Loyalty programs are tricky. If your experience with loyalty programs has been anything like mine, there have been occasions where the loyalty program was such a pain that it actually deterred me from using a retailer I'd been using before they came up with their loyalty program.
It's difficult to get a loyalty program going in HVAC. People aren't going to suddenly get motivated to buy some Indoor Air Quality products, a new system, or book a service call just because you're running a special.
Onetime promotions do not, as a rule, generate loyalty.
My experience has been that running a special on replacement equipment only works when you advertise it and people who are already getting estimates see your ad and call you.
A special on replacement equipment is helpful when you're presenting someone without a major urgent need a repair vs. replace option. If they honestly believe that they'll have to replace within a short period of time, and there's a savings by replacing now, it may push them over the edge. The same thing with IAQ. If they're replacing their equipment, and there's a financial incentive to add IAQ, they might go ahead and do it, but none of that will generate long-term loyalty.
A loyalty program must provide long-term benefits for the consumer.
Here are some of the programs I've used to generate loyalty from existing customers and, in some cases, even generate new customers:
The "Family" Service Agreement
We're talking about your standard-issue Maintenance Agreement that includes annual routine maintenance and service at a discount, as well as priority service, but no free repairs.
The "family" service agreement is three times the price of a normal single-family service agreement, and can include all the households of a family that is located within your market area. You can put a limit as to the number of households that can be included if you so desire.
Some contractors reading this will say that if a customer has five or six families living in the area they don't want to go to all those extra homes and do maintenance on them for free. That's short-sighted. You don't do maintenance to get the discounted money for the service agreement. You do the maintenance to get into the home and inspect equipment that probably has not been kept maintained, that probably needs a lot of work, and some of which will need replacing.
One of the most successful contractors I know will cover every system in a home (the average number of systems in a home in his area is 2.4) for a total $79 per house. I can assure you that I have seen first-hand how this has worked for him for at least the last 12 years.
Obviously, this only works if you've got service technicians that have had sales training.
Free Smart thermostats
One of the first HVAC contractors in the USA to buy whole-heartedly into smart home technology includes a smart thermostat in every replacement job at no additional charge.
His salespeople carry a smart thermostat with them and show it to customers, along with the app, during every presentation. The app shows what other devices in the home can be automated, and this contractor can take care of those as well.
His salespeople have told me that, not only does this result in a higher closing ratio and higher average sale, it changes the entire conversation. When people have been getting bids, they've already heard about all the usual things HVAC salespeople talk about. His salespeople are the only people with that great visual aid and something different and interesting to talk about.
The smart thermostat connects directly with his shop and it alerts them when there's an issue. This keeps the contractor connected to the customer 25/7 for as long as they own that thermostat. This is almost the ultimate in loyalty programs.
Lifetime Warranty on Repairs
Consider giving customers a lifetime warranty on any repair you do (consumables, such as contactors and capacitors can be excluded) for as long as they maintain their service agreement.
Equipment that has been properly maintained doesn't break down very often, but every time their unit does, they'll call you in the hopes that it will be a free service call.
Sure, you'll eat a service call and a part now and then, but you're almost guaranteed to keep that customer for as long as they own that equipment. When they need a new one, you'll be the first one there.
Lifetime Leak Search
Customers don't realize how difficult it can be and the liability involved in doing a proper leak search, and frequently complain about the cost of it.
You know that as soon as you repair the leak, the pressure in the system is going to go after the next weakest spot in the system and there will be another leak in the very near future.
Make sure you let them know that they get a lifetime warranty on the leak search, so if it stops working properly, to call you. They'll still pay your service call fee and for any repairs, but the leak check itself will be free.
From that point forward, every time their air conditioner isn't cooling properly, they'll call you hoping that it's low on refrigerant and that you'll check it for free.
Refunds on Service Agreements
I had printed prices on replacement equipment that I could show to people. These prices were 20% higher than what I needed to make our desired profit and were, consequently, 20% more than I expected to get for the job. This allowed me to offer discounts for a variety of reasons.
Something I ran into on a semi-regular basis was maintenance agreement customers complaining that, after all the money they spent of maintenance over the years, that their equipment should never have broken down in the first place and should last forever.
On a $10,000 replacement, I could take a whopping $2,000 off my book price and still make the profit I wanted. That means that if they'd spent $200 per year over the last 10 years on a maintenance agreement with my company, I could credit every dime of it back toward the purchase of a new system, in the form of a loyalty discount, and still make my desired profit.
I turned many an irate customer into a loyal fan inside of one minute with this strategy.
Charlie Greer is the creator of “Slacker’s Guide to HVAC Sales on Audio CD” and “Tec Daddy’s Service Technician Survival School on DVD.” For information on Charlie’s schedule and products, call 1-800-963-HVAC (4822) or go to https://ift.tt/fgZhjz9. Email your feedback and sales questions to charlie@charliegreer.com.
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Loyalty Programs that Work - Contracting Business
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