By Greg Allan, tradesman and creator of Data First Coaching
Why do service agreements look fully booked but still lose money?
A maintenance contract can fill the book solid through summer and still cost the business money, because being busy and being profitable are two different things. Most HVAC technicians price a service agreement the same way they price a one-off split system install: cost of parts plus a markup, times the number of units on the contract. That number looks like profit on paper.
Margin is different. Margin is what is left once the condenser filter clean, the refrigerant top-up, the drive time between callouts and the compressor part that was not supposed to fail are all counted against what the customer actually paid. A contract can be fully booked and still be losing ground every week, and the owner often cannot see it until the quiet months, when summer peak volume stops hiding the gap.
Why does pricing on the fastest technician's speed lose money on every other job?
A service agreement priced on how fast the owner personally gets through a service call will lose money the moment anyone else on the crew does the work. Most owners who have run their own tools for years can service a ducted system, clear a condenser, and be back in the van faster than a newer technician or a subbie filling in during the summer peak. That speed feels normal to the owner, so it gets built into the price without anyone noticing.
The problem is that an average technician, not the fastest one, is who actually services most of the units on most contracts. If the agreement is priced on the owner's own pace, every job done by someone slightly slower, or every unit that needs a longer refrigerant top-up or a trickier ductwork access point, eats straight into the margin. Multiply that across a maintenance contract covering dozens of commercial or residential units and the loss compounds quietly across the year.
What number actually tells an HVAC technician whether a contract is profitable?
The number that tells the truth is gross profit margin on the agreement, checked against what an average technician actually takes to do the work, not what the fastest one can do or what was assumed at quoting. This is not a figure to glance at once a year during tax time. It is a number to watch every month, because refrigerant costs, supplier pricing on parts, and the mix of jobs on the contract all shift.
Picture an HVAC technician who signs a block of commercial maintenance contracts going into a busy summer. The pricing was based on how quickly the owner personally clears a filter and checks a compressor. Three months in, two technicians are running those jobs, a handful of units need warranty callbacks for installs that were still bedding in, and the margin on the whole block has quietly halved, even though every contracted visit happened on time. The work got done. The business did not get paid properly for it.
How do AI agents help keep a service agreement priced on true margin?
An AI agent is software that does a job the way the owner would do it, using the owner's own prices, wording and rules, and it can be set up to flag a service agreement the moment its margin drifts, rather than waiting for the owner to notice at the end of the season. For an HVAC technician juggling install jobs, breakdown callouts and a book of maintenance contracts, that kind of checking rarely happens by memory, because there is no spare hour in a summer peak to sit down and recalculate every contract by hand.
AI agents can also take on the non-billable side of running agreements: tracking which units are due for a filter clean or refrigerant check, flagging contracts coming up for renewal, and keeping commissioning and warranty records tidy so a callback does not turn into a dispute over who pays. That frees the HVAC technician and the crew to spend time on the actual refrigeration and ductwork, not on spreadsheets. This is data first thinking: the agreement is priced and checked from the business's own numbers, not from a feeling that the season went well.
Should every HVAC technician build service agreements, or does it depend on the business?
Service agreements suit an HVAC technician who wants steadier cash through the winter lull and a reason to call regular customers before a competitor does, but they only work as a strategy once the pricing behind them is honest. Some owners rent an off-the-shelf job management or quoting tool to handle the scheduling side, and for some that is the right call, the owner's own numbers will show whether it is paying for itself or just adding another subscription to track.
What matters more than the software is the pricing underneath it. A maintenance contract is a long-term bet on margin holding steady across every season and every technician who touches the unit. Built on guesswork, it is a bet the business usually loses slowly. Built on true average cost to deliver, it becomes one of the steadier parts of an HVAC business, rather than the part quietly dragging on the rest.
How does Data First Coaching approach this?
Data First Coaching, built by Greg Allan, starts by looking at what a service agreement is actually costing to deliver against what it earns, using the HVAC technician's own job and finance data inside the Trade Business Intelligence, rather than taking the owner's word for how the contracts are performing. That often uncovers that the real issue sits upstream of the agreement itself, in how jobs were quoted or staffed in the first place.
The how, working out what true average cost to serve looks like for this business and building the checks that protect it, is worked through inside the Academy, with other members. The Academy is for owners who are open minded, innovative and willing to share what they find, because the Trade Business Intelligence gets smarter for everyone as every member feeds it.
Looking for a business coach who starts from your numbers? HVAC Business Coach or every answer for HVAC technicians.
