Does your boiler service agreement pay for itself?

Step 1: Cost the included visit

Start with the work the plan promises. For a typical annual boiler service, list:

• technician time on site, at your loaded hourly cost
• travel time to and from the home
• consumables and standard parts used on every visit, such as gaskets or a filter
• office time to schedule and confirm the visit

An illustrative cost build:

If your plan includes more than one visit, a priority call-out or free labour on repairs, cost those too. Generous inclusions are where agreements quietly lose money.

Step 2: Compare the fee

Now set the fee against the cost. At an illustrative $240 a year:

• Fee: $240.00
• Visit cost: $167.50
• Annual contribution before repairs: $72.50

If your fee were $180, contribution would be $12.50, close to nothing. If it were $299, it would be $131.50. Most owners have not run this sum since they first set the price, and labour costs have moved since.

Step 3: Add the repair discount

If members get a discount on repairs, it reduces contribution on that work. Suppose members book an average of 0.4 repairs a year at an average invoice of $650, and get 10% off:

• Repair revenue per member per year: 0.4 × $650 = $260
• Discount given: 10% of $260 = $26 per member per year

That $26 is a real cost of the agreement and belongs in the sum. Whether it is worth it depends on whether members would otherwise call a competitor.

Step 4: Work out member lifetime

A member who renews every year is worth far more than one who lasts a single season. If a share of members renews each year, the average member stays roughly 1 ÷ (1 − renewal rate) years.

This is a simplification, and real member behaviour is lumpier, but it is good enough for marketing planning.

Step 5: Lifetime contribution per member

Combine the pieces. With a 75% renewal rate and the figures above:

• Plan contribution: $72.50 × 4 years = $290
• Repair contribution, if member repairs leave about 44% before the discount: $260 × 44% = $114.40 a year, minus the $26 discount = $88.40 a year, × 4 years = about $354
• Lifetime contribution per member: about $644

This excludes the eventual replacement, which is often the largest prize. Leave it out of the ceiling but keep it in mind, because it is why agreement bases matter for a boiler company's future value.

Step 6: Set the ceiling for signing a member

Choose the share of lifetime contribution you will invest to sign a new member. At 25%, the ceiling is about $161 per signed agreement. That changes how you should think about agreement marketing:

• Selling an agreement at install costs almost nothing extra, so attach rate is the cheapest lever by far.
• A standalone campaign for new members, aimed at homeowners whose boiler someone else installed, must win each sign-up for under about $161 to pay.
• Renewal reminders cost a few dollars per member and protect the four-year life the whole calculation depends on.

What raises agreement value most

Using the illustrative figures, here is how each lever changes lifetime contribution per member:

Renewal rate is the strongest lever, which is why renewal sequences and a clear renewal offer matter so much. Those are commercial messages, so Canada's Anti-Spam Legislation applies: the CRTC's guidance covers consent, sender identification and unsubscribing. Capture consent at sign-up.

Attach rate: the cheapest lever of all

Attach rate is the share of new installs that leave with a signed agreement. It deserves its own line in your monthly numbers, because the cost of selling a plan at install is close to zero: the customer is already in front of your technician and has just made a large purchase.

Using the illustrative figures, a company installing 120 boilers a year at a 40% attach rate signs 48 members from installs. Lift attach rate to 65% and it signs 78, thirty more members, each worth about $644 over their life, without a single extra advertising dollar. That is roughly $19,300 of lifetime contribution from a change in how the plan is offered.

What moves attach rate is rarely price. It is usually whether the plan appears in the written quote, whether the estimator explains it the same way every time, and whether the first service date is booked before the installer leaves.

Common mistakes

1. Setting the fee by looking at competitors. Their labour costs are not yours. Start from your own visit cost.
2. Bundling unlimited labour. One hard winter can wipe out a year of plan contribution.
3. No renewal process. If renewals depend on customers remembering, lifetime value collapses.
4. Counting members, not value. A growing list of plans priced below cost is a growing liability.
5. Mixing furnace and boiler plans. Visit times differ, so blended pricing hides which plan earns.

Next steps

Our service agreement programs apply this worksheet to your plan and build the marketing around it. For the install side of the same calculation, see the allowable cost per install guide, and for the tracking that keeps these numbers current, see unit-economics tracking. If you want to work through your own plan, the contact page explains what to send. These figures are illustrative and are not accounting or legal advice.