April 13, 2015
Using Service Agreements to Improve Cash Flow
One of the most critical growth and profit areas for every Pest Control Operator to address are ‘Service Agreements ’. Simply put, these are those services that are rendered on some regular interval for some set fee with some associated guarantee of success. You want this business! And, you want more of this business!
We consistently recommend providing Agreements without contracts. Contracts are seen by your customer as heavy-handed and demanding. Let your agreements be contract-less and so more friendly. By not having a contract behind you, you’ll find you tend remember more often that you have to earn your customer’s business…every day.
Whenever you hear of new a Agreement service type you should perk up your ears. Light traps, rodent stations, termite stations, moisture control, or whatever. Don’t be too quick to dismiss the benefits of these types of services. Agreement services provide consistent income while providing top notch service to your customers. Research has consistently shown that customers will pay a little more for superior service. Your job is to make it easier for your customers to make that payment.
Good software can help you here, by providing a quick and easy method to create and track agreement renewals. In some cases, reminder letters can be set to print at preset number of days before due. In addition, automatic invoices may be an option.
Agreements can also help smooth-out your cash flow by letting you select when each agreement renews. For example, if you have 120 agreements in place, you could have 10 of them renew in each month. Or, to offset the low cash flow in mid-winter, you might have more of them renew then, with fewer at mid summer. Or, you might set up the agreements on quarterly installments.
Most Agreement-type services have a higher margin. Every pest control company should be offering several service options based on Agreements. Are you?