ServiceTitan

Report finds resilient businesses are adopting technology, outsourcing, and focusing on customer relationships

• 29% of contractors plan to invest in technology this year to increase revenue, customer retention, and customer acquisition.
• 27% of contractors have outsourced services as a solution to streamline their processes, scale, and grow revenue
• Repeat customers accounted for 39% of revenue and 71% of business volume for contractors this year

ServiceTitan, a software platform built to power the trades, has released its first Residential Services Report, providing insight into the challenges and opportunities facing the industry, market outlook, business strategies, and emerging trends. These results highlight survey responses from more than 1,000 residential service contractors around the U.S.

“Residential contractors provide essential services that keep our world running, and that’s not going to change anytime soon”, said Vahe Kuzoyan, president and co-founder at ServiceTitan. “These contractors remain resilient and innovative amidst a year of diverse outcomes, using new strategies and purpose-built technology to allow them to focus on operational excellence and building lasting relationships with customers.”

Tempered sentiments reflect market uncertainty 

Economic uncertainty, labor shortages, and reduced access to working capital have created a strain on businesses across the US, and in response, residential contractors have a mixed outlook for the current year. According to the survey, over half (67%) of contractors have neutral expectations for the future, 18% are optimistic, and 14% feel pessimistic.

Strategies to combat supply chain disruption

The tailwind effects of COVID-19, increased natural disasters across the nation, and global warehouse capacity issues are resulting in extended supply chain disruption. Contractors reported difficulty obtaining supplier parts (64%), raw materials (47%), specialty materials (44%), equipment (23%), vehicles (17%), and sustainable “green” materials (14%). Supplier diversification can increase supply chain resilience. 60% of contractors purchase directly from a supply house, 23% directly from the manufacturer, and 17% directly from the vendor.

Outsourcing is one effective strategy for contractors looking to increase stability and growth. Approximately one-third of businesses (27%) have leveraged outsourcing as a solution to streamline their processes. The three most common areas for outsourcing included call centers (76%), customer service (49%), and digital advertising/SEO (32%). Outsourcing allows businesses to centralize their operations and create a more consistent, reliable customer experience while scaling.

Developing trusted, deep customer relationships 

Customer relationships, both existing and new, play a major role in business success. Repeat customers accounted for 39% of contractors’ annual revenue, and satisfied customers are also more likely to offer referrals or recommendations, which can help generate new leads. Respondents reported 71% of business volume in the last year came from word-of-mouth referrals. Growing revenue (56%) as well as customer retention (50%) and customer acquisition (46%) were all top priorities for residential contractors in 2023.

Attracting and retaining high-performing technicians and employees is also top-of-mind, as competition for talent remains fierce amidst a skilled labor shortage. In response, businesses are being very intentional with recruitment and retention practices. Over one-third of contractors surveyed  (38%) will increase technician salaries between 4% or more as a strategy to attract and keep top talent, while 39% of respondents stated that they plan to increase technician pay by 1-3%.

Continued investment in technology presents new benefits across the business 

Through emerging technologies like automation and AI, contractors can offload much of their administrative work and focus their time on boosting productivity, optimizing resources, and doing what they do best: serving customers and building lasting relationships in their communities. Survey results indicate that contractors are leveraging technology primarily for business management (63%), field service management (48%), accounting (42%), enterprise resource planning (38%), payroll (33%), and human resources (33%).

“AI is changing the way we work in the trades,” said Jason Brady, Owner and CEO at Above & Beyond Heating & Cooling. “We’re going to be able to stop focusing on the insignificant things, and really focus on the things that matter to the business. New technology isn’t always perfect, but it’s helping contractors tackle some of the menial tasks of the job so they can focus more on servicing customers.”

Technology is not only freeing up resources, but also improving worker satisfaction, enhancing safety, and creating more attractive career paths and opportunities for professional development. With technology as a key tool to achieve business goals, 29% of residential contracting businesses plan to invest in technology this year to increase revenue (56%), customer retention (50%), and new customer acquisition (46%).

To view the full findings and key takeaways, download ServiceTitan’s Residential Service Report here.

About the research

The survey was conducted on behalf of ServiceTitan by Thrive Analytics, an independent third-party research provider and a leading digital marketing research firm, polling more than 1,000 residential service contractors representing a variety of geographical regions, business growth stages, and revenue levels. For the purposes of this survey, a “residential service contractor” is defined as any business generating 60% or more of their revenue from residential services. This research is for informational purposes only and ServiceTitan provides no assurances (express or implied) with respect to the accuracy of the survey data.

Solutions will Equip Trade Contractors with Powerful Tools to Run and Grow Their Businesses

Mechanical Hub was onsite last week at ServiceTitan Pantheon 2023, its annual user conference, and if there was ever any doubt or fear that artificial intelligence (AI) was coming to the trades, Pantheon 2023 put those thoughts to rest.

