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Subscription-based services for everything from razors to restaurant-standard food have been gaining popularity for quite some time, reaching a peak during the COVID-19 pandemic. Service agreements work on a similar basis, and as such can provide many benefits to trade companies that offer them.
Signing customers up to a regular service agreement can help to provide a steady stream of income. It also helps to plan schedules and predict capacity for your engineers, ensuring there is always enough work to keep them busy, without them being overstretched. This means you can keep talented engineers employed all year round, rather than reducing your workforce during quieter periods - only to spend more money rehiring and retraining during the rest of the year.
In order to reap the benefits of service agreement arrangements, it’s important to ensure they’re managed efficiently. Lots of residential service companies are turning to specialist contractor dispatch software to manage their business operations - and with a good quality system, you may be able to streamline the way you run your service agreement contracts too. We developed our Enterprise Resource Planning (ERP) solution for contractors, ThermoGrid, with this functionality in mind, to help our customers scale up and harness the potential of this competitive business model. Here are just some ways to improve the way you manage your service agreements by using one.
Reduce admin time and errors
While the advantages of offering service agreements are certainly high, there’s a large amount of administration involved in successfully setting up and fulfilling every contract. In order to be profitable you need to secure numerous maintenance agreements - but each one of these comes with its own customer details, payment preferences and scheduled visit dates.
Many companies struggle to keep their promises to their customers because they’re using inefficient processes to run their maintenance agreements. Manual or disparate systems and sporadic calendar reminders may do the job when you only have a small number of customers, but it isn’t sustainable as this side of your business grows.
Fundamental processes such as taking payments and turning up to appointments on time can be managed easily with our contractor scheduling software. As well as helping with the day to day running of a field service business, its specialist service agreement capability means that everything from scheduling the time and date of visits to creating customer subscriptions can be done automatically from one simple system. Manual errors are reduced, and no detail is forgotten - even each customer’s equipment model and serial number can be logged on the database, so that the engineer knows exactly what they’re servicing, every time.
Automate billing and offer the best value
Managing payments and accounts for regular service customers can be tricky. Unlike e-commerce, for example, there’s often a lack of consistency between when a payment is received and when the service or goods are delivered, leading to deferred revenue. Without an accurate administrative process, you might even forget to set up any recurring payments at all - before using our contractor estimate software, one of our customers had been servicing a client for three years, without charging them a single dollar.
Having efficient, automated billing systems in place can benefit your customers too by making it easy to stay on top of their payments. And for vendors, the simplicity means you’ll see your retention soar.
You’ll be flexible enough to set up a plan based on terms that suit them, and when each annual contract is up, it’s easy to roll it over onto the next. Thanks to integrations with other vendors such as QuickBooks, invoicing and financial reporting is simple, making it easy to keep track of deferred revenue and realize income once the work is complete.
This reporting can also feed back into the Customer Relationship Management (CRM) module of your contractor scheduling software, and trigger automated templates to remind your customers when they’re due a visit, and help them to book one in.
Track performance to boost your profits
If you’re deciding to grow your business by launching a new service agreement package, then you’ll need to be able to track its performance over time. Key Performance Indicators (KPIs) are important for every business to help it reach its goals. A digital system such as an ERP constantly collects business data, and can help to track KPIs thoroughly. Using dashboards, it’s possible to understand trends, see progress and plan for the future.
With this insight you can take into account the size of your business and set targets for how many maintenance agreements you should be managing in order to boost profits. Doing this also helps to manage a steady flow of work and prevent ‘slow seasons’, giving better stability to your staff. Other information, such as how many packages are sold or completed, as well as conversion ratio per technician, can also be logged, helping to identify high performers so they can be rewarded and share their skills with the wider team.
Our contractor bidding software, Thermogrid, can help your business to improve the way you manage service agreement packages. Click here to learn more.