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The key considerations when starting a service agreement pricing program are deciding between breakeven pricing or pricing for profit. Breakeven pricing involves covering the cost of goods sold and maintenance division overhead, while pricing for profit aims to generate acceptable gross profit percentage. It's important to calculate cost structures and determine the breakeven point, such as $50 per maintenance call in this case. Understanding the philosophy behind the pricing strategy helps in making a decision between generating more agreements with breakeven pricing or achieving higher profits with margin pricing.
