Service agreements: the business life preserver

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Service Agreements (not contracts, “contract” is a dirty word) have been around about as long as service calls. Viewed as an insurance-type agreement where the customer receives bonuses or perks due to their commitment to your company. Businesses offer an array of services for those customers who opt for participating in a service agreement plan. Most commonly the agreement offers the customer a discounted rate for service and installation, at least one preventative maintenance check throughout the term, and priority scheduling. These simple perks appeal to an educated homeowner or business owner who understands the importance of proactive, as opposed to reactive, maintenance.

• Preventable — At Mr. Plumber, our Service Agreement Customers receive one water heater flush and a whole-home plumbing inspection a year. At this time the technician flushes the water heater of sediment (which is a HUGE problem in south Texas). He also inspects the water heater for safety and efficiency. He will then survey the home and visually inspect fixtures, toilets, appliances and plumbing lines. After the inspection the technician documents his findings on the invoice and informs the customer of his findings. At this time, he will offer any suggestions that could save the customer time, money or energy. If they want any work done at the time, we offer it to them at their discounted rate.

This home inspection allows us to catch some of the plumbing issues that could turn into very big emergencies. It is better for the business and the customer to remedy any plumbing issues BEFORE it’s a catastrophe. Emergency plumbing problems could cause costly damage to the home or business. But, we are not infallible. Naturally, we could go out one day and get an emergency call that evening for something we never could have predicted. It’s best to ensure you’ve completed a thorough inspection and document any issues on an inspection sheet for the customer’s and the office’s records.

• Guaranteed Customer — If you have a customer that pays a small fee every month for their Service Agreement, chances are high you are going to be the first person they call when something goes wrong. Service Agreements are a relationship builder. Each side is putting in some trust and effort. The customer must trust that the service provider will be in business to honor the agreement. The business trusts that the customer will contact them if there are any issues. These customers will be your biggest supporters and best source of obtaining online reviews.

• Revenue Stream — Service agreements offer the business a reliable and predictable revenue stream. If you’re billing monthly (which you should for maximum business benefit) you can expect a certain amount of revenue on a predictable and consistent date.

Service Agreements, clearly, have their place in the service industry. If you are utilizing this business practice, ensure you have a clear and verifiable system in place to track and provide the best customer service experience for your Service Agreements.

allie hard hatAllie Perez is director of operations, Mr. Plumber / Mr. AC, San Antonio ( Her interesting viewpoints on the trades can be found on her blog at She also is founder of Texas Women in the Trades (TWIT). Visit

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