How to sell service agreements
How to Sell Service Agreements and Make Money
if I were to take your service agreement
program and fix it what would that do to
you do you ever feel like your service
agreement program it's like having gum
on your shoe but there's just something
wrong with it just something dragging
about it
and if I were to fix it I wonder if you
could think of two or three key points
that would make it better for example to
have a service agreement program we all
know you have to run those maintenance
calls tune-up calls are those service
agreement visits right but I'm going to
show you that that's not necessarily the
worst problem let me show you something
you know our industry says that your
company is only worth the amount of
service agreements the amount of
customers you have under contract is
that true I don't really think so with
service agreements we're trying to buy
something aren't we loyalty loyalty is a
good thing but I want to talk about the
five hidden costs that are hidden out
into open in your service agreement
programs let's talk about number one the
number one cost not necessarily an order
is simply an incentive right you give an
incentive to your service technician
right or perhaps a dis of dispatcher but
somebody gets paid money to actually
present and sign people up just sell the
service agreement all right well then
here's another cost secondly number two
is the discount okay so we have a
discount program anywhere from 10
percent to possibly 20 percent Wow
I mean you think about it the typical
service company in the United States has
a net profit of two percent to seven
percent and we're willing to take
fifteen percent off the top well you say
that's only for our service agreement
programs and we build the money in
really is that a great idea tomorrow I'm
going to talk about wholesale versus
retail and how the big retailers
actually make money with their customers
and are we doing it are we doing it the
way they should or can we fix repair
replace or you can have a better way to
do service agreements okay either way
that's a huge that's a huge amount and
you're giving that money back aren't you
all right and by the way at the end of
the year do you have an extra ten ten to
twenty percent on top of the custom
that are non service agreement customers
I mean really there's your balance line
show oh my gosh look how much profit we
have over here or is it like gum on the
shoe something about it's just not quite
right so so what's another what's
another cost okay of running a service
agreement program well let's see it
might be a free or reduced service
dispatch fee okay so you got a service
and dispatch fee and you're just giving
it away
now a typical service of dispatch for
you Danvers from $49 to 129 dollars
that's a large amount of money that you
put on top of it as a matter of fact in
the in the late 80s Early 90s etc etc
mid 90s a lot of us moved to flat rate
pricing and we thought flat rate pricing
was making us a lot of money
well you want to know the truth of what
really made you money in flat rate
most of us added a service and dispatch
fee the moment we went to a flat rate
pricing system I added $49 that's $50
$49 right on top of my service call
right on top of it back in 1995 do you
think that made a difference and now
some people are telling you you could
just give that away don't kid yourself
that is a huge and enormous cost all
right
what's another cost priority service
priority service you say that's that's
not a cost oh yes it is
I'm not saying it's not a good thing to
give to your members I'm saying it's a
huge cost because do you advertise in
neighborhoods that you want to do
business maybe with AB ad campaigns
marketing campaigns maybe radio TV but
what about billboards yard signs things
like that on door hangers in
neighborhoods that you want their
business and then on the day they call
the phone rings they actually call this
is your only chance to get them probably
for all the money that you spent but
you're too busy because you're out doing
priority service and even some
guaranteed same-day service for your
service
agreement customers that's a huge cost
and you have to track it you have to
account it for it but I'll show you how
to get the big fish and still take care
of your current obligations because I
believe in honesty and integrity but I'm
going to show you a better way okay and
by the way Thursday at 3 o'clock I want
you to attend my webinar click on that
register button because I'm going to
show you a better way now there is
another cost and this is the one that
probably is hidden because we don't
think about it and this is an enormous
cost and that is time how much time do
you allow your service technician to
offer sales sign up customers on your
service agreement club member
maintenance program how much time I've
heard anywhere from five minutes to
eternity eternity being as long as it
takes how much value are we putting on
these service agreement programs and
what are we getting back for that value
you now you wonder why oh it's just like
gum on the shoe just something about my
service agreement program that just
doesn't seem right sometimes it seems
like more trouble than it's worth
hey I talked to customers I talked to
hundreds and hundreds of people just
like you and I hear that over and over
and over so what's the problem the cost
of the incentives on top of the discount
on top of the the dispatch fee this
reducer giving away on top of the cost
of priority service on top of the
enormous amount of talented skilled
labor that is lying dormant while this
guy is trying to to discuss maintenance
programs with a customer these costs are
accumulative they all add up or better
yet they all add down now I want you to
attend my webinar because I'm sure you
there's something that we can do about
this tomorrow I'm going to do a video
and show you the difference between
wholesale and retail what do you do and
what are the big retailers do what are
the Giants do how do they exchange this
enormous downside in cost for a huge
value we'll talk about that tomorrow
don't forget to register for the webinar
and hey I'm Rodney cope from the new
flat rate and I'll talk to you again
tomorrow
