Service contracts?

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jjhoward

jjhoward

Senior Member
Location
Northern NJ
Occupation
Owner TJ Electric
Has anyone offered a service type contract to establish some repeat business?
An instructor I had (an EC -> attorney) claimed he offered service contracts to residential customers for simple things: ie, 2 visits a year to replace bulbs in the chandeliers, test GFIs, motion sensor whatever else applied. The service contract was intended to get that customer locked in with your services and of course land other work once you get there for the service tasks.

Any experience with this tactic? Any suggested service contracts ?

Thank you.
 
We have tried it, although with not much sucess. We have much better luck with HVAC contracts and what we call full service agreements, where we fix whatever goes wrong on your HVAC unit. We do have annual thermography inspection agreements and group relamping contracts, but since there are so many possible things to go wrong on an electrical system, the cost of the full service agreement to protect our potential risk would be unattractive.

I guess you could set up something that would cover "up to" limits and not expose yourself to too much risk.
 
Now days it would seem to me that it would be to expensive to send out a truck just to change light bulbs. Also I would worry that I would get real busy and then not be able to fit in some small job and then I would be the one breaking the contract.

I used to tell people that I did not advertise, I did not have business cards and I even had an unlisted number and I had more work than I could handle.

My quality of work and my fair prices were all I needed to lock in a customer and to have them recommend me.

I once did so much work on a particular street that I was actually recommended back to the first person that I had work for on that street.
 
Service contracts just don't work with Electrical, or all the big shops would be pushing them. HVAC, Pool cleaners, & pest controls have it made with the service contracts.

I have gathered an E mail list from my customers over the years and once a quarter I'll send something to them, usually suggesting something...
For example, Whole house surge protectors, Dimmers to save bulb life & electricity, right now its emergency generators with the hurricane season here.
I'll also remind customers to change the batteries in the smoke detectors and Test the GFCI's
I am surprised every time by the number of people this gets forwarded to.
Sometimes its just good to keep in touch with them & let them know your still in business and thinking of them.
 
The POCO in my area offers electrical service contracts. They will fix just about anything that goes wrong, with some exclusions of big ticket items and a deductible, for something like $48/year.

They entered this market after deregulation and purchased "roll-up" companies and formed a different company for this venture. They offer contracts for HVAC, Plumbing, Electrical,....you name it, they'll do it!

I suspect if you have enough capital (like a POCO), enough volume (contract sales), and accurate marketing statistics predicting frequency of use, that this might produce quite the cash flow.

Consider how attractive and useful this would be to the aging population,
which is projected to be a big market. Maybe not a bad idea if you can wing it.

Bob
 
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