CB INFLUENCERS
Membership Plans - What you don’t know CAN hurt you
It often happens in business that we tend to focus on the most urgent items or sometimes the items that we enjoy working on the most. But as a business owner (and as you probably already know) it’s important to step back and look at the full picture and ask yourself, “What important aspect of my business have I NOT been focusing on?”
In the HVAC industry quite often we forget to do this. We forget to step back and re-focus our energy on one of the most important aspects of your business health… your Memberships. While often simply viewed as a loss-leader to many, the structure and strength of your membership program can be the difference between going out of business or selling your company for many millions of dollars. And the key is often in how you, the owner, approach your program.
If you look at your membership program as a step-child to the demand season, then so will your team. If you look at it purely as a way to “get more sales opportunities in the home” then so will your team. But many of the brightest and most successful contractors in the industry KNOW that a properly structured and healthy membership program is the foundation of a highly profitable business. And a fundamental belief that customer experience is at the center of that program. It’s easy to think of a maintenance visit as a potential lottery transaction, but the best companies view their entire program like a 401k savings plan; the little deposits you make on a consistent basis payoff huge over time.
Those customer “deposits” have traditionally come in the form of a quality tune-up or discount on a service call, but the world is changing quickly. One of the more recent trends amongst those superior organizations is the use of lower cost connected equipment (aka monitoring technology) to assist in a better customer experience while also allowing the company to enhance their profit potential.
These platforms open up a new world for contractors to deliver value remotely through virtual health reports, easy chat-based communication, app-based scheduling and a similar peace-of-mind feeling for their comfort that customers get from a security system. And not only is the customer experience better, there are many profitability advantages the company gains as well.
First, twice as many homes can be serviced with the same number of technicians by reducing unnecessary truck rolls that lead to low or no fees. Many of the contractors I interact with tell me 50-80% of all visits made to the home result in no significant sales transaction (<$150). Second, legacy maintenance plans can cause a big build up in deferred revenue for those unfulfilled, but promised maintenance visits.Not only does this cause a reduction in EBITDA, but the maintenance program can actually be seen as a negative when you go to sell your business.
Additionally, over time as more of your revenue is derived from your existing, profitable membership program then less has to be poured into the marketing leads machine. And who doesn’t like getting more while spending less?
It’s an easy trap to fall into: only focusing on the demand season. But don’t forget to step back and understand that the only way to build a valuable, long-term business is by looking at the forest and all the trees in it. And your Membership program is a great place to start.
Andrew Fuselier is the COO and Co-Creator of SmartAC.com. In addition to running the day-to-day operations of the business Andrew spends a considerable amount of time with Enterprise clients helping them to discover the ROI of their existing Membership programs and to understand the opportunities of improvement in conversion rate, churn rate and low/no fee truck rolls by applying system connectivity, real-time data, proactive health detection and automated customer interactions. [email protected] | https://www.linkedin.com/in/andrew-fuselier-845a402/
www.smartac.com