A service-agreement base is the part of a heating company's revenue you can count before the phone rings. This chapter of the annual plan works out how many members you have, how many will renew, how many you can add, and when their visits should be scheduled so they fill the quiet months instead of crowding the busy ones.
What it is
Agreement planning treats your members as a small subscription business inside the heating company. It has four numbers: members at the start of the year, the share who renew, new members added, and visits per member. Together they give you two outputs the rest of the plan depends on: a revenue floor by month and a block of technician hours that must be reserved.
Agreements matter for a second reason. Members tend to call you first when a system fails, and a member with a system near the end of its life is the warmest replacement lead the company will ever have. The plan counts that too.
Who it is for
- Companies with an agreement programme but no clear count of active members or renewals.
- Owners whose spring and summer cash flow is thin enough to cause worry.
- Furnace or boiler shops whose newest heat-pump customers have no maintenance relationship yet.
- Companies planning to sell the business someday, since recurring revenue is one of the first things a buyer asks about.
What's included
- A member count you can trust. Active members by renewal month, cleaned of expired and duplicate records.
- A renewal rate measured from your own history, by system type if the data allows.
- A new-member target, split between install attach rate and sales to existing customers.
- A visit calendar that places agreement visits in the shoulder months, set against the capacity model.
- A revenue floor by month from agreement fees alone, so you know what is covered before any new install.
- A replacement watch list: members whose equipment age makes them likely buyers in the plan year.
A worked example
A company starts the year with 900 members. Its records show 78% renewed last year, so it plans on about 700 renewals. It installs 250 systems a year and attaches an agreement to 40% of them, adding 100 members. A spring campaign to non-member repair customers is planned to add 60 more. That ends the year near 860, slightly down, which tells the owner something important: renewals, not new sales, are the lever. Moving the renewal rate from 78% to 85% keeps about 63 more members than last year's rate would, which is worth more than the whole spring campaign.
Each visit takes about 1.5 hours, so 860 members on one visit a year means about 1,290 technician hours. Spread over September and April to June, that is manageable. Squeezed into October and November, it competes with every no-heat call.
Timeline
This chapter is built alongside the demand calendar, because agreement visits are both demand and a tool for moving demand. The full engagement schedule is set out in writing in your proposal.
How results are measured
- Active members at each checkpoint, against plan.
- Renewal rate for each renewal month as it closes.
- Attach rate on new installs.
- Share of visits completed outside the peak, from dispatch records.
- Replacements sold to members, against the watch list.
Mistakes to avoid
- Selling agreements the crew cannot deliver. A member who never gets a visit does not renew and tells the neighbours why.
- Counting signed agreements instead of active ones. Lapsed members inflate the base and hide a renewal problem.
- One renewal date for everyone. Renewals bunched into one month create a cash spike and a scheduling jam. Spread them by install date.
- Ignoring the replacement signal. Members with older equipment should hear from you before the season, not after a failure.
For the maths in more depth, read the guide to service-agreement maths. For more on agreements as profit, see hvacprofit.ca. How agreements feed the full plan is explained on the annual growth plan page.
Frequently asked questions
How many agreement members should a heating company have?
There is no universal number. The useful ceiling is the number of visits your technicians can complete in the shoulder months without touching the peak. The plan works that ceiling out from your hours, then sets a target below it.
What renewal rate should I assume?
Your own, measured from your records, is the only honest starting point. If you have never tracked it, the first job of this chapter is to count how many of last year's members are still active.
Should agreements be sold at install time?
Usually yes, because a new system owner is the easiest member to sign. The plan sets an attach-rate target for installs and tracks it at each checkpoint.
Do you write the agreement terms?
No. We plan the numbers and the marketing around agreements. The terms and any warranty or legal wording are yours to set with your own advisers.