Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
Diversify Your Business by Offering a Maintenance Plan
Mike Carden, CGR, CEO of MUI Corp. in Birmingham, Ala., was baffled about why consumers didn't have a means to service what, in most cases, is the largest investment they own, and he came up with a vehicle to change that in his market.
|This brochure for MUI's Exterior Maintenance Contracts details the scope of work, which examines the exterior from ridge line to ground.|
Consumers can buy maintenance and/or service plans on almost everything they purchase, from cars and jewelry to VCRs and bicycles. Mike Carden, CGR, CEO of MUI Corp. in Birmingham, Ala., was baffled about why consumers didn't have a means to service what, in most cases, is the largest investment they own, and he came up with a vehicle to change that in his market.
Carden introduced Exterior Maintenance Contracts (XMCs) in June 2002. After doing a simple initial inspection of a home's exterior, MUI gives the homeowner an estimate on how much it would cost to start a contract. If the homeowner opts to initiate an XMC, the terms provide a second, more thorough exterior inspection; four hours of labor to fix minor problems; and a post-inspection, six-page outline or footprint of the home's exterior as it currently exists. The report includes pictures and highlights any potential problem areas.
The customer then can proceed with all, some or none of the suggested repairs or maintenance work. Once an XMC is established, if that customer contracts any exterior work or another remodeling job with MUI before contract renewal, the customer gets preferential treatment with a faster response and 10% off the cost of the job.
With 15 customers signed up thus far, the XMCs have averaged between $850 and $1,000, as many of the homes MUI services are large and upscale, with numerous elevations. This fee is paid upfront at contract initiation and again at each renewal.
"The XMCs have been a godsend through a tough time when we weren't getting a whole lot of other types of remodeling work," Carden says. "One month we signed five XMCs and two [remodeling] contracts. It's provided that fill-in to keep my guys busy and gotten me lifelong customers."