Every plumbing shop knows the pattern. In January the phone won't stop, because pipes froze and water heaters quit. Then a quiet spring week shows up, four techs are on the clock, and the board is half empty. A plumbing service agreement is the most reliable fix for that swing. You sell a yearly maintenance visit plus a few member perks, you schedule those visits into your slow weeks, and you keep the customer calling you, not the next ad they see, when something breaks.
Most shops that try it get the pitch right and the numbers wrong. They pick a price because a competitor charges it. They give away a repair discount without knowing what it costs. They never find out whether members renew. This guide covers the numbers first, then what goes in the visit, what goes in the paper, and how to keep members in year two.
What a plumbing service agreement is (and what it isn't)
A plumbing service agreement is a recurring plan. The homeowner pays an annual or monthly fee. In return they get one or two scheduled maintenance visits a year plus member perks, usually priority booking when they call, a discount on repairs, and a waived trip charge.
It isn't a one-time job contract. Search results mix the two up, and so do customers. It also isn't insurance or a home warranty. That second point matters more than any other line in the agreement. If a member thinks the plan pays for their next water heater, you'll have an angry customer the day it fails. Put "this plan does not pay for repairs or replacement" in plain words on the front page. Have your plumber say it out loud at signup too.
Why homeowners will pay for it
You don't have to invent the value. The public numbers make the case for you.
- Water damage is expensive and common. The Insurance Information Institute puts the average water damage and freezing claim at $15,400 over 2019–2023. It also estimates that about one in 60 insured homes has a property damage claim caused by water damage or freezing.
- Small leaks run for a long time. EPA WaterSense estimates the average household's leaks waste more than 9,300 gallons a year, and 9% of homes have leaks wasting 50 gallons or more per day.
- Water heaters need attention twice a year. AHRI's homeowner guidance says to check the pressure relief valve and flush the tank every six months, especially with hard water, because sediment cuts efficiency and can clog lines. Almost no homeowner does it.
Don't overclaim these numbers in your own marketing. One annual visit doesn't guarantee a claim never happens. The honest pitch is this: most expensive plumbing failures give warning signs first, and someone who knows what to look for checks yours on a schedule.
What goes in the visit
Keep the checklist tight enough to finish in about an hour on site. A visit that runs long every time either kills your margin or gets rushed, and a rushed visit is how members stop renewing. A solid residential checklist:
- Water heater. Test the temperature and pressure relief valve. Flush sediment. Check the burner or elements, and the venting on gas units. Note the age and condition.
- Toilets. Dye-test for silent leaks. Check flappers, fill valves, and the seal at the floor.
- Supply lines and shutoffs. Look at braided lines under sinks and at the washer. Exercise the fixture shutoffs and the main.
- Faucets and fixtures. Check for drips. Clean the aerators.
- Drains. Run every drain and watch for slow flow. Note any fixture that needs cleaning.
- Water pressure. Measure static pressure. Check the pressure-reducing valve if the home has one.
- Sump pump and ejector. Run a test cycle and check the check valve.
- Exterior. Check the hose bibbs, and do freeze prep on the fall visit in cold climates.
- Write-up. Leave a short report with photos and a clear repair list, sorted into "now," "soon," and "watch."
Item nine sells more work than items one through eight. The photo report is what the member sees, and it's what reminds them why they're paying. It's also your repair pipeline.
The margin math
Here's a worked example. These numbers are illustrative. Plug in your own labor rate, visit time and prices.
Step 1: what one visit costs you
Start with labor. The BLS lists the median plumber wage at $30.67 an hour (May 2025). Wages alone understate your cost. Across private industry, the BLS finds that wages are 70.0% of total compensation cost and benefits the other 30.0%. That's an all-industry figure, not a plumbing one, so treat it as a rough loading factor: divide the median wage by 0.70 and you get about $43.81 an hour. Your shop's real loaded rate may be higher or lower, so use it.
Now the visit itself. Figure an hour on site plus 30 minutes of drive time, and add $15 for fuel and the truck plus $15 for consumables like a flapper, washers or an aerator.
- Labor: 1.5 hours × $30.67 ÷ 0.70 = $65.72
- Truck and consumables: $30.00
- Direct cost per visit: $95.72
Step 2: price the tiers
| Illustrative figures | One-visit plan | Two-visit plan |
|---|---|---|
| Annual price | $189.00 ($15.75 a month) | $329.00 |
| Direct visit cost | $95.72 | $191.44 |
| Gross margin on visits | $93.28 (49%) | $137.56 (42%) |
Notice that the two-visit plan earns more dollars but a lower margin percentage. More visits isn't automatically better. The second visit pays off when it matches what the equipment needs, such as the six-month water heater flush, and when it finds repair work.
Step 3: price the repair discount honestly
Say you give members 15% off repairs, and an average member buys $600 a year of repair work at list price. The discount costs you $90, so the member pays $510. If your repair work runs at a 50% gross margin at list price, the work costs you $300, and that member still leaves you $210 after the discount.
The real question isn't whether you can afford the discount. It's whether that $600 would have come to you without the agreement. For a homeowner with no plumber they trust, it often wouldn't. That captured repair work is where most of the program's profit sits, not the visit fee.
