There are literally over a million ways to build your HVAC club membership, but where do you start, and more importantly, where do you stop? Having studied hundreds of the best (and worst) club memberships around North America, I have built this club membership based on sustainability, psychological implications, and consumer behavior. The best HVAC club membership is the one that easy for sellers to sell, and buyers to buy.
The goal of any club membership is to get a disproportionate share of your marketplace subscribed to your club, thereby taking them ‘out of the market’ from other HVAC companies. When prospects think of your company first, and like you the most, you have captured their heart. Once you’ve captured their heart, it’s left to your technicians and salespeople to satisfy the mind and open their wallets.
This means that your club membership is not a moneymaker, per se. At best, your club membership will cover off payroll in the shoulder seasons. When a company offers you that silly low, crazy high-value proposition to get you to become a customer, they are only hoping to cover the cost of generating you as a lead. Club memberships are kinda the same thing.
Don’t take this to mean you have to offer the empty promises of hype. Look at it as an opportunity to let your prospective customers decide if they like and trust you enough to get to know you better. A well-designed and executed club membership will give you that opportunity and then keep them happy for a long time.
Here is the best HVAC club membership model:
Preventative Maintenance Provided
- A springtime AC tune-up and cleaning
- An autumn heating tune-up and cleaning (premium only)
Club Membership Benefits
- Priority hotline
- 24-hour priority scheduling
- 2-hour arrival windows
- Schedule reminders
- 100% satisfaction guarantee
- 2-year workmanship guarantee
- 5%-10% off all parts and labor (no caps)
- $49 diagnostic fee (regularly $99)
- $50 - $100/year toward new HVAC system
- Surprise and delight factor
- Basic club membership
- $12.95/month for 1 visit a year (auto-renews yearly) or $16.95/month
- FREE for Military, Essential Services, and Seniors
- $6.95 for each additional on-site unit, $7.95 if paid monthly
- Premium club membership
- $19.95/month for 2 visits a year (auto-renews yearly) or $23.95/month
- Military, Essential Services, and Seniors only pay the difference
- $9.95 for each additional on-site unit, $11.95 if paid monthly
Offering 5% to 10% off of any bill is easy to manage and easy for technicians to remember. To discount more than this is just giving up unnecessary margin and makes you look like you are charging too much, to begin with. To have different discounts for different levels of membership incentivizes the premium membership, making it an easier decision for the buyer to upgrade. While there is likely inventory that you should not discount up to 10%, there are other items that you could easily discount more, balancing out the impact over your inventory mix. Don’t get bogged down in the details of each piece of inventory, simply price your products and services accordingly.
PRO TIP: NEVER discount without a really good reason.
When you apply an additional $50 to $100/year toward any new HVAC system you are demonstrating appreciation for your long-term relationships and loyalty. This is a valuable benefit to your club membership and incentivizes two things:
- Staying on the club membership to build up a juicy new unit credit.
- Choosing your company when it comes time to replace their HVAC system because they have a credit sitting on your books.
A 100% Satisfaction Guarantee is a bold message you self-impose on your technicians to get it right. Satisfaction is a completely subjective matter so it’s important to define what you mean by satisfaction, and what you provide if they are not satisfied. Refunding diagnostic fees and refunding an entire new unit sale are vastly different and clarity and transparency are key to turn an unsatisfied customer into a raving fan.
PRO TIP: Don’t invent ways to weasel out of paying up. Fewer limitations represent the greatest value and are a much stronger trust play. There is no better advertising than extreme satisfaction, particularly on the ugliest ones. Find a way to leverage the story.
Offering a 2-year workmanship guarantee on your service and maintenance demonstrates that you stand behind the work of your technicians. This guarantee also puts you back in the customer’s house instead of calling your competitor. There is little evidence to support lifetime guarantees are superior to shorter terms, as most clients are most concerned about immediate ROI. Lifetime could be perceived as a baseless claim, actually damaging your integrity and trust with the client. There is also a significant liability to properly holding a lifetime warranty on your books that can reduce your valuation when you go to sell the business. If you do wish to offer extended warranties, consider charging appropriately for them and building a proper strategy for delivering on those warranties (for example, third-party underwriters or a pooled escrow fund).
A springtime AC tune-up and outdoor coil cleaning gives your company the opportunity to improve the customer’s comfort, safety, and savings. Each visit gives your technician an opportunity to provide options for upgrades, deeper cleaning, and recommend the opportune time to start considering a new unit.
Like the springtime AC tune-up and cleaning, the autumn heating tune-up and cleaning is just another opportunity to impress your valued client.
PRO TIP: Place springtime and fall tune-ups and cleaning on separate lines – more line items, more value.
