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 Read more
technology investment
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.
Running your own small business takes a huge amount of time and energy, so there’s a lot at stake when you open your doors to customers each morning. It’s vital that you can make an effort to modernize your small business if you want to achieve long term success, as you need to adapt to Read more
Running your own small business takes a huge amount of time and energy, so there’s a lot at stake when you open your doors to customers each morning. It’s vital that you can make an effort to modernize your small business if you want to achieve long term success, as you need to adapt to the changing times if you want to keep up with your audience. Fortunately, figuring out how to modernize your small business doesn’t have to be as difficult as you might initially imagine, as there are in fact just a few easy steps that you can follow to turn your company into a more contemporary and innovative organization today. So, if you’re interested in finding out more, then simply read on.
Develop A Social Media Presence
One of the best ways to modernize your small business is to develop a social media presence, as every successful brand has its own social media pages in today’s market, and such platforms can be used for a variety of different practices and purposes which will be of great benefit for your brand. It couldn’t be simpler to set up a commercial social media profile, as all you need is an email address, password and potentially a username that other people can search for when trying to locate your small business online. Once you have a profile set up, you can begin to create unique and interesting content in the form of text posts, photos, videos, graphics, links and so much more! Such content can help you to attract followers and grow your audience, but you may need to use additional features like hashtags and sponsored ads to promote your posts far and wide. A great way to increase your reach on social media is through the use of an ‘influencer’, as these individuals have managed to amass hundreds of thousands of followers that impatiently await new and exciting posts. They can give your brand a shout out and offer some positive words, causing masses of their followers to flock to your page to see what all of the fuss is about.
Upgrade Your Technology
Upgrading your technology to the latest and greatest equipment should be your next priority, as attempting to perform to the best of your abilities as a modern business will be extremely difficult if you don’t have the means to meet advancing expectations. Attempting to use a computer from the early 2000’s will hold your entire team back from working in an efficient and productive manner, and such a decision could also put your commercial and customer data at risk in a totally insecure and unsafe way. Thankfully, upgrading to something much more modern like a brand new Mac will put an end to your woes and speed up your operations like never before, allowing you to thrive to your full potential as a small business. New technology is far easier to troubleshoot and maintain as you can use resources like the one here, so you can rest assured knowing that your small business can meet and even surpass modern needs.