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HVAC Agreement Renewal Rate Calculator

See what improving your maintenance agreement renewal rate is worth in annual recurring revenue, and what each lapsed agreement costs beyond the plan price itself.

Your numbers

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Result

Additional annual recurring revenue $15,520
Agreements retained 32
Additional gross profit $6,984
Value lapsing at the current rate $32,764
At a 62% renewal rate you lose about 68 agreements a year, worth $32,764 once the $479 each member is worth in plan and repair revenue is counted. Lifting the rate to 80% retains 32 of them, $15,520 of recurring revenue and $6,984 of gross profit. It also avoids roughly $10,044 of acquisition cost replacing them.

Retention improvements are not free and this does not model what they cost. Earlier reminders, a person making the call, and actually delivering every included visit all take time. The point of the calculation is to size the prize so you can judge what that effort is worth. It also assumes a retained member behaves like an average one, which understates the value of long-standing customers and overstates the value of new ones.

Open the agreements demo

Questions

About this calculator

How should I calculate my current renewal rate?

Renewed divided by everything that reached a decision, renewed, declined and lapsed. Excluding the ones you never managed to contact produces a flattering number rather than a useful one, because those are exactly the agreements a process would have saved.

Why include repair revenue?

Because a member is worth more than their plan price. They call you first, they take your recommendations more often, and they are the customers most likely to buy a replacement from you. Losing the agreement usually means losing all of that.

What actually improves renewal rates?

Delivering the visits people paid for is the one that does most of the work. After that: contacting them well before expiry, sending a report they can remember, and giving one named person responsibility for the list.

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Work a renewal list, not a reminder

The demo shows agreements at 30, 60 and 90 days out with the visits-used column beside each one: the number that predicts whether they renew.