Tips for Tough Times in MA Renewals
Maintenance Agreements can become a contractor’s lifeline in the slower seasons. That’s the point, after all – to generate steady cash flow year round and create a steady workload to keep techs busy.
But the very thought behind Maintenance Agreements – “how do I as a contractor keep the money coming in?” – meets up with the opposite thought of many of your customers when economic times are tough – “where can I reduce any unnecessary spending?” That question comes to mind especially for customers when the word “renewal” comes around.
With recessionary spending habits in the works, contractors will obviously find more resistance as they seek to enroll new customers into their loyalty programs – and get existing customers to renew. But you can make small changes and try new tactics to adapt to the new reality. For example:
Create new products that reflect the times. Maintenance Agreements help your customers stretch their energy dollars, save on repairs, enjoy discounts on service, and preserve the life of their equipment. If you don’t already have an MA program established, now’s the time to create one and let your customers know how much they’ll save when they join yours.
Test a multi-tier membership. If you’ve already got an MA in place, try introducing a “light” version of the same. Customers can still stay in the program, while enjoying that feeling of “cutting back” on an expense.
Focus on core customers for renewals. The customers who get the most value for your services are also the ones who would be less satisfied with a cheaper version of your MA program. To give them the attention they deserve, increase your communication with them; don’t assume a renewal will happen.
Also, focus your discussions on value, not price (always a good idea). In other words, don’t immediately offer discounts as a renewal technique. Instead, lead with questions about the value the customer receives from your maintenance agreement. And here’s another way to increase that value to the customer (while increasing their commitment to your MA): offer extended agreements at a fixed price. As an alternative to a lower-tier membership discount, offer customers the chance to sign two- or three-year agreements at the current rate.
Adapt marketing messages to highlight value. You won’t typically market for Maintenance Agreements directly. You’ve got to establish the relationship with the customer first, then show how the MA will continue to provide benefits and savings. However, in the marketing that will generate leads that will open the door to MA conversions, promote the value you provide. In particular, customer testimonials that talk about energy/money savings and money-back guarantees are great tools for reassuring your prospects.