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Why Do Contractors Offer HVAC & Plumbing Extended Warranties Part 3 Increasing Revenue and Profit

ESA's & Increasing Revenue and Profit

Video Transcription

Typical First Steps Contractors Take

Adding additional revenue and profits for your business. When contractors first set out to increase revenue and profits, they'll do one of two things they'll either market their products and services to new customers and as their customer base expands their revenues and profits will follow. Another thing they might do is expand the product offering to their current customers. For example, if you're in the HVAC industry you might add duct cleaning as a service or you might expand to other products like indoor air quality. As you market these products and services to your current market or your current customer base your revenues and profits will grow.


Doing this presents some challenges as you add additional products and or services, you're going to need to possibly take on additional inventory and you're going to have to make investments in new equipment. You will also need to train your staff on how to both sell these products and also how to install them. If you are adding a new service, you're going to have to train your technicians on how to administer these services.


There are challenges that come with adding additional profits through new products and or services and getting back to marketing anytime you market your business there is an investment that takes place before you could actually execute on that marketing. Before you could actually run new ads you might have to upgrade your website and take time to decide what types of offers to run.

Lead Time

In addition to an investment, there is also a lead time that comes with these decisions. From the time that you decide you want to start offering the service or this new product there's going to be a period of time where you're going to need to train your staff and practice installing the new products at your shop. It could take several months before the decision to venture into a new product or service is made and the time that you're going to actually offer them.

For more details on Trinity Warranty for equipment owners visit ESAs designed for Equipment Owners

Extended Service Agreements

Unlike marketing your products and services or adding additional products and services to your current business, including extended labor warranties is very unique in that you're not really adding an additional product and or service you're just enhancing your current products or services. If you're an HVAC contractor instead of offering your basic one-year labor guarantee now the additional revenue and profits will come from the markup that you choose for these products. One route that contractors take is that they'll include some sort of extended labor with every install, so let's say 10 years’ worth of labor with every install, they will add that coverage to their proposals and the markup for that coverage on every proposal that they put out as they do that the revenue and profits for every job will increase.

Other contractors take their standard process and they'll offer their customers options of three, five or ten years extended coverage above their standard one year. Another benefit of offering this coverage is that you can go up to two years for the date of install to offer this coverage. Which means if you enroll today, you have two years’ worth of customers that you can call upon and offer this extended coverage too. Contractors usually see a jump in revenues and profits in the first few months after they enroll with a provider like us because they're taking that time to market these products to their previous installs.

For more details on Trinity Warranty for contractors visit ESAs designed for Contractors