Service agreements have always been the lifeblood of any truly great service provider.

If you’ve never heard the term “service agreement” before, don’t worry, you’re not alone. A service agreement refers to an ongoing contractual arrangement between a service provider and their client. They can include anything from scheduled maintenance and routine inspections all the way to repair work and emergency service. Long story short, a service agreement is a flexible and customizable tool designed to meet the unique needs of each and every one of your clients—solidifying your relationship with your clients and ensuring steady work into the foreseeable future.

Sounds great, right? So why isn’t everyone doing it already? Well, the truth is they can be a bit of a tough sell—but the benefits of rolling service agreements into your sales strategy can’t be overstated.

Why are they such a tough sell? Simple—because the sales cycle of a service agreement is much longer than that of replacement work, service repairs, or retrofits. 

Is it worth it? Absolutely. The sale of service agreements provides your company with a pathway toward persistent and reliable top-line revenue. These agreements allow you to continually develop your sales teams—enhancing their skillset and furthering their ability to bring value to your organization. 

Understanding the True Value of a Service Agreement

Training your team to sell service agreements to your clients and prospects presents a number of benefits:

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  The way to dependable top-line revenue.
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  The chance to create a proactive workflow.
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  The opportunity to develop your sales team. 
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  The ability to compensate for seasonality and slowdowns in your workload.
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  The ability to create relationships & real value for your clients—offering a solid, functional focus on their needs and how you can serve them better. 

Enhancing Revenue Streams

If you’re billing maintenance contracts properly—well in advance of service—you’re creating additional cash flow that helps your service business stay ahead of the crunch. Let’s take a look at a few of the positive outcomes of properly managing planned maintenance with your clients. 

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  The average service contract creates a 3-5X return on your initial investment!
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  Booking maintenance work in advance of service helps create positive cash flow before your field techs even hit the job site. 
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  You’ll never have to worry about where your next job is coming from.
  • Service agreements provide a solid baseline of work for your teams across the organization. 

Creating a Win-Win Situation for You and Your Clients

On the Customer Side

When it comes to selling service agreements, one of the key aspects to highlight is the range of benefits they bring to your customers. By entering into a service agreement, businesses gain the valuable opportunity to work closely with their clients, fostering strong and enduring relationships. This close collaboration allows service providers to better understand and meet the needs of their customers.

Through regular interactions and proactive engagement, service providers can identify potential challenges and address them in a timely manner, serving as trusted partners in finding effective solutions. By emphasizing the customer benefits of service agreements, businesses can highlight their commitment to delivering exceptional value and service, ultimately cultivating long-term partnerships based on mutual success.

On the Business Side

But, the benefits of a service agreement aren’t ONLY enjoyed by your customers—your internal teams get to reap the benefits too. Planned maintenance provides your organization with steady work month-over-month—providing them with stability and predictability in their workload. This allows you to plan your time and resources accordingly over a longer period of time. 

Planning work in advance also means providing your team with the opportunity to work on projects that align most closely with their interests—ultimately leading to increased job satisfaction and higher motivation. Not to mention the fact that happy team members mean higher quality work on and off the job site. 

Taking a Proactive Approach

One of the biggest challenges you’re going to face when optimizing your sales strategy is how to become proactive in a reactive business.  

Planned maintenance plays a crucial role in your business operations. It allows you to prioritize improvement and efficiency by implementing a system of pre-scheduled visits. That way, you encourage proactive planning that lets you stay ahead of potential issues and optimize your service delivery.

This proactive approach not only benefits you but also translates into better service for your customers and their equipment. By anticipating and addressing maintenance needs in advance, we can provide timely and effective solutions that ensure your customers’ equipment remains in optimal condition. Ultimately, planned maintenance not only enhances our internal operations but also leads to enhanced customer satisfaction through improved service quality and reliability.

Defining Your Sales Strategy

Now that you understand the basic value and anatomy of a service agreement, it’s time to ask that all-important question: where do you start? Let’s break your sales strategy down into five different elements. 

1. Prepping your team

This probably seems obvious, but half the battle is making sure that your team knows exactly what it is they’re trying to sell. Make sure they understand the value proposition of a service agreement (maybe by showing them this very article) and how it can be worked into your organization’s existing service offering. 

2. Defining your sales talk track

Your sales talk track can be broken down into four basic elements:

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  Understanding your target audience. 
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  Defining your unique sales proposition. 
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  Outlining the key benefits of your service. 
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  Addressing any potential objections raised by your prospects. 

Once you’ve established these talking points, you’ll be ready to take on your sales pipeline and win your company’s new business. 

3. Running your sales by the numbers

The foundation for learning how to turn an opportunity into a win is understanding the basic lifecycle of what goes into creating a sale. 

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  Touches: come in the form of cold reach-outs, follow-ups, responses to inquiries, etc, and are essential for sparking interest in your potential leads. 

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  Meetings: this is where you make your pitch, identify a problem and introduce them to the product.

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  Opportunities: this is your opportunity to provide a solution to this new potential customer.

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  Proposals: now it’s time to put it all together. Create a full rundown of how the product or service will alleviate the pain points identified when you originally spoke to the customer. Demonstrate the long-term benefits of doing business with your organization. 
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  Sales: new business won.

The secret is to avert your attention away from your expected number of sales and refocus on the numbers outlined above that will lead to those eventual sales. These are the numbers that it takes to get a single win:

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  8 to 10 calls to get 1 meeting
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  3 to 5 meetings to get 1 opportunity
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  4 to 6 opportunities to make 1 proposal
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  2 to 5 proposals to get 1 win

4. Aligning your sales incentives

There are a multitude of different ways you can go about aligning your overall sales incentives with the sale of service agreements. But for the purposes of this article, let’s focus on these four:

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  Place a premium on selling service agreements.
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  Devote an entire subsection of your team to the sale of planned maintenance.
  • A longer sales cycle means more effort is required to manage these sales. 
  • More resistance calls for a dedicated team.
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  Provide your team with guidance.
  • Point them towards actions that lead to future sales. 
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  Network, Network, Network.
  • Stay active within your target market.

5. Closing tips and tricks

Growing your customer base doesn’t just happen overnight. In order to steadily grow your repository of planned maintenance contracts, you need to use every tip and trick at your disposal. Here are a few to help get you started!

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  Every piece of equipment we install should include at least a 1 year PM contract.
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  Review the one-off work you’ve done in the past and reach out to existing customers.
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  Most of the installs we do have a warranty on our work. Make that warranty a proactive warranty. 
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  Make it a priority to actively go after service agreements.
  • Have a sales goal, create a list of target accounts, systematically attack, and track your team.’s progress!

Once you’ve built a robust foundation of planned maintenance work, it’s time to leverage technology and implement a field service management platform to help bring it all together. Software like BuildOps can help you stay ahead of the game by helping you track parts procurement for your maintenance contracts, create a work order schedule well in advance of each job, define your scope of work for each contract, and even create reports on key metrics that help identify your most successful jobs. 

Ready to hear more? Visit our website and schedule a free demo to find out if BuildOps is the right field service management platform for your commercial service business.