Have you ever done the maths on how many boiler services are required to pay yourself or another engineer a decent wage, plus all the overheads necessary? 

In this month’s Boiler Business column, we are looking at why companies should focus their marketing and business systems on attracting and serving selected annual service customers. We will also cover why are service customers are just as important as installation customers.

Before sharing my views, let’s consider some basic numbers. I will base these figures on our recent poll of The Boiler Business community. We asked them what they charge homeowners for their ‘standard’ annual boiler service, with no parts required. 

Using the answers from 170 Gas Safe-registered engineers from across the UK, we found that the average cost to homeowners is £80. Working with that average, since most engineers are VAT-registered, we can deduct the VAT and use £66.66 for the following calculations:

  • 100 x standard services @ £66.66 = £6,666
  • 500 x standard services @ £66.66 = £33,330 
  • 1,000 x standard services @ £66.66 = £66,660. 

Work it out
Before reading the rest of this article, you may want to make similar calculations using your own fee as a basis, if it is different than the one we used. 

  • 100 x standard services = £
  • 500 x standard services = £
  • 1,000 x standard services = £

So, why should we focus on building a service database? Although building your service database to 500 or 1,000 may seem daunting when you first start building your business, ask yourself this – how long would it take to grow these service numbers solely from follow-ups to boiler installations?

On our marketing and sales training day, we discuss long-term strategies to build your customer database. We make the case that if you can learn how to attract customers for boiler installations, you can use the same methods to attract customers that are seeking a new supplier for their annual boiler service. 

Yes, you need multiple boiler services to make the same money as a boiler swap, but the long-term value of five, six, seven, or 10 regular customers is also worth considering. That £80 service could be £400 over the next five years for each customer. As an added bonus, every new customer represents opportunities for future referrals and database growth. 

What’s your capacity?
Understanding your personal capacity, or that of your team, is essential to controlling the numbers in the business. Were they working flat out five days a week, 12 months a year, minus holidays, one person could potentially complete the following volume of job over the year:

  • 230 service days a year x four services a day = 920 services a year
  • 230 service days a year x five services a day = 1,150 services a year.

The problem with the above figures is the sheer volume of customer service that comes with those numbers. If you are a one-man-band, out in the van doing the work, who will answer all the calls and emails and arrange the work with the customers? 
It is therefore important to plan our business, know what we are building, and know the required numbers to achieve it.

Added value over volume
Rather than pushing the volume up, another option is to focus your marketing on attracting customers that are happy to pay more for their boiler service. Service plans are an excellent way to add more value to the service and increase profits. Service and repair plans are also good solutions for the more experienced repair specialists. 

How about working on the tools three days a week, nine months a year? That still represents 117 service days per year; approximately five services per day or 585 services per year. 

Personally, I like the plan for servicing three days a week, nine months of the year. That’s an excellent place for a family-oriented individual, allowing every school holiday off with the kids. 

What about you? Can you make the numbers pay enough for this laid back lifestyle business? 

Here are those numbers again:

  • 117 service days a year x 5 services a day = 585 services a year
  • 585 x standard services @ £66.66 + VAT = £38,996 Net
  • 585 x standard services @ £83.33 + VAT = £48,750 Net
  • 585 x standard services @ £100 + VAT = £58,500 Net.

Could you lead a comfortable life on these figures, working 117 days a year?

Consider what you want from your boiler business. A service-based specialist could be your future if you crunch the numbers. Ask yourself: what are your current service fees? Could you charge more in the future? What is your service capacity? Can you make the sums work?

This article is based on tasks set during the Built to Last marketing and sales training day.

For more industry-focused business chat with 1,400 other heating engineers, videos, and training dates, head to www.facebook.com/groups/TheBoilerBusiness