Commercial Maintenance Agreements Are A Different Ballgame

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Pitching commercial maintenance contracts typically takes patience and persistence.

Kahn Mechanical, a commercial contractor in Dallas, TX, recently identified maintenance contracts as offering prime potential for growth and aims for a 10 to 15 percent annual increase in that area. That’s one reason Kahn added an entire section on service to its website, highlighting the benefits of doing preventive maintenance.

“We needed to be consistent with what we were saying in front of customers, which is that preventive work is a better business approach than reactive work,” says Mark Mikes, service group leader for Kahn Mechanical. “We revamped our website and social media presence, which had become outdated, and hired a marketing expert to help us better reach the millennial workforce.”

As baby boomers retire, people in their 20s and early 30s are increasingly answering the phones—and influencing purchasing decisions—at the businesses in need of preventive maintenance. Those millennials are quick to Google service providers and appreciate information presented visually, habits that prompted Kahn to start filming videos for posting on its website. One will offer a drone’s eye view of a rooftop unit installation; another may show images of a unit before and after one of Kahn’s 14 technicians addressed the dirty filter and coils.

Yet the younger generation often doesn’t have the final say in how a business spends its money. In fact, says Keith Paton, vice president of service for Ivey Mechanical Company in Kosciusko, MS, the biggest obstacle to selling preventive maintenance agreements to commercial customers is identifying the ultimate decision maker. Depending on the business, the person who signs the contract might be a purchasing agent, an office manager, an operations or production manager, or the owner or president.

 

“You have to ask a lot of questions to get to the right person—and then you have to understand that person’s role in the company and figure out the best approach,” says Paton, whose company provides HVAC, plumbing, and electrical service at 11 locations through the southeast United States. “We always ask about their needs, so we can better understand their business and then build rapport.” A manufacturing facility, for example, may express concern about a process that generates excessive heat and could lead to production slowdowns or delays. A retailer might be just as interested in climate control as promoting its energy efficient operations to customers. Providing customers with education and information tailored to their “pain points” also emphasizes the value of having an ongoing contractual relationship, with less focus on the cost of the contract itself.

Proactive, Not Reactive

Of course, it’s difficult to build rapport with customers if you can’t even get in their door. And that’s another challenge according to Bob Helbing, president of Air-Tro, Inc., Monrovia, CA.  “Commercial maintenance contracts are a different game than residential,” says Helbing, whose firm splits its work evenly between the two service sectors. With homeowners, you’re not only dealing directly with the decision maker but also providing a comfortable environment for their family, the people they love most. But with commercial customers, Helbing says, “You are one of many vendors a purchasing agent or vice president of operations deals with—and you’re not very important because companies focus on their staff, customers, and products or services. They call you when they need you and don’t want to think about you otherwise.”

To foster top-of-mind awareness—so companies remember Air-Tro when an HVAC concern arises—the firm employs a full-time salesperson for commercial maintenance contracts and uses a telemarketer to make cold calls continually throughout the year. “It takes aggressive marketing to be in a person’s decision loop when they need to look for a new provider. You have to plan a lot of seeds. Eventually, one of them will bloom because it landed in the right soil,” believes Helbing. He estimates that two-thirds of Air-Tro’s commercial customers have signed a maintenance contract. “The rest,” he adds wryly, “are on what we call breakdown maintenance. They call only when something breaks down.”

Here are tips for moving commercial enterprises away from the “breakdown maintenance” mindset:

Share statistics and stories. Beyond the additional expense associated with emergency repairs or replacements, customers may not be aware of how much they can save on utilities by keeping equipment in tip-top shape. The Building Owners and Managers Association International (BOMA), for one, offers information on the financial benefits of energy efficiency, which can be woven into a presentation to customers. EPA’s Energy Star online calculators (www.energystar.gov/buildings) might also prove convincing for customers who prefer to run their own numbers.

Equipment repairs offer the perfect opportunity to raise the topic of maintenance contracts because the loss of productivity and/or environmental discomfort, not to mention the unexpected expenditure, remains fresh in the customer’s mind. Mark Mikes remembers one customer who, for years, insisted on repairing an aging unit without purchasing a maintenance contract. “We were out there almost every August to deal with things like dirty filters and belts that had broken because they hadn’t been changed in years,” says Mikes. “I reviewed all the work we’d done and explained how much more they had paid us, compared to being on a regular maintenance contract.” That customer now renews his maintenance contract annually.

Provide some perks. Maintenance contracts often appeal to customers who like being able to control an expenditure or reduce the risk of a breakdown. With other customers, Air-Tro emphasizes additional ways a contract makes their life easier. “We give them priority on scheduling and on our best technicians. A contract also gives them a consistent technician coming on a regular basis, who knows where the thermostat is and how to get up on the roof without having to ask a lot of time-consuming questions,” says Helbing.

Kahn Mechanical emphasizes its recordkeeping abilities, so businesses don’t feel overwhelmed by logging repair and maintenance activities themselves. Without being asked, the contractor also provides its contract customers with a budget for replacement as equipment begins nearing the end of its lifecycle. That proactive approach provides customers time to work the anticipated cost into their own budgets.

Don’t gloat. Mikes has lost count of how many customers have turned down a maintenance contract for new equipment. “Many think that having a one-year warranty means a unit doesn’t have to be touched for a year, even if it’s in a building with a lot of traffic and dust. Then the customer calls us within six months because the filter is clogged up,” notes Mikes. Resisting the temptation to say, “I told you so,” can lead to a more trusting and long-term relationship with the customer, as well as word-of-mouth referrals.

Maintain contact. Periodically check in with contract customers through phone calls, emails, and personal visits, to ensure they are satisfied with the service and know they can turn to you for other HVAC needs. “By constantly communicating with them, you’ll know when there’s a problem and be able to fix it. Otherwise, they may just cancel the contract and you won’t know why,” says Keith Paton.

Ongoing contact also underscores the value of having a maintenance contract, particularly for bottom-line-oriented businesses. Paton observes, “Price becomes less of an issue when the customer is getting service, information, energy savings, and more out of the relationship.”

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Posted In: ACCA Now