Diagnostic fees will vary in different demographic and geographic locations. The key to a good diagnostic fee is that it represents approximately two-thirds of your per call cost of running an individual call. In many states and provinces, this is approximately $150 a call. Club members should receive a 50% diagnostic fee reduction as it is a simple calculation of value in their mind, while still representing one-third of your truck cost.
You should always charge a diagnostic fee for repair work (not maintenance) and be willing to refund the diagnostic fee if the customer is not satisfied or if they opt to do the work with you, particularly if it is same-day service. Avoid trip fees or other complicated stacking fees that make it more difficult for the prospect to make an appointment.
Priority hotlines are a simple way to track your calls and demonstrate that your club members actually do take priority. 24-hour priority scheduling with a 2-hour arrival window demonstrates that you understand and believe that a client’s time is the most valuable thing you have influence over.
PRO TIP: Priority is priority. That means ALL repairs, maintenance, and installations for club members.
Schedule reminders make it easy to be your customer.
People are delighted when they are surprised. That means doing something valuable that they had no idea you were going to do. Goettl will swap out your fire alarm and CO2 detector batteries for you. Others give out generous quantities of flashlights, ice cream bars, and other interesting bits as a way of saying thanks unexpectedly.
Offering two options, one visit or two visits a year is based on rational choice theory. When a person is given the choice between two to five options, they are inclined to choose the best of the options provided. When the person is offered the choice of taking it or leaving it, they will more often leave it. This is the primary reason why your club membership should have two options. As an additional point, this allows you to offer a free (or deeply discounted) option to our most cherished members of society.
Offering a yearly price and a slightly higher monthly price is something digital marketers have made mainstream in recent years. There is more value for your company to get money today than to have it trickle in over the next 12 months. This is known as the present value of money. To keep it really simple, money now is always better than future money when creating club membership pricing models.
There is another rising concern about monthly payments, subscription fatigue, and it’s not just streaming services that are implicated. Customers feel like they are facing financial hardships by a thousand tiny cuts, bleeding them of their cash reserves. Home service companies also get bundled into this ever-growing group of monthly payments that are slowly overwhelming North Americans. In short, if you can get paid upfront for your club membership program, take it.
In a study performed by Adaval and Monroe, there is a perceived saving when you expose the prospect to a higher number. $24.95/month acts as a decoy price to the $19.95/month when paid on an annual basis. Note that we are never saying that the price is $240/year, rather we are still providing the monthly impact so that the comparison is easy and enticing.
Given that a truck costs approximately $150/call, $12.95/month at 1 visit a year would cover the expense of one visit. You will want to eliminate renewals and set up all club memberships on annual auto-renewals. By putting your monthly service at $16.95/month (with no end date), you are creating a disincentive to pay monthly. This means you get paid now, which is ALWAYS the best option and reduces the exposure to subscription fatigue. Think of it as the reverse psychology of giving a discount for paying upfront.
Offering a FREE basic club membership for active military personnel and veterans, essential service providers, and senior citizens is a brave and bold move. Actively promoting it proudly is even more courageous. After all, you don’t make money giving things away for free, right? However, when you think of the goodwill associated with this strategy, it will more than pay for itself by many multiples. You now have the opportunity to serve those who serve us, and offer the added value of the club membership with no further discounting to each of these groups.
Strategically, the BIG discount of your club membership saves you having to offer BIG discounts on everything else you sell as well. This means eliminating the additional discount on a new unit sale, in lieu of savings you pass along by way of a free club membership. Thinking of it this way, you appear considerably more generous by offering something of real value at 100% off, than offering a large ticket sale at 10% off.
PRO TIP: Don't want your club membership to be free? Charge $1 a month instead.
Once you’ve provided your first maintenance, and established trust and rapport, go ahead and upgrade them to the premium service for the difference between the two programs. If they have multiple units, you can service those additional systems for as low as $6.95 for each additional unit (at the same address). Just like a car dealer, this is about getting the car onto the hoist. A club membership is not meant to be your big moneymaker, rather your low barrier to entry.
To upgrade to the premium package is $19.95/month for two visits a year or $23.95/month. Military and veterans, essential services, and seniors only pay the difference to get the premium package, realizing real value. Those who have multiple units only need to pay as low as $9.95 for each additional unit onsite.
Club membership is the lifeblood of your HVAC business. The more work you can do providing maintenance in the shoulder seasons, the more stable your business is for growth. A large membership base will feed your technician's hours, improving their income and yours, and allow you to improve their skills and knowledge in the field. Every successful HVAC business has a happy, healthy, and abundant membership base and you deserve one too.