How to price a maintenance plan

Start with what the visits cost

A maintenance plan is mostly labor. Cost each visit the same way you cost any job:

1. Time on site for the checklist, done properly, not rushed.
2. Drive time to get there. Plan visits are easy to route, so this can be lower than a service call.
3. Materials included in the plan: filters, a flush kit, test strips, a tag.
4. Multiply the hours by your cost per billable hour (see how to set your labor rate), then add materials.

Use cost, not your selling rate, at this step. You want to know what the plan costs you before deciding how much profit it should carry.

Then cost the perks

Members expect more than the visits. Every perk has a cost, and you should know it:

• Repair discount: commonly 10 to 15 percent off. Make sure your repair prices still carry a healthy gross margin after the discount.
• No trip charge or diagnostic fee: you give up that fee on every member service call.
• Priority scheduling: members go first in a heat wave or freeze. It costs nothing in dollars but uses capacity on your busiest days.
• Extended labor warranty on repairs while the plan is active.

Estimate the perk cost per member per year from your own history: how many service calls a typical member makes and how much repair work they buy.

Worked example: an HVAC plan

Example only, with made-up numbers. An HVAC shop's cost per billable hour is $152. The plan includes two visits a year, a cooling tune-up in spring and a heating check in fall.

A price of $399 a year (or $35 a month, $420 a year) covers the visits and materials. It does not cover the perks on its own. The shop accepts that because the visits are booked in spring and fall, when techs would otherwise have open hours, and because members buy their repairs and their next system from the shop. If you need the plan to pay for itself fully, either drop a perk or raise the price. That is a decision, not a math error.

Worked example: a plumbing plan

Example only. A plumbing shop at the same $152 cost per hour offers one visit a year.

Priced at $249 a year, or $22 a month, the visit is covered and the perks are partly carried by repair work. The checklist itself has value: the tech finds the failing shutoff or the water heater near the end of its life before it fails on a weekend.

What to include, and what to leave out

• Include: a written checklist for each visit, a report to the customer with photos, clear perks, and the number of visits.
• Leave out: unlimited free service calls, parts included at no charge, and anything you cannot deliver in your busiest week.
• Be specific about systems: one system per plan, with an add-on price for a second unit or water heater.

Monthly billing and renewal

Monthly billing lowers the barrier to joining and makes canceling a deliberate act. Yearly billing brings the cash in up front. Many shops offer both, with yearly a little cheaper.

For renewal, store a card with the customer's permission, renew automatically, and send a notice before the renewal is charged, with a simple way to cancel. Check your state's rules on automatic renewals before you set this up. Plans that renew automatically and book their next visit keep far more members than plans that wait for someone to remember.

For selling the plan once it is priced, see how to sell maintenance plans.

How SWITCHBOARD handles this

In SWITCHBOARD, maintenance plans renew and book their own visits, the visit checklist runs on the tech's phone, and once plan visits are on the board, Plan the day rebuilds the next day's routes around them to cut driving.