Customers are the key to success for any business. Building a customer base takes a lot of effort and financial investment. Keeping your customers happy and coming back is an important part of building a thriving business.
Retaining customers helps keep your business going. These long-term customers show customer satisfaction with a job well done. They can provide you with ongoing business and positive reviews. Hopefully, they’ll refer more customers to your business as well.
Understanding how to incorporate retention programs can benefit your business. Maintaining customer relationships is a lot less expensive than acquiring new ones. Let’s look at some tips and strategies to help boost customer retention for your HVAC business.
What is Customer Retention?
HVAC customer retention means maintaining customers over time. These customers continue to use your services to install, maintain, and upgrade their HVAC systems. The rate at which you keep or lose customers can greatly impact your business.
High customer retention means that customers return to your business for ongoing services. Lower rates mean customers tend to leave your business in favor of another option.
How to Calculate Customer Retention Rate
Understanding your customer retention rate (CRR) can provide insight into your business. This data can show you how your business maintains customers. The customer retention metric uses the data of customers retained over a specific period of time. This shows the percentage at which your business is maintaining accounts.
Being familiar with this data can benefit HVAC business leaders in various ways. These numbers can help pinpoint any weak spots in their business. This allows business leaders to develop strategies to help improve in these areas.
- First, select a timeframe.
- Subtract any new customers from the total number of customers at the end of the time period.
- Next, divide this by the number of customers at the beginning of the time period.
- Finally, multiply this by 100, and you’ll have your percentage of customers retained over that period.
Steps to calculate your retention rate:
- Start with the number of customers at the end of the time period (end).
- Then subtract the number of new customers that your business gained in the time period (new).
- Next, divide this new result by the number of customers at the beginning of the time period (start).
- Finally, multiply this number by 100. This will give you the percentage of customers retained.
The formula should look like this: [(End-New)/Start] x 100 = CRR
Say that you start your year with 50 clients. Throughout the year, you gain two new clients. However, you end the year with 46 clients.
This would break down to: [(46-2)/50] x 100 = 88% CRR
This formula is easy to use and can help you better understand how well your business maintains relationships.
Why Customer Retention Is Critical for HVAC Businesses
There isn’t always room to invest a lot in marketing, advertising, and sales. Focusing on turning existing customers into repeat customers can be much easier. These individuals trust your business already.
Improving your customer retention rates is a low-risk, high-reward business strategy. You’ve already invested in finding these customers. Now, you just need to maintain quality services and outreach. Focusing on the little details of customer service can go a long way.
Building customer loyalty creates a reputable business. Businesses known to be dependable draw in even more clientele. Investing energy into maintaining customers can also bring in new leads. So, why not focus on retention?
Here are some examples of why it can be so important to stay on top of customer retention management:
Customer retention costs 5 to 7 times less than customer acquisition. Gaining new clients often requires more marketing and output from your company. On average, the cost to acquire new HVAC customers ranges between $200 and $300.
Existing clientele can be maintained much more cost-effectively. Quality services, excellent customer care, and swift responses cost far less than the output for gaining new clients.
Increased company revenue
As little as a 5% increase in customer retention can increase company revenue by 25-95%. That is a significant impact with only a small amount of output from your business. Between 5 and 75% of revenue for small businesses comes from returning customers.
Upselling new and additional products
Customer loyalty means they will come to you for business. It also means that they trust you. This allows your business to upsell. Pitch them new products, features, and services. Returning customers are 50% more likely to try a new product or service than new customers.
Customer loyalty generates brand advocates
A loyal customer is a happy customer. Happy customers are much more likely to spread the word about your company. Eighty-two percent of satisfied customers will likely refer friends to your business. Additionally, customers referred by other customers have a 37% higher customer retention rate. This word of mouth is free marketing.
Loyal customers are one of the best ways to find more loyal customers. This is why customer retention is so important for small businesses.
With over 100,000 HVAC service providers in the US, your business may have some competition. Using a customer retention program will help your business stay ahead of this growing market. Maintaining existing customer relationships can be easier than competing for new ones.
What Does an HVAC Customer Retention Strategy Involve?
Customer retention strategies are an effective way to build customer loyalty. 60% of customers agree that the standard for the customer experience is higher than ever. Having a strategy to keep up with these standards will help you deliver a smooth and satisfactory customer experience. A happy customer is much more likely to be a loyal customer.
A customer retention program builds strategy and management for maintaining satisfied customers. This can include anything from employee training and HVAC service reminders to simplified payment processes.
Creating a customer retention program can look like this:
The onboarding experience
Onboarding new customers makes or breaks the business relationship. Your business should provide valuable information regarding your services and products. Always be available for any questions. And most importantly, ensure you deliver the service they’re expecting. That will help ensure a smooth start with your company.
