Ask the Experts | Are Service Agreements Important?

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Question: How important are service contracts for growing my business?

Gary Elekes; Founder, EPC Training:

Great question. Service agreements are how we refer to those. We try to teach the technicians to, nomenclature-wise, make sure the customer understands that it’s a club agreement, or we call them USA agreements. We try to not use the word “contract.”

And as we look at how important that is to the business based on the question that was submitted: Really, it’s probably the single most important marketing program you have as a business. Your existing customer base is going to buy an entire 67% more than a standard customer lead – what we would call a marketed lead — somebody who didn’t have a relationship. So if you just look at that, and said a service agreement is how I can create that relationship, there’s really a purpose as to why that 67% occurs.

You know, you’ve got the opportunity to be involved with the client in a trusting relationship, and certainly one that isn’t a demand service crisis call where people are emotionally distraught and not necessarily waking up in the morning saying “Oh, gee, I’m glad my condenser fan motor failed” or “my variable speed gas furnace motor failed.”

So the service agreement is a relationship model. While we’re going to do the technical work for certain, the principle here is customer experience. So we’re going to deliver the technical expertise of course, but what we have to teach our men and what we have to teach our company from a cultural point of view is what makes it important is that we’re able to create a customer experience where they feel good about the brand and the relationship. So when it comes time to talk about an accessory or it comes time to talk about an upgraded product, or potentially a repair vs replace or even just a financing deal. Those types of programs are going to go over better with a client that already has a relationship with you, and you’ve done business with, and they know that you’re trustworthy, and the brand experience is good.

So, to me, it’s the single most important part of the marketing platform. Once we get past brand and those types of things and start talking about execution of strategy, the service agreement platform is number one. Wally, I’m going to pass that on to you, I’m sure you’ve got some great comments on that.

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