More than 1,500 service contractors, ServiceTitan team members and exhibiting partners spent three days exploring the “Journey to the Top” theme, which included more than 50 sessions to help contractors stay on track with next-level training, tools, and insights. In addition to the sessions, attendees enjoyed networking events, product plaza exhibit space, keynotes from industry VIPs and a closing fireside chat with tennis great Venus Williams.

“Over the past year, the world has seen a dramatic acceleration in AI advancements and ServiceTitan is making sure that the trades industry will be at the forefront of this technological revolution,” said Vahe Kuzoyan, president and co-founder at ServiceTitan.

To ensure Kuzoyan’s statement rang true, ServiceTitan introduced a suite of new products to empower residential and commercial contractors with groundbreaking technology to supercharge their businesses. Powered by Titan Intelligence, the company’s own AI solution purpose-built for the trades, these new cutting-edge solutions allow its customers to automate, predict, and optimize across their entire business.

Several of the new AI-powered products introduced at Pantheon include:

• Ads Optimizer maximizes the ROI of every dollar spent on an advertising campaign by educating Google Ads to focus on potential customers who are actively looking for service providers while avoiding users who aren’t. The feature also predicts which zip codes will have the most demand and automatically prioritizes ads for those specific locations.
• Dispatch Pro runs thousands of scenarios to get the right technician to the right job, allowing dispatchers to invest more time delivering a superior customer experience. Dispatch Pro’s algorithm also finds the best technician for every job based on the technician’s specific set of skills, recent sales performance, proximity to the job, and more – all to maximize profit.
• Integrated Financing gives contractors the tools they need to grow their business and protect their margins. The feature allows ServiceTitan’s customers to strategically control plans from multiple preferred financing providers on a single job, improving their customers’ approval rates. It also gives technicians confidence in offering plans that will ultimately win more high-value jobs easily.
• Second Chance Leads automatically detects unbooked phone calls from potential customers within minutes of the call ending, and specifically flags missed calls that the algorithm believes can be saved. The tool works in the background to identify missed opportunities, so ServiceTitan customers don’t have to.

“At ServiceTitan, AI means ‘Automated ROI,’” said Ara Mahdessian, co-founder and CEO of ServiceTitan. “We want to automate all the inefficient processes that steal precious hours away from contractors and their teams every single day, and at the same time provide actionable insights and powerful features to meaningfully grow their revenue. Our AI-powered tools allow our customers to focus their time and energy on what they’re best at, and most passionate about — solving problems for their customers and delivering the best quality service.”

While the session and networking was top-notch, Mechanical Hub was also selected as a session leader. They worked with Pfister Faucets and American Plumber Stories to present, ‘Building for Tomorrow: Recruiting & Retainment Tactics.’ The session highlighted Universal Plumbing’s Larry Jones, CEO and Shalanda Morris, Business Manager, and discussed their best practices finding, training and retaining employees. In addition, we looked for answers to address major roadblocks in recruitment, and shared some creative strategies to help contractors find their next rock star employee. A packed crowd of contractors also got to watch season four, episode one of American Plumber Stories.

Mike Prencavage Jr., owner of The Family Plumber, Los Alamitos, Calif., shared, “I attend pantheon for inspiration and motivation to grow my company. Being surrounded by great leaders and business owners in the industry does so much to rejuvenate my drive to succeed. AI will help streamline not only front office processes but also front line sales interactions. It’s important to never loose sight of the ‘customer experience’ and I feel that AI will only help to improve that high level of service. Servicetitans projected plans to incorporate these AI features are only going to help the industry and better the homeowners experience overall.”

For those that don’t use ServiceTitan and have never attened a Pantheon, it’s a learning and networking event for contractors of all sizes and experience in the home and commercial service industry. While most attendees are business owners, managers, IT professionals, or members of the finance team, all trades professionals are invited and encouraged to attend.

ServiceTitan was founded in 2007, and helps residential contractors manage a range of tasks including booking jobs, dispatching technicians, processing payments and overseeing marketing campaigns.

New report reveals that Commercial Service providers remain resilient and agile in business operations despite recent revenue challenges

• 66% of contractors consider digital transformation important to their operations
• 24% of businesses have incorporated AI technology, with 80% of those businesses seeing performance improvement from automation
• In 2022, repeat customers generated the highest volume of work (69%) and revenue (44%) for contractors
• Only 30% of contractors saw an increase in revenue in 2022, and only 37% saw an increase in profits

ServiceTitan, a software platform built to power the trades, today released its first Commercial Service Report, providing insight into the challenges and opportunities facing the Commercial Services industry, as well as the strategies that businesses are employing by leveraging digital tools to stay competitive. These results highlight survey responses from more than 1,000 Commercial Service contractors around the U.S.

“Instead of looking to multiple disjointed software solutions, Commercial providers need tools that can adapt and grow with their needs,” said Vahe Kuzoyan, president and co-founder at ServiceTitan. “By embracing digital transformation, Commercial businesses can stay competitive by leveraging software to become more efficient and reduce costs, increase revenue, and provide a meaningfully better customer experience. As technology plays a larger role in business management, finding the right solution is more important than ever.”

