Top Reason Residential Maintenance Contracts are Bad Business



I've recorded a number of videos on why I think contracts for residential maintenance are completely unnecessary and I'm against them so I'm gonna record one more video and I'm going to give you one reason I'm going to condense it down so if you want a bunch of reasons Google contracts lawncare you'll find some of my youtube videos and potentially a blog post or two but I'm going to give you the one deciding factor if if there were no other reason and there was only this one reason this is why I do not believe in and would not Institute residential contracts in my business you probably well you may or may not agree many don't but here's the reason speed your prospect is not sitting around saying man I wish that my lawn care provider my pest control provider my whatever provider would make me sign a contract to remember I'm focused on residential maintenance they're not sitting around saying that they're not saying you know I really would like to sign a contract for four thousand dollars and lock me up for the rest of year and if my husband loses his job or we want to move or something goes wrong or I don't like the provider I would really like to be in a contract when that happens nobody wants that that is not the way they want to work with you and so why not take that completely out of the question because when you add it you create resistance and you slow everything down because now you have to measure everything you have to figure out in advance for the whole year what they might need and you have to sell all that to them and then they have to have a family discussion about whether or not you're the best provider for four thousand dollars versus another and if they should sign the contract is this a good idea should we really include that service that they quoted or take it out maybe just do it next year it complicates everything slows everything down and you have opened the door for your competitor who is potentially I'll go with more savvy may be unfair but it's thinking a little bit differently and he's focused on speed and he has a inordinate opportunity to win the business over you so for example let's just break it down company a Company B Company a says you know what we don't require Trax we might even know how to price over the phone for certain services you call us we answer the phone every time you call mr. prospects so every time the phone rings we answer the phone and then we find out what you need we give you a price over the phone we make you a client right there we don't require contract nothing done solved that prospect is off the market they're not priced shopping the rest of the companies that they already called that call back with prices probably won't get return phone calls they have solved a problem mental to-do list item get lawn care company checked off out of their mind done finished they're on to everything else going on in the world soccer practice and church and work and everything else they're done with that they don't it's their sold their your client company B talks to the same client hopefully answers the phone and they have to come out and walk the property and give an estimate and they need to have a conversation about everything you might want to buy and then they find a few things at the property that they want to go and propose now that you might need this year so then get in the contract then they have to write the contract and they have to send you the contract and there might be a little back-and-forth you know this the game okay who wins in that deal me or company a who like solves all your problems and solves your to-do list you know it gets that thing off your to-do list in a twenty minute phone call fifteen minute phone call done finished or company B that turns this thing into a five day ordeal who wins Company A wins almost every time there might be one exception if company a Sox their quality sucks their customer service sucks and Company B is great okay now Company B is definitely still in the running but if we have two similar companies in terms of quality and service company in a generally wins that game now imagine that Company A and B each spend a hundred grand a year on marketing and for a hundred man you need a good return on investment you need it you need a hundred grand to yield you a lot of new clients that spend a lot of money who wins that game company a wins that game because they can convert at a much higher percentage a lot more clients for their marketing spend than Company B their company keeps getting bigger and bigger and bigger well Company B slowly gets bigger they have more and more money to spend on better service better people better equipment more marketing on in on and on and it just sort of amplifies it compounds and that company just keeps being bigger and bigger and bigger well company B says I don't understand why this markets so hard I don't understand why I can't get big company a must just be getting lucky no company a made a really savvy decision to optimize their business around speed and what the client wants and they don't require contracts and Company B didn't do that and therefore they grow slower and they don't understand why they're growing slower now are there exceptions of course are there companies that require residential maintenance contracts that have multi multi multi-million dollar companies that make lots of money and do fantastic of course but they're generally really savvy at sells they're also really on top of things they probably do a fantastic job of renewing they they spend a lot more money to do it and they have success with it most companies won't spend the money that those guys will spend most companies won't do the follow through that the guys that do maintenance contracts and require them and still win the game they probably don't have the same follow through that that company has can you be successful absolutely of course I'm just simply saying if you want to find the optimal business model my argument is it's the one based on speed I believe that that business model wins whether you're in Canada New York Texas Florida I don't care where you're at because you're giving the client a solution that they want and speed wins every day another example of speed company answers the phone company B doesn't answer the phone who wins the business we all know the company answers the phone wins because they're getting to the client the prospect quicker exact same thing with selling the business the job is to take that prospect off the market as fast as you can so they can't price quote you so they can't compare you before they get too busy and forget about it get too busy and say you know what I'll deal with it next month your job is to make that happen fast it's all about speed contracts do nothing to increase speed they slow everything down that's the one reason

13 Comments

  • George Drew

    April 13, 2019

    Interesting. I suppose it simply depends on why you're in business. Some people build businesses to sell them and having agreements adds much more value to the business versus hoping for new or repeat business. There's pros and cons to both sides, just depends on why you're in business.

    Reply
  • Brandon Ford

    April 13, 2019

    How do you pursue litigation or enforce late charges without a contract. My attorney insists you need a contract. We refer to the contract in court.

    Reply
  • Zach Poteet

    April 13, 2019

    company b can't get big because they don't eat enough junk food haha jk but this video is really helpful thanks

    Reply
  • Jerré Thompson

    April 13, 2019

    What happens when a client doesn't pay and you have no contract ? Seems like there has to be some type of exchange to protect yourself. And you need authorization to charge their credit card as well. I'd would love to not have to deal with contracts but please tell me how I can protect myself?

    Reply
  • chuckccfd9

    April 13, 2019

    I don't do contracts. I don't like to lock in client with paper work. If they no longer need my services they can call and I'll stop. The work no big deal. For every one. I lose I have 5 or 6 new one

    Reply
  • jaybrown29

    April 13, 2019

    What if you say ok your property is $50. You get there and there are lots of obstacles to slow you down. It should be $70.

    Reply
  • CUT Tree Service

    April 13, 2019

    Do you make them sign some sort of agreement that gives you authority to charge their card manually each time?

    I started this last year and had no complaints. But I'm concerned that I charge their card and they demand their money back or claim I was unauthorized to do that and get me in trouble.

    Reply
  • Brock Olsen: The Relationship Expert

    April 13, 2019

    How in the world are you giving prices over the phone?

    Reply
  • Patrick Wood

    April 13, 2019

    Totally agree.
    – Pro: Business scheduling freedom.
    – Con: Customers can cancel at any time.
    – Tip: Train regular customers to not demand cuts on a specific day unless you are available, avoid their vanity.

    Reply
  • Lester Barrett

    April 13, 2019

    Can you get to the point without beating around the bush? Time is important to your viewers too.

    Reply
  • Wrong!

    April 13, 2019

    Jonathon,
    I largely agree. But, what if you were to give them the option of a contract for a 5-10% discount in exchange for locking them down? Have you ever considered doing that for your company? Thank you

    Reply
  • LCR

    April 13, 2019

    Perfect! THANKS!!

    Reply
  • Aaron Morgan

    April 13, 2019

    I love your videos ?

    Reply

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