From Amazon’s Subscribe and Save program to Netflix to monthly subscription boxes, customers are growing more used to the subscription model as a hassle-free way of saving money.
More home service businesses, including handyman and home maintenance companies, are using this growing trend to sell subscription-based service agreements and increase their monthly margin exponentially.
Home maintenance subscriptions: are they worth it?
Sometimes called service subscriptions or recurring service plans, these ongoing agreements can mean generating more reliable income while adding value to your existing customer base.
In this article, we’ll look at all the steps to create and sell a home maintenance service agreement for your handyman or general home repair business, including what a typical plan consists of and how to price them.
Choose a Model
Home maintenance subscription models are often based on two models.
Time-Based Model
Offer your customer a certain number of hours you’re available per month for whatever tasks they need. They’ll choose this option if they’re frequent customers and you’re offering a discounted rate in exchange for an annual commitment.
Package-Model
The other common option is a default set of tasks you offer in a package, such as common safety inspections, preventative maintenance or repair services, and basic home improvement requests.
This model will appeal to customers that are too busy to deal with all of the regular maintenance involved in homeownership.
For this model, brainstorm a list of the most common service requests you receive from homeowners and figure out which requests should go into your subscription plan and at what frequency. Also consider which services might be outside of the package as opt-in or as-needed. Offer a discount for extended services or hours for subscription customers.
Sample list items include:
- Appliance repair
- Replacing light bulbs
- Testing carbon monoxide detectors, smoke detectors, and fire extinguishers.
- Cleaning out the dryer vent.
- Replacing air and furnace filters.
- Fixing leaky faucets.
- Gutter cleaning.
Set Multiple Prices For Your Subscription Plans
Subscription models often have tiers.
Things to Factor Into Pricing
As lucrative as service agreements can be, you can also end up in the red depending on how the contract is written. Some things to factor in include:
- Your direct and indirect costs for service. Having more weekly or monthly home visits could mean hiring more staff and buying more equipment. You’ll also have to service your equipment more often. When you’re pricing your plans, make sure you can cover these additional costs. You may even want to require a nominal service call fee in addition to monthly dues.
- The traveling distance to the customer’s home. Don’t forget that more visits also means more gas to pay for and wear and tear on service vehicles. If you have a broad service area, your subscription fees should factor in travel costs.
- When limits should exist. At $20 per month, your customer won’t make up the cost for a $1,000 repair in the course of their annual contract. As this illustrates, it often makes sense to put limits on how much you’re willing to cover.
Put It All Together in a Service Agreement Template
Here are some other things to consider when putting it all together:
- Contracts should outline covered services specifically with a detailed home inspection and maintenance schedule.
- Include details about your performance standards and the consequences of not meeting them. This offers homeowners peace of mind about what to expect when they commit to a monthly, quarterly or annual plan.
- Explain any reports you plan on providing to them about the state of their property, what work was done, and any recommendations for the future.
- Include emergency contact information and what emergency services the plan offers.
- Homeowners are warry of any hidden costs, so make sure that your pricing structure is as clear as possible.
- Automatic renewal is key. You’ll need to make sure your payment processing system is reliable and up to the task of auto-payments. Your monthly fees will probably be collected one at a time (though you can also offer a discount for annual payments), so make sure you have a payment processor you can trust.
You can check out our free service agreement template for a basic starting point. And if you want more help, Housecall Pro recurring service plan agreement support helps you set up new customers and manage their routine billing and scheduling.
Double Check All The Legal Aspects
We recommend running your maintenance subscription plan and related contract by a lawyer before offering it to customers. The last thing you want is a legal battle based on vague language or misunderstandings.
The bottom line: Secure a payment processor you can trust, write solid contracts, and have a robust service scheduling software program that can easily handle recurring visits. With those assets and a pricing plan in mind, you’re ready to plot out your subscription-based service plans.
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