Many home service contractors, whether they specialize in water and sewer lines, indoor plumbing, heating & cooling, electrical systems, or appliances, struggle with keeping a steady stream of work all year round. And paying for leads, or on-going marketing campaigns that bring in little or no business, can be a drain on their cash flow, especially in slower periods.
Without a steady stream of work, contractors risk losing their best technicians, which can lead to a downward spiral that is hard to reverse. If you can’t service your customers in a timely fashion, they will go elsewhere for that service.
How can providers actually expand their business, and gain customers and profits, at no cost? Below we discuss three ways that successful contractors have grown their business:
1. Retain and grow the customers you already have
You’ve probably heard the old adage: It is cheaper to keep a customer than to convert a new one. According to a comprehensive study by ivesp, here are some statistics that back that up:
- It costs five times as much to attract a new customer than to keep an existing one
- The probability of selling to an existing customer is 60 – 70%, while the probability of selling to a new prospect is 5-20%
- Existing customers are 50% more likely to try new products and spend 31% more, when compared to new customers.
How does this translate to home services? According to Invoca, it can cost $275 for an HVAC lead, one that may not even convert into an actual job! Leveraging your existing customers is absolutely critical for growing your revenue and reducing costs.
What is key to driving customer retention? It is the trust your existing customers have in you, which is something that you can greatly influence. Research from salesforce.com found that 80% of customers say the experiences provided by a company are as important to them as its products and services.
You, your office team, and field technicians are the best ambassadors and all influencers to ensure the customer has a great experience with your company. Once a customer trusts you to perform and they have a great experience from the initial contact with your company to the end of the project, they are likely to turn to you again the next time they need your services.
2. Turn your customers into fans and a source of referrals
How many times have you seen posts on Facebook, Next Door, or other social media sites that start with the phrase “I’m looking for recommendations on contractors that provide <SERVICE>” People trust recommendations from their friends and neighbors. In fact, the Nielsen Trust in Advertising Study found that recommendations from people they know is the most trusted advertising source for 89% of U.S. consumers.
In the age of social media, cultivating and leveraging your current customers to recommend your business is a cost-efficient way to expand your customer base.
Here are some tips for motivating your customers and making it easy for them to recommend and refer you:
- Keep your social media pages and website up to date so new visitors know what you do and can easily get in touch with you
- Ask for a testimonial right away when you have a satisfied customer and post them on social media to drive traffic to your website
- Consider offering a discount on a future service as a thank you for a referral
- Stay top of mind with your customers with an email newsletter or social media posts that offers useful tips for maintaining equipment and services
3. Join a provider network from a market leader with an existing customer base
Even if you leverage every customer you have, you know that there are thousands more in your service area that you are not reaching. When systems in their homes either break down or need the required maintenance to keep them running smoothly, who will the customer call?
One of the most cost-effective ways to generate business without having to buy cold leads or execute costly marketing or advertising programs is to join a home warranty company network of providers. Millions of consumers purchase home warranty plans to give them the peace of mind that comes with having protection in the event of a breakdown of major systems in their home or regular maintenance to keep them running. Some companies also sell and finance home equipment and need reliable contractors to install these systems.
“In the past year, my company has grown and expanded into excavation. My contract has given me the financial resources to purchase machinery, hire new employees and venture into different markets.”Ryan Hughes, Managing Member
City Plumbing, Philadelphia, PA
Discover how you can grow your business by joining the largest home care organization with nearly 2 million customers and growing.
Through their network of service providers, home warranty companies can offer quick and reliable service, as well as eliminate the hassle for homeowners of trying to find their own contractor. But not all home warranty companies are the same. Here are some things to consider in evaluating whether joining a network is right for you and which one you should join:
Will you receive actual jobs?
Some companies provide leads, not actual jobs. And some even charge you for the leads. You will want to find a partner that gives you real jobs for services that are covered under their plans.
What is their reputation with customers?
You can, and will, be judged by the company you keep. Be sure to check the company’s reputation online with customers and rating with the better business bureau.
How do they set expectations with customers?
Do they have experienced customer service representatives and effective claims procedures that ensure you get all the information that is needed before you go out on a job? Is the customer clear on what is covered and what is not under the warranty program?
How and when will you get paid?
Nothing is more frustrating than performing work and not getting paid for it. Check the payment terms offered by the company, as well as ensure that you will be paid for diagnostic trips that may not lead to an actual repair as well as repair and maintenance services. Does the company pay quickly (30 days or less) or take months to pay once a job is completed?
Do they have partnerships that can grow their customer base?
Does the company have strong relationships with partners, including major cities, smaller municipalities, utilities, and other organizations? This can expand the customer base they serve, and in turn, can provide a steady stream of new customers for you.
Does the company offer tools and support to help their providers?
Make sure the company has the infrastructure in place to successfully support their providers. Do they offer tools to schedule jobs with customers? Is their dispatching tool mobile friendly? Do they have a team to answer your questions on claims? This infrastructure is critical to your success in serving their customers.
Is their management and field team experienced?
While you are used to explaining to customers in layman’s terms what is involved in a repair to their septic system, outside water line, or other home service, it can be frustrating for you to have to explain the repairs required to representatives of the home warranty company. Be sure to ask about the type of real-world field experience the team has so jobs are scheduled correctly, and you get paid for the work needed.
There are certainly other ways to grow your business, but they can cost more in the long run and put a drain on your cash flow. These top 3 methods can increase your customer base and generate more revenues at NO COST:
- Retain and grow the customers you already have
- Turn your customers into fans and a source of referrals
- Partner with a market leader with an existing customer base
Remember, it costs 5 times more to get a new customer than to keep an existing one. Leverage your customers to get repeat business and referrals, and partner with a company that can provide real jobs so you can continue to expand your customer base and grow your business.