USE SERVICE CONTRACTS TO BOOST REVENUE
Dealers can expand offerings in their service contracts to reduce their liability and increase customer retention and revenue, Justine Falletta, operations and marketing manager for the Powderhorn Agency, an insurance agency in Brookfield, Conn., said in a session called, “How to Better Use Service Contracts to Increase Revenue.”
The idea is that the dealer is a trusted partner with the homeowner, Falletta said. “They’re already in the home, providing service for HVAC and for oil deliveries,” she said. Other services can be offered to customers, she said. Giving more options to better serve customers creates a “stickier” customer relationship, Falletta said.
For example, an oil tank protection plan can be offered that provides cleanup and tank replacement coverage. Powderhorn Agency’s main offering is such an oil tank protection program, which it offers to customers through heating oil dealers, Falletta said. “We have about 500 oil dealers that participate in the program,” she said. “They offer our protection program to their customers.” Powderhorn covers 13 states, with the majority of its business in the Northeast.
Another way to build business into service contracts is by offering home warranty programs. When customers sign up for home warranties offered by realtors and others, fuel dealers are missing an opportunity, Falletta said. The customer is getting service from whoever the home warrantor uses as a vendor, Falletta said. “You can offer your own home warranty program and that way you can guarantee that you provide [those] services to your customers,” she told attendees. “Your customers still get the added benefit of having the home warranty coverages.”
Warranties on HVAC—including water heating—and on electrical and plumbing work can be offered by oil dealers, Falletta said, especially by the many oil dealers with employees who are licensed plumbers and/or electricians.
“The overall concept is to create a stickier customer relationship by offering these services, and increase revenue per customer,” Falletta said. It helps another way too. “If the oil dealer down the street is price-oriented, your customer is going to be more likely to stick with you because of the warranty programs he or she signed up for,” Falletta said.
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