HVAC businesses can provide user manuals, general maintenance advice, and quick DIY tips. This helps increase the customers’ trust in the product and your company. It also shows them where their where their money is going.
Premium customer service
Quality customer service is the gold standard for any business. It especially matters when looking to improve customer retention. Customer service is providing timely service and professional communication. It also means staying organized and efficient with your paperwork.
You might consider having customer service communication available through multiple routes. Provide a phone number to contact customer service. An email address can handle less pressing questions. You might want to include a chat box on your website to quickly direct customers to the answers they need.
Effective and superior execution of services
Your business should keep all employees trained. Technicians need to be current on HVAC installation and maintenance protocol. Employees will often be working in clients’ homes. They should be trained in consistency and respect.
This goes beyond ensuring that your HVAC systems are installed and maintained with the highest quality. Employee training should ensure respectful behavior and communication. They should always try for a timely response to any service requests.
Consistent follow-up and service reminders
Staying in touch with clients can help them feel valued. Automated emails can help with client engagement. You can automate review requests, appointment reminders, and service reminders.
Follow up after a service call. A review of the experience can show you where your business might need improvements. Staying current on reminders and communication can prompt more business from your customers.
Incentives are here to help. Offering return customers loyalty perks will increase engagement. It can also help upsell additional products and services. These perks could be anything that fits into your budget. Offer a free repair service, discounted services, and upgraded products.
Think about what you can reasonably guarantee and afford. Up to 80% of customers in a loyalty program are likely to stay loyal to that company.
8 Specific Ways to Improve Your HVAC Customer Retention Rate
Once you’ve established a program, focus on some specific techniques. Many of these ideas can be incorporated to help build solid customer retention.
Always ask for customer feedback
Asking for feedback allows business leaders to evaluate their services and employees. It also gives the customer an opportunity for input in their experience with your company. This can help to build customer loyalty.
As mentioned before, you can automate feedback requests to follow up after a service. This way, the experience is fresh in their mind. An honest and accurate review will be the most beneficial for company growth.
Feedback can be delivered in many ways: email, survey, and online reviews. Choose the option you feel will give you the most insight into improving.
Offer extended warranty on installations
Offering an extended warranty on initial installation builds trust. Most HVAC units are under a five-year warranty. However, your business could offer an extended warranty. Also, consider perks like free tune-ups or cleaning for the first year.
This incentivizes customers to sign up for your services. It guarantees that your business will be there if needed. An extended warranty could fall under your loyalty program if you choose to create one.
Engage on social media
Stay connected to your community and clients. When clients leave a comment on your social media, respond promptly and with courtesy. This goes for all media platforms.
If a client is unhappy, respond with an apology about their experience. Consider offering to repair their negative experience.
Try to monitor mentions of your business online. This will notify you if your business is popping up on any chats or forums. Then, you can be aware of public opinion and conversation.
Customer retention marketing
Build a profile based on long-term returning customers. This helps you develop marketing strategies. See what makes these loyal customers stand out vs. one-time customers. This information helps you target an audience more likely to remain with your company.
Age, location, income, and lifestyle are all important components of how and where people spend their money. Pay attention to the demographic of loyal customers. You’ll be more likely to attract more of the same.
Top-of-the-line customer service representatives
Your employees should always be kind, respectful, and helpful. However, your company may want to train someone in customer service management. This person can help manage inquiries, software, and hiccups that happen throughout the day.
Adding software can make working with your company a little easier. But it can be frustrating if everything is automated. Customers want to know that they’re interacting with a real person. Someone who knows how to solve their issue. No one likes chatting with a bot that keeps sending them in the wrong direction.
Train some employees in customer service. It will free up your technicians. This way, they can focus on providing the highest quality HVAC-specific services. Your customers are likely to feel more appreciated and valued. They know that all of their needs are being met.
Simplify communications through SMS
Field dispatch software can help you with customer communication. Some software solutions can update customers in real time.
On their scheduled service day, they’ll receive an SMS reminder. They can either confirm, cancel, or reschedule.
This software can also send information about the technician’s arrival time. This may make customers feel more comfortable.
Simplifying communications allows customers to easily adjust services as needed.
From One of Our Partners
The Best Small Business Field Service Management Software Has These Features
Incorporate customer retention software
Customer relationship management software can simplify handling accounts. This software gathers all customer data in one place. Any technician can access communication, files, and billing on the job. This makes changes easier to account for as they happen.
These programs can also send out reminders about services due. These reminders allow the customers to automatically schedule an appointment. This makes it smooth for the customer and will help fill the business calendar.
Automated services like this make the experience easy and friendly for the customer. They also ensure that little details won’t slip through the cracks.
Easy payment processing
Streamlining your payment systems will set your customers up for success. Consider setting up online payment processing and billing services.