This document discusses the benefits of a three-year service agreement plan for technicians. It offers customers a discounted total price of $450 for the agreement paid through monthly installments of $10.59. For companies, it aims to increase annual gross sales by $337,500 through 750 premium agreements. The estimated cost of sales is $45,600, resulting in estimated gross profit of $74,400 or 62% gross margin. The document emphasizes that service agreements can be mutually beneficial for customers, technicians, and the company at large.
1. Service Agreements
“Golden Handcuffs”
7/13/2012 "Together We Can Do It" 1
2. Overview
How service agreements impact
financially
Making it easy by monthly debit
Impact of spiffs
Impact on gross revenue
Win….Win….Win
7/13/2012 "Together We Can Do It" 2
3. Three Year Premium
Plan
First year…………$159.95
Second…………….149.95 6%discount
Third………………..140.95
Total……………….$450.00
Upfront payment… $79.95 (For Spiff & Admin
Fee)
Monthly debit of $10.59……..35 months
Always except…cash…check…
7/13/2012 "Together We Can Do It" 3
4. Benefits and Goals
Service Calls………….Day……Week……Year
4 20 1000
Agreements Sold
50%.........2……….10……….500
25%.........1………..5………..250
X 3 Technicians………..3……….15……….750
Example for all associates
7/13/2012 "Together We Can Do It" 4
5. Company Impact
Increase Annual Gross Sales
750 Premium Agreements = $337,500
750 One Year Agreements = $120,000
7/13/2012 "Together We Can Do It" 5
6. Looking at Cost
Cost of Sales….Labor @ 25% = $30,000
…..Spiffs @ 6% = 7,200
…..Materials @ 2% = 2,400
…...Admin @ 5% = 6,000
Total COS……………………………$45,600
COS….Cost of Sales
(COS for Service Agreement Sales only as estimate)
7/13/2012 "Together We Can Do It" 6
7. How the Numbers Work
AGS from SA…….$120,000
Minus COS……….$ 45,600
Gross Profit……….$74,400 or 62% GM
Based on income of $41,600 a spiff of $2,49
Each Tech gets 6% annual raise
AGS….Annual Gross Sales
SA……Service Agreements
COS….Cost of Sales
GM…..Gross Margin
7/13/2012 "Together We Can Do It" 7
8. Summary
Make it easy to own a Service Agreement
Think about your personal goals to sale
agreements
Remember how sales contribute to the
company’s goals
Win for the customer
Win for associates
Win for company
7/13/2012 "Together We Can Do It" 8
9. NOTES
All numbers, percentages, and amounts
used are for example only.
Your outcome should be more positive,
based on how motivated you are in
setting Goals for your associates.
If you are committed, it will be a
department in your company.
7/13/2012 "Together We Can Do It" 9
10. Coaching for Contractors
“We can’t change the wind but we can adjust our sails”
Business Systems and Solutions
Flat Rate Pricing Software
(Flat Rate Plus TM)
Service Management & Accounting Software
(Total Office Manager TM)
1099 Heathwood West Dr. Cookeville, TN 38506
615-545-3551
7/13/2012 "Together We Can Do It" 10