Making More Per Customer in Your Trade Business

The easiest revenue you’ll ever make is from customers you already have. Making more per customer is the fastest path to profit growth.

Here’s the math that most contractors ignore: It costs 5-25x more to acquire a new customer than to keep an existing one. A 5% increase in customer retention can increase profits by 25-95%.

Let that sink in. You could nearly double your profits not by getting more customers, but by keeping more of the ones you have — and getting more value from each relationship.

This chapter is about the second half of the revenue equation. Chapter 4 was about getting customers. This chapter is about making more from each one.

We’ll cover pricing power, service agreements, the Good-Better-Best framework, and how to think about lifetime value. These aren’t sales tricks — they’re structural changes to how you operate that compound over time.

Pricing Power

Let me show you some math that will change how you think about pricing.

Say your average job is $200, and your cost to deliver it is $180. That’s a $20 profit margin — 10%.

Now imagine you raise prices by 10%, to $220. Your cost stays the same at $180.

What happens?

Your profit per job goes from $20 to $40. You just doubled your profit margin with a 10% price increase.

“But wait,” you say, “I’ll lose customers if I raise prices.”

Okay, let’s account for that. Say you lose 10% of your volume because of the price increase.

Even with a 10% volume loss, your gross profit went up by 80%.

This is the math that PE firms obsess over. Small price increases — done thoughtfully — create massive profit gains because incremental revenue flows directly to the bottom line.

The Breakeven Formula

Here’s a useful formula:

Maximum volume loss you can sustain = Price increase ÷ (Price increase + Gross margin)

With a 10% margin and a 10% price increase:

10% ÷ (10% + 10%) = 50%

You could lose up to half your customers and still break even on profit. Anything less than 50% volume loss, and you’re better off.

In practice, most small price increases cause far less than 50% volume loss. Usually it’s single digits, if anything.

Plus, as a benefit, most of the time, customers that pay more are better customers. They refer other better customers, and overall raise the value of your brand.

When to Raise Prices

Most contractors are underpriced. They haven’t raised prices in years. They’re scared of losing customers.

Here’s when you should raise prices:

1. You’re turning away work — If you have more demand than capacity, raise prices
2. Your costs have increased — Materials and labor go up every year; your prices should too
3. You haven’t raised prices in 12+ months — Annual increases are normal and expected
4. Your competitors charge more — Check what others are charging; you might be underselling yourself

The key is to do it thoughtfully and communicate value. Customers accept price increases when they understand why and when they feel they’re getting value.

The Good-Better-Best Framework

Stop presenting single options.

When a technician walks into a home, diagnoses the problem, and gives one price, the customer has two choices: yes or no.

If the answer is no, you lose the job.

Now imagine instead the technician presents three options:

Good (Basic): Core repair, standard parts, standard warranty — $149

Better (Standard): All of the above + upgraded parts, thorough inspection, 1-year warranty — $229

Best (Premium): All of the above + premium parts, priority scheduling for future calls, 2-year warranty — $349

What happens?

The customer now has choices. The “no” becomes rare because there’s usually an option that fits their budget. The $349 option makes $229 look reasonable. Many customers — often 50-60% — choose the middle option when presented this way.

Your average ticket shifts from $149 (single option) to roughly $230 (with Good-Better-Best).

How to Structure Your Tiers

Good (Basic):

• Core service only
• Standard materials
• Minimum warranty
• Standard scheduling

Better (Standard):

• Everything in Good
• Upgraded materials
• Extended warranty
• Priority scheduling
• Mark as “Most Popular” or “Best Value”

Best (Premium):

• Everything in Better
• Premium materials
• Longest warranty
• VIP scheduling
• Extra services (inspection, cleaning, etc.)

The Psychology

Good-Better-Best works because of several psychological principles:

Anchoring: The high “Best” price makes the “Better” price seem more reasonable.

Choice architecture: Giving options makes customers feel in control. They’re choosing between options, not deciding yes/no.

The compromise effect: When faced with three options, people tend to avoid extremes and pick the middle.

Loss aversion: Customers see what they’d miss by choosing “Good” — which often pushes them to “Better.”

Implementation Tips

1. Train your technicians to present all three options confidently
2. Use visual aids — a comparison sheet or tablet presentation
3. Lead with “Better” — present it as the recommended option
4. Don’t push — let customers self-select; pressuring backfires
5. Track results — measure which tier customers choose

Service Agreements: The Holy Grail

Service agreements are the closest thing to recurring revenue in home services.

A customer who signs a service agreement is worth 4-10x more than a one-time caller. Here’s why:

1. Predictable revenue — You know they’re coming back
2. Lower CAC — No acquisition cost on repeat visits
3. Higher LTV — Longer relationship, more opportunities
4. Priority scheduling — They get priority, they feel special
5. Replacement opportunities — You’re there when equipment fails

The Benchmarks

Why Agreements Transform Your Business

Let’s say you have 500 customers on $200/year service agreements. That’s $100,000 in predictable annual revenue — before any repair work.

