Boiler maintenance plan maths: pricing above your true cost

Why boiler plans lose money without anyone noticing

The short answer: owners price the time on site and forget everything around it. A visit isn't just the 70 minutes in the mechanical room. It's the drive there and back, the parts and consumables, the office time to book and confirm, and the share of visits that need a return trip.

Boiler visits also vary more than furnace tune-ups. A combi, a cast-iron boiler with an old circulator, and a mod-con with an indirect tank take different amounts of time. A single flat price across all of them means some customers are subsidising others.

Step 1: Find your loaded hourly labour cost

Start with what a technician hour really costs you, not just the wage.

Divide by the hours the technician is actually paid: $111,680 ÷ 2,000 = about $56 an hour. If you want a fuller picture, divide by billable hours instead; at 70% billable (1,400 hours), the cost is about $80 per billable hour. For this guide we'll use $62 as a middle figure, so the arithmetic matches our other guides. Use your own.

Step 2: Build the true cost of one visit

Now cost a typical maintenance visit.

Add callbacks

If one in eight maintenance visits leads to a return trip at similar cost, your average cost per visit rises by one-eighth: $147 × 1.125 = about $165.

That callback line is where most plans go wrong. A company with a callback rate of one in five is spending $176 per visit on average, and probably doesn't know it.

Step 3: Set the plan price

Decide what margin you need per member. Suppose you want at least $70 of margin per visit after callbacks.

$165 cost + $70 margin = $235 a year for a one-visit plan.

Now compare that with what you charge today. If your plan is $189, you're earning about $24 per member after callbacks. On 350 members, that's $8,400 a year: barely worth the administration. At $235, the same 350 members contribute $24,500.

Pricing the extras

If an indirect tank adds 20 minutes, that's about $21 of labour plus consumables. Price it as a separate add-on, perhaps $30 to $40, rather than absorbing it.

Combi boilers that need a heat-exchanger flush, or older systems needing more attention, can sit in a higher plan tier. Two or three clearly named tiers usually work better than one flat price.

Step 4: Decide what the plan includes

What a member gets should match what your techs actually do and what your capacity can honour. Common inclusions in boiler plans:

• one scheduled maintenance visit a year, booked in spring or summer
• a written visit report the customer can keep
• priority booking for repairs, if your bench can deliver it in January
• a modest repair discount, priced into the plan
• reminders for any program or warranty paperwork deadlines

Be careful with promises. "Priority response" is worthless if your rota can't honour it during the coldest week; see the winter capacity guide.

Step 5: Set a renewal target

A plan's value grows every year a member stays. Track renewal rate at 12 months.

Suppose you start the year with 350 members, add 120 new ones, and renew 80% of those due. By year end you'd have 350 × 0.8 + 120 = 400 members. At 70% renewal, you'd have 365; at 90%, 435. The difference between 70% and 90% renewal is 70 members, or about $4,900 in margin at $70 each, before any replacement work they bring.

What lifts renewals:

1. A reminder before the plan lapses, by text and email, with the customer's consent.
2. A follow-up call for anyone who hasn't renewed.
3. A visit report that shows what was done.
4. Technicians who explain what they found and why it matters.

Renewal reminders are commercial electronic messages under Canada's anti-spam law, so keep records of consent and include identification and an unsubscribe option. Check CRTC guidance or a lawyer for specifics; we don't give legal advice.

Step 6: Work out how many members you can serve

Capacity sets the ceiling. If your techs have about 600 spare hours between April and September, and each visit takes 1.8 hours including travel, you can complete about 330 planned visits in that window. Adding callbacks at one in eight, it's closer to 295.

If you already have 400 members, about 100 visits will spill into the fall, exactly when emergencies and installs peak. That's the moment to either hire, add an apprentice to handle simpler visits, or slow plan sales until capacity catches up. The technician depth service covers that decision.

Common mistakes

• Pricing from memory. Rebuild the cost every year.
• One price for every system. Combis, cast-iron systems and multi-appliance homes take different time.
• Ignoring travel. In large cities and rural areas alike, travel can be a third of the visit.
• Letting renewals happen by chance. Without reminders and follow-up, renewal rates drift down.
• Selling plans in October. By then your techs are needed for no-heat calls. Sell in winter and spring; schedule for summer.

Checklist

• ☐ Calculated loaded hourly labour cost
• ☐ Costed a typical visit, including travel and consumables
• ☐ Measured your callback rate
• ☐ Set a plan price above true cost, with tiers or add-ons
• ☐ Listed inclusions you can honour in the coldest week
• ☐ Set up reminders and consent records
• ☐ Checked member capacity against spring and summer hours

If you'd like to rebuild your plan with your own figures, our maintenance revenue engagement does exactly that. The pricing page explains how engagements are quoted, and you can reach Ali through the contact page.