The Essentials of Field Service Maintenance Agreements

Using maintenance agreements has become the standard for businesses in the field service industry. They excel at minimizing slow periods and help your company create recurring revenue all year round.

For electrical, plumbing, HVAC—or any other field service business sending technicians into the field for routine maintenance or repairs—maintenance agreements present an opportunity to build a loyal client base and secure work outside of the busy season.

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Take a few moments and read through everything you need to know about maintenance agreements, their importance, and how to take advantage of them. The sooner you can start getting clients under contract, the faster you’ll see profits rise.

What are Maintenance Agreements? 

Maintenance Agreements (also known as service agreements or maintenance contracts) are legally binding arrangements between service providers and clients that outline the terms and conditions for ongoing maintenance and support services.

Field service maintenance agreements are designed to:

• Outline the scope of services, response times, scheduled maintenance visits, and any exclusions or other terms required for the contract.
  
• Provide a clear framework for service providers and clients to reference when working together.
  
• Ensure businesses actively monitor and address equipment issues for optimal performance.

With the right software, maintenance agreements can easily be customized and managed while catering to specific equipment types, industries, and client needs. 

The Importance of Maintenance Agreements

Maintenance agreements are the fastest way to build a recurring revenue stream and grow your business in all aspects. 

But when you proactively approach your clients with a solution that addresses their current and future needs – they’ll be confident when it comes to signing a maintenance agreement with your company for recurring services. 

Beyond just addressing client needs, they let your business predict, track, and improve internal processes and overall operations. Field service maintenance agreements can help you stand out and secure revenue in this very competitive market. 

5 Major Benefits of Maintenance Agreements

While one-off jobs are great for the company, it can be hard to predict the future if your schedule isn’t already full. 

Below are three great reasons why trade businesses should strive to get more of their client base signed up for monthly or annual service maintenance agreements: 

Improved Customer Service and Loyalty

A formal contract between provider and client provides peace of mind. This is what any home or business owner is seeking when they think about the upkeep of their home, or repairs that may be needed at different properties, or warehouses. 

If your company is properly set up to offer and manage field service maintenance agreements, the word will get out about how great it is to work with your business. 

Paired with the right customer self-service platform, your clients can have around-the-clock access to the information and services they signed up for. This creates an additional opportunity to build long-term customer relationships that will use your services for many years to come. 

Better Budgeting 

You should have a deep understanding of your finances already. An article from Forbes stated, “If you’re lost when it comes to proper accounting and business funds or resource management, you might find yourself unable to invest in or grow your business.” 

But when you can accurately calculate your revenue based on the recurring maintenance contracts you have in place, getting payments, ordering and tracking inventory, and handling revenue leakage becomes even easier and much more straightforward. 

With the right budget and systems in place, you’re already in a position to scale your operations, take on a higher volume of jobs, and potentially expand into new markets. 

Extended Product Lifespans 

Waiting until something breaks to get it serviced isn’t a logical option for the customer base that needs consistency in their life. 

Having the ability to monitor live equipment and provide upkeep for clients before it’s too late will help you maintain a strong working relationship and keep them coming back to your business. 

When your products get the regular service they need (thanks to your service maintenance agreements) you’ll be able to extend their lifespan and save your clients even more money in the long run. 

On top of that, you’ll build a priceless trust with clients and they’ll always know they can turn to your business with any additional work they need done. 

Easy Scheduling

When new clients sign up for your recurring services, they’ll gain access to your customer portal and be able to schedule services when it best suits them. On top of that, it’ll take the stress of scheduling off of your administration team.

With the right service scheduling software in place, jobs can be automatically scheduled and optimally routed to help save you time on travel and money on gas.

Building Recurring Revenue Streams

In addition to your busy regular schedule of one time jobs or callouts, you can build a schedule around your contracted clients during the slow season and start generating year-round recurring revenue.

This will help improve cash flow, increase overall profits, and keep your field service technician team from having too much down time.

How to Create a Service Maintenance Agreement or Contract

Crafting an effective service maintenance agreement requires a thorough understanding of your client’s needs and a strategic approach to addressing potential challenges. 

Planned maintenance software can help your team create and manage agreements.

