How to Sell Service Plans

Getting Started with Service Plans

A service plan is a contract that provides customers with repair and replacement coverage for a specified period of time. Whether you’re in BAS, HVAC, AV, or security systems integration, your service goes beyond equipment manufacturing and installation. With the right presentation and value proposition, customers may sign up for a service plan when they make their initial purchase or add a service plan to their existing equipment.

Many service plans cover the cost of replacement parts and labor, while coverage for shipping is less common. Protection plans are similar but usually include additional features such as extended warranties and accidental damage coverage. While service and protection plans can seem like unnecessary expenses, they can save customers money in the long run.

Despite the importance of the equipment, software, and services you provide, the additional cost of a service plan leaves many hesitant to purchase. However, by opting for a service plan, customers receive prompt support if a problem arises, save money on repairs, and minimize costly downtime. Offering regular maintenance checks within your plan can also alert them to potential issues before they cause damage.

Service vs. Product

Just as insurance offers peace of mind against accidents, loss, or damage, a service plan can be a wise investment for any business in need of essential equipment. Service plans are not only beneficial for customers—they can also be an effective source of ongoing income for your business.

Product sales are vital, but after the initial transaction, you may not see that customer again. A service plan ensures a reliable income from a customer for a prolonged period. Because service plans often involve a higher level of customer service and support, clients are more likely to be satisfied and less likely to switch to a competitor.

Providing excellent maintenance, repairs, and warranty services leads to higher customer retention rates. Offering services allows you to establish and maintain stronger, more personalized customer relationships. Clients will feel cared for and supported, building trust and showcasing your reliability. Customers who opt for your service plans are more likely to renew them over time and may recommend you to others.

Service plans offer benefits for both you and your customers. They help develop client relationships beyond equipment purchase and installation and ensure a reliable source of recurring monthly revenue (RMR).

The challenge is to highlight service advantages to your clients. When selling products or systems, customers can see, hear, or touch tangible items. Services can seem more elusive, and their value may not be immediately apparent, so you need to highlight their advantages differently.

Learn What Your Ideal Customer Needs

To sell more service plans, first ensure you’re offering support that customers truly need and want. A service or protection plan that doesn’t immediately strike a customer as relevant and valuable can be off-putting and counterproductive.

Conduct research to discover what really matters to your client. For example, do they work in healthcare and require 24/7 call-outs to repair their HVAC systems? Do they have a major event requiring their AV systems to be fully calibrated and firmware updated? Some clients may require several separate services or technologies—consider how to bundle those in a plan that brings value to both their business and yours.

Develop a comprehensive target customer profile. Consider their aims and objectives, obstacles and pain points, and how your services can help them get the most out of the equipment you provide.

Educate Your Sales Team on Selling Recurring Service Agreements

Selling a product differs from selling a service, especially when selling ongoing services over a long period. Your sales technique requires a different approach.

Help your staff understand the best ways to promote recurring service agreements. Unlike a one-time payment for equipment, recurring service agreements result in regular, smaller amounts of revenue over a more extended period. They also involve a longer, more complex sales cycle.

When selling services, focus on building a relationship with the customer. Nurture a positive partnership with clients, and develop this early on. Clarity is key—both parties must understand exactly what the agreement entails. Ensure staff can illustrate the benefits of the services so the customer can see they are worthwhile. Confirm details to avoid misunderstandings.

Provide relevant training and marketing materials to educate your team on selling recurring service plans. Present them with statistics showing the positive effects more service plan sales could have on your company’s revenue. Adjust commissions and compensation to incentivize your team to sell more service plans.

Items to Include in a Recurring Service Agreement

Before training your staff on recurring service agreement sales, determine what your offer will consist of. Write a clear and concise description of what your service agreement will entail:

• ​Description of services and scope: Define the type of services you’ll offer and specify the scope. What will and won’t be included? Will you schedule regular maintenance checks or simply be ready to troubleshoot problems? Be specific and tailor to the customer.
• ​Costs and timeframe: Set a monthly and annual price, and itemize so the customer knows exactly what they’re paying for. Include any other expenses, such as travel for repairs. State when the agreement will expire.
• ​Standards: Indicate what services your customer can expect and the level of service. Having it in writing ensures accountability.
• ​Monitoring and reporting: Specify how you’ll schedule maintenance checks or offer auditing services.
• ​Emergency repairs: Set realistic expectations for emergency support, including reasonable timeframes for technician travel.
• ​Contract termination protocol: Explain if and how the customer can terminate the contract if you’re unable to provide the stated services.

How to Sell a Service Plan

With a clear service plan tailored to your customers’ needs, here are tips to help you engage customers, highlight the benefits, and close more sales.

Build It into Your Sales Process

Treating service plans as an add-on may not be effective, especially if customers are unaware of the benefits or have shown resistance. Building your service or protection plans into your sales process early on can improve your success rates.

Present the service plan alongside your initial product or offer to showcase how they work together as an overall solution. A relevant, valuable service plan tailored to your customer’s needs increases the likelihood they’ll opt for it.

Be Aware of Budgets

Set a service plan fee that demonstrates value for money to the customer and fits within your budget. Appeal to your client in terms of cost without compromising your project’s profitability. Recognize the budget and margins your customer has and whether they can allocate revenue to ongoing services alongside their equipment purchase.

Create Powerful Proposals

Integrate service plans into your sales process and factor the costs into your original proposal. Offering a comprehensive service that includes all ongoing maintenance and fees helps you stand out from the competition.

Customers appreciate transparency. An all-in-one offer sets realistic expectations and shows you’ve considered the customer’s ongoing needs.

Make It Easy to Purchase Your Service

Customers like a smooth, straightforward sales process. Whether they purchase a service plan with the initial proposal or add it after installation, ensure your payment integration software provides a simple and streamlined process. Good payment integration software should also allow customers to easily view and manage their service plans beyond the initial purchase.

Consider Pricing Tiers for Flexible Solutions

If you work with many clients with similar requirements, consider creating multiple price points for service tiers of varying degrees. This speeds up the process and shows the client you have experience in their sector. A clearly defined price range with customization encourages customers to choose your service plan over a competitor’s.

Offer Great Customer Service and Follow-Up

System integration projects do not end at installation. If a customer doesn’t opt for your service plan initially, it’s still beneficial to build a positive relationship. Follow up with the client after the project to showcase care and attention beyond the initial transaction. This increases the chance they’ll return for further products or services and opt for your service or protection plan in the future.

How to Sell More Service Plans with D-Tools Software

Selling service plans requires a careful, consistent, and transparent approach. Introduce customers to your service plans early in the sales process and offer a clear value proposition. Develop strong proposals that integrate your service and protection plans, showing clients how you’ll support them beyond the initial project or installation.

With D-Tools Systems Integrator (SI), you have everything needed to define, create, sell, and manage service plans for new and existing projects.