Question

Topic: Strategy

Service Contract Strategy

Posted by Anonymous on 11/1/2010 at 6:26 AM ET 500 Points
Hi Experts,

I remember a couple of months ago I asked if it was ok to "productize" handyman services and the majority of you discouraged me. I also don't want the per hour pricing (or clients hate it). I'm trying to sell maintenance contracts and I the question most clients are asking is what is the rate am giving them. I'm almost tempted to give a day rate, but I thought I could ask here first. Secondly, I fee it would be a good idea if the clients paid in advance, so we can have a technician on call to serve them anytime.

Any suggestions will be highly appreciated,

Thank you in advance,

Raymond
To continue reading this question and the solution, sign up ... it's free!
SUBSCRIBE
Or, SIGN IN

RESPONSES

  • Posted by CarolBlaha on 11/1/2010 at 6:53 AM Accepted
    You should sell this like cleaning services do. They don't charge by the hour but price it and bill it monthly. Contracts are typically a year but either side can opt out without penalty. I would include proactive services-- some preventive maintanence time. That way they feel they are getting something for their dollars, not just when something breaks.
  • Posted by michael on 11/1/2010 at 11:11 AM Accepted
    Raymond,
    I wish I had the time or inclination to talk about a major retailer who offers this service and totally lost money on me because of the damage they did to my home.

    You may have a hard time selling the upfront fee unless it comes with a substantial discount. I wouldn't do something like 25%. I would look more at "subscribers do not pay for travel time". You'll have to eat that cost if you don't do the work yourself BUT that might be the the right thing to do just to re-sell the benefit.

    IF you do that, make sure you put WAIVED on the invoice...don't just not put it on there.

    Michael
  • Posted by CarolBlaha on 11/1/2010 at 6:06 PM Accepted
    Michael is right. They way they will subscribe to this is if they are getting a dicount or another service as preventive maintanence. Otherwise, they have no incentive to do anything but the daily rate on an as needed basis. When a company signs on with a cleaning contract there often is an upfront fee. You can add more discounts if they pay for this quarterly, or beyond.

    Work hard on the value statement. If you can show value from the end user's point of view-- you can sell this.
  • Posted by Jay Hamilton-Roth on 11/2/2010 at 10:45 PM Accepted
    Why not charge them a retainer, rather than a monthly fee (unless you're showing up monthly)? That way there's no "I paid for nothing this month" feeling. Also, give people on your "VIP" program a number that's staffed 24/7 by someone who'll take care of the problem guaranteed (a "handyman concierge").
BACK TO TOP

Post a Comment

Related Discussions

Community Info

Top 25 Experts
(Strategy)