But it gets better:

• Those 500 customers will call you first when something breaks
• They’ll buy replacements from you
• They’ll refer friends and family
• You can schedule maintenance visits during slow seasons

PE firms love service agreements because they’re recurring revenue. They smooth out seasonality, reduce dependence on new customer acquisition, and increase the value of the business.

How to Sell More Agreements

1. Offer at every service call — Every technician should present it
2. Price it right — $150-$400/year is the sweet spot for residential
3. Bundle value — Priority scheduling, discounts on repairs, annual tune-ups
4. Explain the savings — Show what they’d pay without the agreement
5. Auto-renew — Make renewal the default (with annual prepay discount)

The Retention Challenge

The biggest risk with service agreements is churn. If you sign customers but they don’t renew, you’re just doing discounted one-time visits.

Keys to retention:

• Deliver real value — The tune-up visit should feel valuable
• Communicate regularly — Remind them of their benefits
• Make renewal easy — Auto-renew, credit card on file
• Follow up on non-renewals — Call customers who don’t renew

Building and managing a service agreement program is one of the core things we do at Office OS. We handle the enrollment, the renewals, the scheduling of maintenance visits, and the follow-up — so you get the recurring revenue without the administrative burden.

The Upsell Problem

Let me address the elephant in the room: upselling.

Most contractors hate the idea of upselling. It feels pushy. It feels like you’re taking advantage of customers. Technicians are uncomfortable doing it.

Here’s the reframe: Upselling isn’t about selling. It’s about serving.

The Exploration Technique

Instead of trying to sell more, try diagnosing more.

When a technician goes to a service call, they should identify every issue with the system — not just the one the customer called about.

Then they present all the findings:

“Here’s what I found. Your blower motor is what caused the problem today — that’s $350 to fix. I also noticed your capacitor is weak and will likely fail within 6 months — that’s $175 if we do it today while I’m here, or $250 as a separate visit later. And your filter hasn’t been changed in a while — I can replace it for $30, or you can pick one up at the hardware store.”

The customer now has complete information. They decide what to address now and what to defer.

This isn’t pushy. This is thorough. This is what a good technician should do.

Why Exploration Works

1. Positions technician as advisor — They’re sharing knowledge, not selling
2. Builds trust — Customer feels informed, not manipulated
3. Reveals hidden issues — Customer often didn’t know about other problems
4. Creates future work pipeline — Track deferred items, follow up later
5. Increases average ticket — More items addressed per visit

Training Your Technicians

The key is training. Technicians need to:

• Perform thorough diagnostics (not just the immediate problem)
• Communicate findings clearly and without pressure
• Present options (Good-Better-Best for each issue)
• Let the customer decide
• Document what was deferred for follow-up

This is a mindset shift. They’re not salespeople — they’re advisors giving complete information.

Lifetime Value

Lifetime Value (LTV) is the total revenue you’ll generate from a customer over your entire relationship.

The Formula

LTV = Average Job Value × Purchase Frequency × Customer Lifespan

Example:

• Average job: $300
• Frequency: 2x per year (service call + tune-up)
• Lifespan: 5 years

LTV = $300 × 2 × 5 = $3,000

Now compare that to your Customer Acquisition Cost (Chapter 4). If your CAC is $200 and your LTV is $3,000, you have a 15:1 ratio. That’s excellent.

LTV by Customer Type

Notice the massive difference between a one-time customer and a service agreement customer. This is why agreements matter so much.

Maximizing LTV

There are three levers:

1. Increase average job value

• Good-Better-Best pricing
• Comprehensive diagnosis
• Premium options

2. Increase purchase frequency

• Service agreements (scheduled visits)
• Maintenance reminders
• Seasonal promotions

3. Extend customer lifespan

• Excellent service (they won’t leave)
• Relationship building
• Retention programs

The Retention Math

Let me bring this full circle.

Statistic: A 5% increase in customer retention leads to a 25-95% increase in profits.

Why such a huge range? Because retained customers:

• Cost nothing to acquire (CAC = $0)
• Buy more over time (trust increases)
• Refer others (free acquisition)
• Accept price increases (they trust you)
• Provide predictable revenue (you can plan)

Most contractors focus obsessively on new customer acquisition. They spend thousands on ads, lead gen, marketing.

The smartest contractors focus equally — or more — on retention. They invest in:

• Service agreements
• Follow-up systems
• Customer communication
• Quality of service
• Relationship building

It’s less glamorous than “getting more leads.” But the math is undeniable.

Putting It Together

Here’s how all of this connects:

1. Raise prices thoughtfully — Small increases, big profit impact
2. Present options (Good-Better-Best) — Increases average ticket by 30-50%
3. Sell service agreements — Transforms one-time customers into recurring revenue
4. Diagnose thoroughly — Find all issues, present all options
5. Focus on retention — 5% improvement = 25-95% profit increase
6. Calculate and track LTV — Know what each customer is worth

This is how PE-backed companies approach revenue expansion. They don’t just get more customers — they make more from each customer.

If you want help implementing service agreements and pricing strategy, this is a core part of what we do at Office OS. We help our clients build the systems, train the team, and manage the ongoing operations that make this work — so you get the revenue benefits without having to figure it all out yourself.