How to price an HVAC maintenance agreement

Most small-shop maintenance plans are priced one of two ways: copy whatever the big company across town charges, or pick a number that 'feels right.' Both methods share a flaw — you have no idea whether the plan makes you money, so you never push it, and it quietly dies.

Pricing a plan properly takes one evening and basic arithmetic. The method: cost the visits honestly, decide what member discount you can actually afford, and set a price where the margin stays visible — meaning you can see, on paper, what you earn per member per year. Here's each step, with a worked example using round numbers.

Step 1: cost a visit honestly

The number-one pricing mistake is costing a tune-up as 'an hour of labor.' A maintenance visit consumes more than wrench time, and every piece you ignore comes straight out of your margin. Cost all of it:

• On-site labor — the real time a proper tune-up takes, at what an hour truly costs you (wages or your own time, payroll taxes, insurance), not at your billing rate.
• Drive time — the truck and the tech are consumed by the round trip just as surely as by the visit. Maintenance runs are often scattered, so don't pretend this is zero.
• Materials — filters, coil cleaner, contactor you swap under the plan, the miscellaneous shop stock every visit nibbles at.
• Admin time — scheduling the visit, the reminder, the rescheduling when the homeowner forgets. Small per visit, real over a hundred visits.

A worked example — these are round illustration numbers, not a price list; plug in your own. Say a thorough visit is 1.5 hours on site at a true loaded cost of $40/hour, so $60. Add 45 minutes of drive and admin time, call it $30. Add $25 in filters and materials. That's $115 per visit, and a two-visit-a-year plan costs you $230 per member per year before any discount you promise. Notice that's likely double what 'an hour of labor' would have told you — that gap is where plans quietly lose money.

Step 2: decide the member discount you can afford

Most plans include a repair discount for members — commonly somewhere in the 10–15% range. That discount isn't free marketing; it's a real cost that arrives later, whenever a member needs a repair. Before you print it on a flyer, do the arithmetic: if a typical member spends a few hundred dollars a year on repairs, a 10% discount costs you a few tens of dollars per member per year. Add that expected cost to your visit cost from step 1.

The trap is promising a big discount to make the plan sell, then discovering it eats the margin on every repair for your best customers. Pick the number you can live with on your busiest repair week, not the number that looks best on the flyer. A 10% discount you honor cheerfully beats 20% you resent.

Step 3: set the price with the margin visible

Now the price is just cost plus the margin you choose — written down where you can see it. Continuing the example (again, illustration numbers only): visits cost $230, expected discount cost say $30, total $260 per member per year. Price the plan at $349/year and your margin is $89 per member — visible, honest, defensible. Price it at $249 because a competitor did, and you're paying customers $11 a year for the privilege of extra work. Same plan, opposite business.

Keep that per-member margin number written down and re-check it once a year as wages and materials drift. A plan priced in 2023 and never revisited is usually a plan losing money by 2026. And remember the margin math only counts what's on the page — the real upside of a plan (first call for replacements, steady spring and fall work, repairs found during tune-ups) is extra on top. Price so the plan stands on its own, and let the upside be upside.

Annual vs monthly billing

Same plan, two ways to collect — and the choice changes your cash flow and your renewal workload. The trade-offs, honestly:

1. Annual, paid up front (the $349 in our example): cash lands in your account today, one payment to collect, one renewal conversation a year. The downside is one bigger yes — some homeowners balk at a few hundred dollars in a way they never would at a monthly charge, and every renewal is a real decision point where you can lose them.
2. Monthly (roughly $29/month in our example): a much easier yes, and renewal becomes the default — the card just keeps charging until they cancel, which most people don't. The downsides are drip cash flow, card fees on twelve small charges instead of one, failed-payment chases when cards expire, and members who cancel mid-year after using both visits.

A reasonable small-shop default: offer both, price the monthly a touch higher in total (twelve × $29 is $348–$399 territory depending on rounding), and gently steer to annual — the up-front cash matters more to a one-truck shop than to anyone else. If you bill monthly, take card on file only; invoicing someone twelve times a year by hand is a part-time job you didn't want.

Priced right, the plan becomes your favorite product

A correctly priced agreement gives a small shop the thing it never has: predictable work in the shoulder seasons and a customer list that calls you first. But the pricing is only half the job — a plan nobody offers earns nothing, and a renewal nobody chases expires silently. When you're ready for that half, read selling maintenance agreements without feeling like a salesman. Price it this week: cost your visit honestly, pick your discount, write the margin down. One evening, a calculator, and you'll know something most shops never do — exactly what every member is worth.