HVAC Maintenance Contracts

HVAC maintenance agreements are crucial for driving revenue. A successful maintenance contract program can easily account for 50% or more of your HVAC company’s annual revenue. Below, we’ve broken down the intricacies so you know how to price contracts appropriately, which service tiers to offer, and how to sell plans to customers and streamline their management.

With a good service contract program, you’ll be well on your way to increasing profits, keeping money flowing year-round, and retaining clients - all while lowering your marketing expenses.

What Are HVAC Maintenance Contracts?

HVAC maintenance contracts are agreements between an HVAC company and customer that outline various coverage options and discounts for a homeowner’s HVAC system maintenance.

These contracts go by various names, including standard maintenance contracts, service agreements, club memberships, and, in some cases, comfort plans. However, despite their many names, these agreements provide the same services, even if they omit the term ‘contract.’

Services in HVAC maintenance plans typically include routine maintenance, tune-ups, and cleaning. However, some companies also offer additional benefits to incentivize their customers to purchase contacts, like reduced rates for service calls or priority and emergency service.

Some businesses include free maintenance plans with system installation. Others might give clients a discount when they commit to a long-term plan, like offering a free third year of maintenance when homeowners commit to a two-year hvac service contract.

Benefits For HVAC Companies

AN HVAC service contract is critical for increasing profit and keeping customer retention rates high. In addition, a maintenance service contract guarantees a company repeat business instead of relying solely on repair calls and installs.

Suppose a customer purchases a new HVAC system where a repair is unlikely to be needed, for example. In that case, a business can keep this customer by offering regular maintenance to extend the lifetime of the new unit. This tactic turns a single visit into repeat business.

Frequent maintenance visits with clients also allow a technician to build relationships with clients. This familiarity helps build trust and enables the tech to upsell or pitch additional products and services like air purification systems. As a result, sales will be easier because clients will trust your techs to suggest the right equipment and services for their needs.

And most importantly, HVAC service contracts will keep technicians busy during slow seasons, smoothing out the seasonality of the business.

Benefits For Customers

Many problems can arise with an HVAC system, and there's only so much a homeowner can take care of on their own. Beyond the peace of mind that comes with scheduled maintenance, purchasing service contracts include these benefits for homeowners:

Improved Energy Efficiency. A clean HVAC system outperforms a dirty one, reducing energy consumption by 25-30% to save customers money on their utility bills. Despite being one of the most basic and crucial fixes, homeowners usually overlook filthy air filters. As a result, the fan has to work harder. Dust settles in your home. The air no longer reaches as far as it can because of the clogged system. And the worst part? It uses much more energy, making your bills gradually increase. Keeping air conditioners at peak efficiency ultimately makes HVAC service contracts worth the cost.

Detection Of Minor Problems Before They Become Major Ones. With at least two inspections per year, there’s a dramatic reduction in the chance of system malfunctions, breakdowns, and failures that can lead to more costly repairs.

Prevention of System Damage. Preventing damage ensures that equipment lasts as long as possible, saving homeowners money in the long run. Not only will a well-maintained system grant homeowners peace of mind, but it will also require fewer repair calls and ultimately pay for itself.

Discounts. Most HVAC companies offer discounted repair costs and equipment rates under their service contracts. Some even provide free labor. As a result, regular maintenance can save homeowners money, especially should they need to pay for more costly repairs in the long run.

Priority Service. Many HVAC service contracts prioritize anyone under a service or calling in for emergency service. Priority service means that homeowners get speedy service, even during the busy season when they would otherwise have to join a waitlist.

Equipment Warranty Longevity. Some manufacturers require service to their systems, which the contracted company can provide. Keeping their warranty valid enables homeowners to get the most value from their HVAC system and factory warranty.

Increase In Home Value. A well-maintained system with a good warranty can also be appealing to buyers should the homeowner decide to sell their house down the line.

These benefits all make HVAC service contracts worth their weight in gold to customers.

What To Include In An HVAC Maintenance Contract

What you include in your HVAC maintenance agreement is entirely up to you. For example, some HVAC service contracts only include preventive maintenance. Others may provide other perks or even let clients pick and choose which services they want to add to their HVAC maintenance agreement.

There are numerous services you can include in your HVAC service contract. For example, priority scheduling, rebates or discounts on repair work and equipment, and even faster response times are popular options.

Offering these perks to customers won’t cost your business a lot of money, but they would be valuable to clients.

Priority Service

This benefit means customers get to jump to the front of the line whenever they call for repairs, no matter the situation. Priority service is especially beneficial to homeowners during a major heatwave or cold snap when HVAC companies are busier than usual and have long wait times. Instead of waiting days to have someone out for a heating repair in their service area, your company’s HVAC contracts may guarantee same-day service.