The five sections below will help guide you in the right direction when creating a field service maintenance agreement or contract: 

Finding the Right Price

Finding the right price for your services can be a challenge. You have to think about your bottom line, the demographics of your market, and your competitors’ prices. 

We’ve found that utilizing a good, better, best pricing strategy is an inclusive way to provide your services to the widest possible audience. 

The more data you collect and analyze with your software, the easier it becomes to find the perfect price point for your products and services. 

Assessing Your Client’s Needs

Understanding the specific maintenance requirements and expectations of your clients as a whole can be tricky. 

Sometimes there might even be a client that won’t be a good fit for a maintenance contract. 

For example – if you have a client that is constantly calling technicians out to their property for unnecessary or low-cost work, you could end up spending more on travel and labor than the profit a maintenance agreement can bring in. 

Once you fully understand the general needs of your client base, designing a contract that meets their desires becomes simple. This approach can even impact how you create a good, better, best pricing system with tiered options giving greater perks (i.e. Bronze = 2 callouts, Silver = 3, Gold = 5).

To help get you started, try thinking about the length of the policy that your clients would be most willing to commit to and what assets you might be servicing, too. 

Scope of Services

Deciding which of your services are included under your field service maintenance agreements should be driven by your budget and product costs. 

You’ll have to clearly define the services included in the agreement, such as routine maintenance, emergency repairs, or even software updates. 

There’s always room for negotiation within a contract on an individual basis. However, the accessible services and the frequency outlined in the contract should be the same for everyone under their tier of payment plan (if you have more than one pricing model). 

Renewal Policies 

Can you think of a time you signed up for a free trial and forgot to cancel it? Nobody likes when they’re surprised with another bill for an automatic subscription renewal. That’s why it’s important to include your renewal policy within the service contract and make it a point to clearly explain to customers how that process works. 

If you choose to automatically renew your clients in your service, you’ll need to have a system that notifies them with enough time, so that they can cancel if they would like to.  But if you’re doing this manually, you’ll know that this is a time-consuming process.

That’s where having automated alerts and notifications built into the contract management software can be a massive help. You’ll eliminate the worries related to chasing down signatures and easily stay on top of contract renewals. 

Terms and Conditions

With any legally binding document, it’s best to have a lawyer review the maintenance agreement or contract before finding clients to participate. 

Providing terms and conditions that comply with state and federal regulations is a must if you want to avoid lawsuits. 

Don’t forget to take the time and learn about each client before signing them to an extended contract or service agreement. 

Training Field Service Technicians to Upsell

While you shouldn’t expect your field service technicians to be the best salespeople on the market, they should have a solid understanding of the fundamentals. 

Since technicians are regularly face-to-face with clients and already have full knowledge of the maintenance agreements, they are the best ones to upsell a client on a recurring contract. 

Waiting till something needs repairs and neglecting regular service on your equipment or home can become much more costly. 

Having your techs break down the monthly costs for your recurring service programs compared to the costs of not having it over time is one way to sell clients on the need for a certified maintenance agreement. 

As the manager, having an impactful new hire training program and providing regular feedback as field technicians grow in their careers will give them the confidence they need to help you build an overflowing revenue stream. 

Using Administrative Staff to Sell Maintenance Agreements

If you don’t want to burden your technicians with selling in addition to their technical work, you can utilize your office staff instead! 

When a previous customer is due for maintenance or a recurring service – have your office or client services team call and suggest the idea of a maintenance agreement. 

Have them answer any questions and discuss the cost savings and benefits that come along with a contract. You can also reach out to new clients who have booked a job and make sure they’re aware of the options you have available. 

Some technicians might be comfortable and even look forward to increasing sales for the company, but others might prefer to not lose focus with a sales role on top of their current tasks.

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Using Commusoft to Manage Maintenance Agreements and Contracts

Commusoft is an off the shelf solution for all your maintenance agreement management needs. The structure is provided, you just need to input your terms and let the software do the rest.

To help centralize your business, we can even integrate with your current payment, accounting, and communication systems to make the transition straightforward and worthwhile.

Just like your clients get peace of mind by having a maintenance agreement, you’ll get peace of mind for your business by knowing you have an easily manageable recurring revenue source.