTitan is a comprehensive software solution built specifically to help service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. 

Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and it increases revenue by an average of 25% in just the first year.

To see how ServiceTitan can help you create maintenance agreements for your home services business and streamline your operations to maximize profits, sign up for a free demo now.

ServiceTitan Software

ServiceTitan is a comprehensive software solution built specifically to help service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.

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