Step 4: watch what renewal rate does
The convention here, and in our guide to raising your service agreement renewal rate, is simple: every member active in a year pays that year's fee, and each renewal decision happens on the anniversary. Take 100 members at $189 and assume you sell no new plans for three years.
- At 60% renewal: 100, then 60, then 36 paying members. That's 196 member-years × $189 = $37,044 in plan revenue.
- At 80% renewal: 100, then 80, then 64. That's 244 member-years × $189 = $46,116.
Twenty points of renewal is worth $9,072, about 24% more plan revenue from the same first-year sales effort, before you count a single repair. Renewal is the number to manage. Price matters less.
Step 5: check capacity
A hundred one-visit members is 150 tech hours a year, a little under four 40-hour weeks of one plumber's time. If those hours land in your slow weeks, the real cost is lower than the math above, because you're paying those techs anyway. If they land in January, you're pulling techs off emergency calls that pay more. When the visits happen matters as much as what they cost.
What goes in the agreement
Use this outline as your plumbing service agreement template. Have your attorney review it for your state before you use it. Rules on renewal notices and cancellation vary by state.
- Parties and property. Customer's name, service address and your license number.
- Term. Twelve months from the signup date, with the start and end dates written out.
- Included services. Visit checklist, number of visits, and which equipment is covered (for example, one water heater and up to three bathrooms).
- Member benefits. Priority booking, the repair discount percentage, and the waived trip charge. Say whether benefits cover after-hours emergency work.
- What's not included. Repairs, parts, replacement equipment, sewer line work, and damage from pre-existing conditions. Put this in plain language near the top.
- Price and billing. The annual or monthly amount, when each invoice goes out, and how the member can pay.
- Renewal. How far ahead you'll send the renewal notice, what the member does to renew, and how they cancel instead.
- Cancellation and refunds. How a partial year is handled.
- Access and scheduling. How visits get booked, and what happens if the customer misses one.
- Transfer. Whether the plan transfers to a new owner if the home is sold.
- Signatures and date.
Selling it, and keeping members in year two
Sell it without a hard sell
The best time to offer a plan is at the end of a repair call. The customer has seen what a problem costs, and your plumber has credibility. That only works if your plumbers believe in the plan. Plumbing & Mechanical's Matt Michel put it bluntly: if your plumbers don't believe in the service agreement, they won't sell it. Let them help build the checklist and set the member benefits.
A simple script works. Show the invoice, then show what that same repair would have cost with the member discount and no trip charge. Explain what the yearly visit covers. Then stop talking.
Keep them past the first renewal
Renewal is decided on the first visit, not the day the renewal notice goes out.
- Show up in the booked window. A missed or late member visit feels worse than a missed one-off call, because they're paying for priority.
- Send the photo report the same day. Members forget they have a plan. The report reminds them.
- Keep the history on the equipment. When a different plumber shows up next year and already knows the water heater's age and last flush date, it feels like a real service.
- Send the renewal notice 30 days out, with a one-line summary of what you did this year, the price for the next term, and a clear way to renew or cancel.
- Offer monthly billing. $15.75 a month is an easier yes than $189 at once, and each monthly invoice is a small reminder that the plan exists.
Mistakes that sink agreement programs
- Pricing to match a competitor without knowing your own cost per visit.
- No written exclusions, so members think the plan pays for repairs.
- Booking every visit in one season, which piles 150 hours onto your busiest month.
- Tracking it on a spreadsheet. Visits get missed, renewals lapse silently, and nobody notices until the member is gone.
- Rushing the visit because the checklist is too long to finish in the time you priced.
- Never measuring the renewal rate. It's the number that decides whether the program works.
Where FSM Navigator fits
The spreadsheet is usually where agreement programs break. The math works on paper, and then visits go unscheduled and renewals slip.
On the Pro and Enterprise plans, Service Agreements holds each plan as one record: the customer, property or (on Enterprise) the specific water heater it covers, start and end dates, and a monthly or annual fee that is invoiced on that schedule. You tick which kinds of lines the agreement covers, such as travel for a waived trip charge. When you invoice a job under it, covered lines come up at $0 while still showing the real hours and parts. The member repair discount is a percentage you set on the agreement plan. Set 15% once, and it's copied onto each agreement when you sell it, so changing the plan later doesn't reprice members who already bought. It comes off labor and parts on the member's quotes and invoices without anyone remembering to apply it, and if the office also gives a discount on the same line, the larger one wins; they never stack. Members can put the fee on autopay with a saved card. Before an agreement ends, owners and asset managers get a renewal reminder (30 days ahead by default, adjustable per agreement) and the customer gets a renewal email. Renewing is one click, and it's always a deliberate step, never something that happens on its own. The renewal keeps the covered water heaters and the visit schedule attached, so nothing gets re-entered.
The agreement schedules its own visits. Give it the service location and how often the member gets a visit, and it puts those visits on the calendar for the whole term, never more than the agreement includes, and stops when the agreement ends. With asset management, each water heater can carry its own maintenance schedule and service history, with a heads-up before maintenance comes due, so the next plumber walks in knowing what the last one found. The plumbing page shows how this fits with emergency calls and the rest of the day.