Emergency Service

While not every company can provide HVAC emergency repairs after hours, it'll appeal to someone who worries about having access to overnight or emergency heating or cooling repairs when they need them most. For example, for someone with older adults in the home, the peace of mind that comes with knowing your company will come to fix their heating or air conditioning right away can be a significant benefit and outweigh the cost of a maintenance agreement.

Reduced Rates For Service Calls

It costs a company more to obtain a new customer than retain an old one. By offering reduced rates for service calls, you not only save money on advertising costs but guarantee your customers will call you whenever issues arise. In addition, some companies waive the diagnostic fee while others may offer discounts on labor costs or the repair as a whole in their contracts.

Reduced Rates For Parts and Equipment

Homeowners can avoid paying for most big air conditioning and heating repairs with an HVAC service contract, saving them a bundle. Then, when they inevitably need to replace worn parts, you can offer them a discount. Most companies offer a discount of around 15% or exclude labor costs during the install.

Maintenance Visits

Regular, preventive maintenance for heating and cooling equipment is essential and not something most homeowners can complete on their own. With regular HVAC maintenance, homeowners will reduce their energy bill, have cleaner air, and ultimately increase the lifespan of their air conditioner. During preventative maintenance visits, a tech will generally:

• Check the heating and air conditioning system for oil leaks, vibrations, or noise
• Inspect the thermostat, fan motors, compressors, wiring, electrical connections, and compressor operation pressures
• Clean the condenser coil
• Inspect shaft bearings and lube motor
• Service electrical heat strips
• Check all amps on components and MFD on all capacitors
• Test and inspect safety controls
• Take temperature drops and rises
• Make sure all connections are tight and undamaged

Seasonal Tune-Up

HVAC seasonal tune-ups are entirely different from the regular, preventive maintenance the systems require. During each seasonal tune-up, a technician may:

• Check the compressor amp during startup
• Make sure the evaporator coil is clean
• Check that the condensate drain is clear
• Inspect air conditioning unit’s outdoor disconnect
• Inspect contacts, relays, wiring, and capacitors
• Lubricate and inspect blades and condenser fan motors
• Clean and inspect the condenser

Filters/Belts

You can decide whether to include new filters and belt changes as part of your basic HVAC contract or throw them in as an add-on accessory offer.

Note: Most homeowners assume HVAC service contacts include replacement filters; instead of asking homeowners to pay this extra cost, you may want to include it as part of your contract’s cost.

What HVAC Service Contract Tiers Should I Offer?

In the heating and air conditioning industry, HVAC businesses generally provide several different service contract tiers. While everyone offers a different approach for inspecting and maintaining HVAC systems, most companies offer three broad categories of service. These include the basic, mid-level, and highest plan (often referred to as bronze, silver, and gold) with prices ranging from the cheapest to most expensive and appealing to the different price ranges homeowners can afford.

For example, your service contract plans might look like this example created inside FieldPulse’s Variant Proposal tool:

Trying to decide what your service contract should include? The majority of maintenance plans typically include the following benefits and maintenance tasks:

Basic Plan

All of these preventative HVAC maintenance tasks are low-cost, do-it-yourself projects that homeowners can complete without the help of a professional.

• Inspection of heating and air conditioning unit and the furnace
• Only covers the cost of labor for the service, not the cost of parts (e.g., this plan may cover the cost of replacing a filter but not the air filter itself)
• Cleaning condenser coils, hosing down the external air conditioning unit, and changing the furnace filter as needed are included
• Planned maintenance visits to inspect, clean, and adjust equipment annually or semi-annually.

Mid-Level Plan

Mid-level plans often cover some part of the cost of heating and cooling repairs, routine maintenance and may cover minor repairs with homeowners paying money out of pocket for more expensive heating or cooling issues.

• Inspection of the heating and air conditioning unit and the furnace
• No extra charge for labor or any repair parts used during the check-up
• Usually covers the cost of labor or the diagnostic fee on equipment repairs
• Priority visits

Highest Plan

Meanwhile, the most expensive plans typically cover all costs for maintenance and repair visits plus costs of selected parts for heating and cooling repairs. Services included:

• Air conditioning and furnace check-ups
• No extra charge for any repair parts during checkups
• Priority visits
• Emergency service repairs

How Much Should I Charge For Maintenance Contract Agreements?

Use this calculator to check prices in your area to find more detailed pricing. Some factors that may impact your contract price include the size and efficiency of the air conditioner unit, its age, time of year the work is done, or accessibility to the unit in question.

