Maintenance Agreement Pricing Calculator

To price a maintenance agreement, add up what one plan costs you to deliver for a year (labor, materials, member discounts and admin), then divide by one minus your target margin. An HVAC plan with two tune-ups that costs $170 to deliver needs $283 a year, about $23.61 a month, to earn a 40% margin.

How do you price a maintenance agreement?

Start from cost, not from what the shop down the road charges. Work out what one agreement costs you to deliver for a year, decide what margin you want on the plan itself, and divide. Then compare the result with what your market will pay and decide, on purpose, whether the plan should make money on its own or work as a door-opener for repairs and replacements.

Annual price = [V × (H × R + M) + D × S + A] ÷ (1 − G)

1. 1

   Define what's in the plan.

   Number of visits, what each visit includes, and the member perks: repair discount, priority scheduling, waived trip fee.

2. 2

   Time a real visit.

   Use job history from your field service software. Include drive time; a 45-minute tune-up with 20 minutes each way is a 1.4-hour visit.

3. 3

   Use burdened labor cost.

   Take the tech's hourly wage and add payroll taxes, workers' comp, benefits and insurance. The labor burden calculator does this for you.

4. 4

   Cost the perks.

   A 15% repair discount costs 15% of what members typically spend on repairs. Check last year's invoices for members.

5. 5

   Pick a margin and compare with the market.

   Divide cost by (1 − margin). If the result is far above what customers will pay, cut visit time, change the perks or accept a lower margin knowingly.

Example maintenance agreement prices by trade

The presets in the calculator run the same formula on example plans for four trades. They show how visit count and visit length drive price far more than materials do.

Should a maintenance agreement make a profit?

It's a business decision, as long as you make it knowingly. In a 2023 survey reported by ACHR News, 72% of 100 responding HVAC contractors said they offer maintenance agreements, and 87% of 400 homeowners surveyed by Clear Seas Research said they'd pay either $100 or $200 a year for one. The example HVAC plan above costs $170 to deliver, so priced at $200 it earns $30 per member, and at $150 it loses $20.

Shops that price below cost are betting that members buy enough repairs and replacements to make up the difference. That bet can pay, but only if you track it. If you sell plans below cost, check every year that members' repair and replacement gross profit covers the gap. If you can't tell, price the plan to stand on its own.

Monthly or annual billing?

Monthly billing lowers the sticker shock ($23.61 sounds easier than $283) and renews itself as long as the card works. Annual billing collects cash up front and costs less to process. Many shops offer both and price the monthly option slightly higher. Either way, set plans to auto-renew and send a reminder before renewal; customers who have to re-sign each year drop off.

How many agreements can your team deliver?

Every agreement is a promise of scheduled labor. 300 two-visit HVAC agreements need about 600 tech hours a year. Schedule tune-ups in shoulder seasons, before the first heat wave and the first cold snap, so maintenance fills slow weeks instead of competing with emergency calls. Check capacity with the technician utilization calculator.

Common pricing mistakes

• Using wage instead of burdened cost. A $35-an-hour tech costs you well over $35 an hour once taxes, insurance and benefits are added.
• Forgetting drive time. On a route, drive time can be a third of the visit.
• Giving away perks without costing them. A repair discount, waived trip fee and priority service all cost money. Put a number on each.
• Selling more plans than you can service. Unfulfilled tune-ups turn members into cancellations and bad reviews.
• No renewal process. A plan that has to be resold every year loses members you already paid to win.