SECTION 8 OF 11
Are memberships worth the trouble? Absolutely, if you bust the myths
Is it worth the time and manpower required to sell memberships (service agreements)?
Absolutely, says Jaime DiDomenico, president of Cool Today, a 50-plus-year-old, multi-trade company based in Sarasota, Fla. DiDomenico built Cool Today into a $23 million business with a bottom line bolstered by 17,000 memberships. (That’s not a typo). Over the years, and across the trades, he says memberships have accounted for 20 to 40 percent of total revenue.
How? By delivering real value to customers through various membership programs.
DiDomenico mentions all the excuses he’s heard regarding the difficulty of selling memberships, including:
They’re hard to sell.
They only work as a discount.
They are not worth the time.
It’s easier to sell large ticket items.
They’re hard to manage.
You can’t get people to renew.
In each case, not true, he says. In 2009, after joining Nexstar, he boosted memberships from 5,000 to the 17,000-plus he has today. Revenue increases have been the result. His next goal: 20,000 memberships.
Plain and simple, relational customers—ones who purchase memberships—are worth more to your bottom line, DiDomenico says.
“Ask your techs if they know the difference between transactional and relational customers,” he says. “If they’re not sure, ask them if it’s tougher to sell a first-time customer or somebody who knows you and trusts you.”
At Cool Today, he says the average ticket for a transactional customer is $687. The average ticket at his company for a relational customer is $1,538.
At one point, DiDomenico did an accounting survey and found that customers who bought and renewed a membership at least two times accounted for nearly triple the revenue of first-time customers.
Breaking through the membership wall
Some contractors still run into problems building their membership base. In fact, ServiceTitan Director of Customer Experience Chris Hunter hit a wall at Hunter Super Techs, but found a way to break through.
He started by identifying the problems he faced:
Lack of Systems: Systems for recovering expiring members, failed charges, scheduling, tune-up procedures & how to present the club membership.
Money: It’s hard for people to write a check for the full agreement price up front, especially if they have multiple systems.
No Hook: Companies needed a marketable, compelling offer. If you don’t stand out, you get left out.
Techs: Some were good at getting them, some were not so good, and some didn’t seem to care.
Opportunities: We needed more and also to identify current ones.
Showing Value: The significance & value of how the club membership benefited the techs, the company and the customer were not clearly communicated.
“When I realized that this wall we were facing was my fault as the leader, it was painful,” Hunter says. “I was holding us back by not having the systems and processes in place my team needed to succeed.
“The good news is I knew it was fixable.”
Hunter Super Techs analyzed several successful companies and their membership plans and determined that processes were key. Systems are needed for all aspects of your club memberships.
The key elements of Hunter’s breakthrough:
System 1: Recover expiring memberships
Each month, assign someone in the office to work the list of memberships that expire that month. These are too valuable to just let them expire without a strong effort to retain them.
Also, consider leveraging ServiceTitan’s “membership protection plan,” which allows contractors to renew a customer’s expiring credit card automatically and avoid time spent calling customers for a new credit card number and expiration date.
System 2: Address failed recurring charges each month
Hunter Super Techs had worked hard to build memberships, but wasn’t always consistent in collecting the harvest. Assigning someone to address failed charges solved the problem—and provided an opportunity to go over benefits of the plan, address membership levels and service specials, and to schedule appointments. ServiceTitan Membership Protection, a premium service, addresses failed recurring charges automatically.
System 3: Schedule the tuneups and contact customers
Scheduling tuneups tied to memberships can be a struggle. Calls go unanswered—and then on the first hot or cold weekend, everyone would call wondering why their maintenance hadn’t been done. Hunter implemented “Important Reminder” postcards and emails (automated in Marketing Pro) to VIP club members early in the season, offering priority scheduling.
Hunter Super Techs was also strategic in planning. Knowing how many club membership calls needed to be run each month, the company used outbound targeting to fill capacity.
And the reminders solved the problem of customers saying they hadn’t been contacted about tuneups.
System 4: The perfect tuneup and checklist
Technicians need a systematic approach to doing calls, to build value with the homeowner and eliminate callbacks. Hunter put together a detailed technical checklist and 10 easy steps to success for techs to follow on every call, using forms triggered in ServiceTitan that are required service and club membership calls.
System 5: Follow up with customers who didn’t join
Thank customers for choosing your company, and ask why they didn’t invest in the membership. Offer to apply any discount they would have received toward their membership plan.
Table of Contents
2. Building a Company for Success
3. Setting Your Company Up for Success
4. Driving a Company Culture
5. Setting a Path to Maximum Profitability
6. Billing Structure: Determine Your Pricing
7. Marketing Practices
8. Call Center Practices
9. Call Center + Field Practices
10. Best Practices in the Field
11. Field + Office Best Practices
12. Keys to Success in the Office
13. Management and Office Best Practices
14. Human Resources
15. Preparing Your Company For Sale
16. Commercial Best Practices