Basic plans often start at $200 for basic cleaning, increasing prices for more complicated air conditioning and heating systems or cleanings. The highest contract cost is generally around $300-$500/year. In general, you can use the following guidelines for prices:

By Tier

• Basic Plan: $75 - $249/annual , $7 - $21/month
• Mid-Level Plan: $220 - $400/annual, $19 - $34/month
• Highest Plan: $350 - $550, $30-$46/month

What To Include In HVAC Service Contracts

You should include everything you can in your HVAC service contracts. Including as much detail as possible makes it explicitly clear to homeowners what services and benefits they should expect from their HVAC maintenance service contract.

Otherwise, you could run into a situation where a client expects particular heating and air conditioning repairs to be covered under the terms of their maintenance agreement while you don't. Then, because you don’t have the terms clearly outlined in writing, you could potentially fall into expensive and inconvenient misunderstandings, possibly even in a court of law.

Maintenance contracts protect both the client and the company!

Include tasks that technicians will perform during a visit, the expected number of visits, and payment terms.  Then, sign your contract and have your customer sign it.

Treat your HVAC service contract as a legally binding contract. If you and your client ever end up in court, you'll be grateful that your contract is clear and concise, so there are no loopholes or misunderstandings. Of course, you’ll also want to consider having a lawyer look over your finished agreement.

Remember, this service contract should spell everything out in black and white. Be precise when explaining what HVAC service contracts cover - and what they don't cover.  Leave nothing to chance. If you or the client doesn’t fulfill the agreement’s obligations, then one or both of you have a course ready to either remedy or exit the agreement.

‍HVAC System Tasks To Be Performed

All HVAC contractors use different approaches for both inspecting and maintaining HVAC systems. Because what’s included in the “seasonal tune-ups,” "clean and checks,” and "maintenance services" performed on HVAC equipment aren't universal, it’s up to you to decide what tasks to perform on equipment and when.

HVAC technicians can find the absolute minimum acceptable compliance for HVAC equipment maintenance inspections here ; please read over it and decide which tasks are suitable for you and your technicians, as well as the system at hand.

Number of Visits & Schedule

There's no right way to determine the number of visits a consumer should receive or when to schedule their visits. That is all up to you! However, the minimum number of yearly visits should be at least two. With FieldPulse, you’ll be able to automatically schedule jobs in advance or see when customers’ subsequent visits are upcoming.

Keep in mind the age of the unit in question, and keep records of when maintenance takes place (which, again, FieldPulse can help with) so you can accurately determine how many visits might be required for the minimum HVAC maintenance to be optimal.

Payment Terms

While it might seem silly, payment terms must be spelled out as clearly as possible in the agreement. The more consideration you put into your agreements, the more security you provide for your company and the client.

Put yourself in the clients’ shoes. Would you want to commit to a contract without everything, including the payments, clearly defined? Wouldn't you want a document to hold the company accountable, their feet to the fire if they do anything wrong? Everyone wants that kind of protection for themselves, and a client seeing you provide that for them helps them feel at ease handing over money.

Signature

The agreement must be signed by both yourself and the customer. Otherwise, you aren't both bound to it. You can quickly accept signatures on maintenance agreements within the FieldPulse app, as well as keep track of maintenance agreement contracts.

Selling & Tracking HVAC Maintenance Agreements

While it might feel overwhelming to keep records of all of your hvac service contracts and agreements, FieldPulse’s easy-to-use maintenance management software makes managing HVAC maintenance contracts stress-free and straightforward. You can easily view scheduled maintenance visits, attach photos and forms to agreement files, and check payments, along with many more features covered below.

• Maintenance Agreements. With the Maintenance Agreement feature, you can easily create and track HVAC service contracts and associated information, like customer information, equipment information, and payments.
• PDF Uploads/Custom Forms. Give technicians easy access to sales sheets and pricing guides inside the app!
• Good, Better, Best Pricing. With tiered pricing options, technicians can present side-by-side comparisons of maintenance agreements and sell on the spot.
• Sales Commissions. Choose commission estimates based on a percentage of the invoice’s gross sales or gross profit. Not only does it help by making the information available whenever you want, but it also gives the customer the ability to visualize the difference in each tier, letting them know which services come with which option at which price point.
• Asset Management. You’ll be able to store the installation date, equipment model, warranty information, photos, and comments about equipment. Even add files and notes for internal use in the company so that other technicians can refer back to them in the future.
• Contracts. Easily create legal service contracts for all your plans and let customers sign from phone or email.
• Recurring Payments. With Recurring Payments, you can set the customer name, frequency of invoices, and occurrence date. In addition, FieldPulse automatically charges customers when invoices are sent and provides an automatic payment receipt, making it a simple transaction for both you and the customer.

Ready to try FieldPulse for yourself? Book a demo to walk through FieldPulse’s features and see how they fit your business’s specific needs.