Weathering the Storm from 2022

Macroeconomic events in 2022 created a challenging year for the industry, leaving Commercial Service contractors with a mixed outlook for 2023. According to the survey, 70% of contractors did not see an increase in revenue in 2022 — 31% of respondents reported no revenue change and 39% suffered a decrease in their revenue. With only 37% of contractors seeing an increase in margins, it’s no surprise there’s some uncertainty around expectations for 2023. 56% have neutral expectations for business in 2023, while 22% feel positive and 22% have negative views.

Commercial contractors cited a variety of risks impacting the sector; from economic recession (59%) and labor shortages (52%), to growing competition (18%) and lagging digital transformation (18%). Persistent supply chain issues still present challenges in securing materials, with 65% of respondents saying lead times for equipment have increased, and 52% reporting that material lead times for some items have increased anywhere from one week to more than two months. In terms of costs, most contractors (66%) stated that material prices have stabilized or decreased, while pricing for equipment increased (73%). As the delay in the “return to office” continues to reduce building maintenance needs, 53% of contractors have experienced an increase in cancellations or holds for their service agreements.

Focusing business goals around the customer

Even with new and continued challenges for the sector, contractors remain resilient by focusing activities on top revenue drivers like maintaining their existing customer base. The survey found that repeat customers generated the highest volume of work (69%) and revenue (44%) for Commercial contractors during this economic downturn, versus other ways of finding new customers like marketing and SEO or facilities and property management solutions. In response to this trend, owners are focusing business goals on customer retention (49%) and revenue growth (46%), whilst also putting emphasis on increasing margins (38%) and modernizing the customer experience (34%).

AI presents an opportunity for growth

The industry continues to explore artificial intelligence (AI) as a solution to streamline operations, maximize profit, and enhance the customer experience by providing time-saving tools that boost human talent. Early adopters of AI will have a competitive advantage, helping business leaders make better decisions based on AI predictions. 24% of businesses surveyed have already incorporated AI into their processes, with 80% of those businesses experiencing performance improvements from automation. Respondents see AI having an impact on a variety of Commercial use cases such as call booking (40%), invoicing (38%), dispatching (32%), and customer experience (27%).

“Finding an all-in-one software solution has eased the burden of tedious office tasks, and allowed us to focus more on our customers and business growth,” said Gary Cosmer, Partner, President & CEO of Lovett Services, a Commercial Services provider in Portland, Oregon. “For us, ServiceTitan continues to be the best solution on the market with tools like Titan Intelligence, which uses AI to deliver valuable data-driven insights and maximize efficiencies. We went from doing $16 million in revenue in 2021, to just under $20 million in 2022, and now are on track for $30 million in 2023.”

Technology is a vital tool to stay ahead of a rapidly evolving economy and competitive landscape, and the majority of contractors surveyed (66%) see digital transformation as a critical component of their operations. However, many of the businesses surveyed (59%) use more than four distinct software solutions to manage their operations, which could contribute to application overload or redundant software. This may be the reason why 16% of contractors surveyed still hesitate to adopt any technology whatsoever.

To view the full findings and key takeaways, download ServiceTitan’s Commercial Service Report here.

About the research

The survey was conducted on behalf of ServiceTitan by Thrive Analytics, an independent third-party research provider and a leading digital marketing research firm, polling more than 1,000 Commercial Service contractors representing a variety of geographical regions, business growth stages, and revenue levels. For the purposes of this survey, a “commercial service contractor” is defined as any business generating 75% or more of their revenue from commercial services. This research is for informational purposes only and ServiceTitan provides no assurances (express or implied) with respect to the accuracy of the survey data.

Industry leaders deliver innovative purchasing and payables solution that streamlines workflows and equips contractors and suppliers to grow their business

ServiceTitan, the premier software solution for residential and commercial service contractors, and Johnstone Supply, the leading cooperative wholesale distributor in the HVACR industry, announce a partnership that will empower contractors to increase revenue and grow their businesses with a frictionless digital process for inventory procurement.

The integration offers users access to the extensive Johnstone Supply product catalog, facilitating a more effective sales and efficient administrative process. Users will also be enabled by integrated purchasing and accounts payable workflows directly through ServiceTitan’s industry-leading platform.

“Integrating our two best-in-class technologies addresses a key ongoing pain point for contractors,” said Ara Mahdessian, co-founder and CEO of ServiceTitan. “The traditional interaction between contractors and distributors requires multiple software programs and even pen and paper, making it a tedious process that has a high risk of errors. This partnership delivers a groundbreaking solution that modernizes the workflow between contractors and suppliers.”

By streamlining product information, pricing, purchase orders, and payments, ServiceTitan and Johnstone now offer contractors an optimized workflow that can save them time and money.

“This is an innovation that fits well with our ‘making it easier to do business’ mission,” said Mike Chill, CIO of Johnstone Supply. “This collaboration provides Service Titan customers an opportunity to move into the future with increased efficiency, streamlined information, and easy payments that can help companies grow.”