Most contractors do a two call maintenance agreement (M.A.) and charge $180.00 to $200.00 for the two calls. You are getting $90.00 to $100.00 per call and your actual cost per call is $100.00! This means you are lucky to breakeven on your M.A.s.
M.A.s are essential to guarantee the longevity and growth of your company. They are your share of the market. If you don’t get them, someone else will!
The answer to increasing your M.A.s year over year and making money on M.A.s is to sell a “one visit” M.A. for $13.95 / month on automatic credit card payment.
You collect $167.40 per year per agreement. Your cost is $100.00 and you make $67.40 per agreement Net Profit. With 1,000 M.A.s, you net $67,400.00!
Payment must absolutely be made by automatic credit card deduction every month. There is no yearly renewal. The contract goes on until the customer gives you 60 days to cancel.
Right now, when you send out your yearly renewal notice, you are asking your customer “do you still want to do business with us”? They cancel their contract by just not replying and about 20-25% do just that.
When you get on the automatic deduction, you lose 5% at most. This works wonders for year over year maintenance agreement contracts. This is why all the charities you see on TV are after that $19.00/month credit card payment.
Most companies send two renewal letters to each customer and when there is no reply, they make a phone call and give up. You will save all of this cost when you convert credit card payment.
You must track the total number of contacts you have, not just the number sold; here is the best way.
