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As energy-efficient home upgrades gain popularity and homeowner spending is set to reach $500 billion in the U.S. this year according to HomeAdvisor, (tinyurl.com/44ueju5r) there has never been a better time to be a home contractor. But to capitalize on this opportunity, contractors should be asking themselves: How can I own the home?
More contractors are embracing a “Own the Home” strategy, becoming a one-stop-shop for everything a homeowner might need. While there’s nothing wrong with running a shop that specializes in plumbing or HVAC only, plenty of contractors who were just one or the other are now both. Plus, still other plumbing and HVAC contractors are adding electrical and other home services.
Let’s take a look at why this strategy is growing in popularity, its challenges and its benefits.
Challenges facing contractors
Contracting businesses across the U.S. are operating in difficult circumstances: they facing higher expectations from customers, inflation and economic pressures, and rising competition from new market entrants and private equity investors. Alongside that the contracting industry continues to feel the effects of labor shortages: 40 percent of field service businesses lack skilled workers, and according to SightCall, (tinyurl.com/535vzd3p) nearly half struggle to meet their customer service level agreements.
Today’s contractors find themselves having to do more with less, so they need innovative, cost-effective strategies for maintaining their future profitability. Hence, the need for contractors expanding the list of specialized services they provide to offer more options for the everyday homeowner.
Homeowners are increasingly looking for one-stop-shop solutions, and those contractors who can meet more of these needs are winning long-lasting, repeat business.
Adopting an “Own the Home” strategy can increase revenue by allowing for cross-selling and up-selling. Additionally, this approach fosters stronger, longer-lasting relationships with customers. By meeting more of their needs, contractors can retain clients and build a loyal customer base.
Focusing on existing customers can also help reduce marketing expenses. It is becoming more cost-effective to generate income from current clients rather than constantly seeking new business. This strategy also helps contractors stand out in a crowded marketplace, offering a variety of services can differentiate them from competitors and attract more business.
Finally, managing a home involves many responsibilities, and having a reliable point of contact simplifies the process. Homeowners value the convenience of one trusted contact, and are likely to remain loyal, making this approach not only beneficial for the business but also highly appealing to consumers.
Risks and challenges
Many might be looking at this concept and thinking – how am I going to upskill my employees to offer new services? However, those who have already embraced this shift have discovered that the new skills are closely related to the services they already offer, making training transition relatively easy. This enables contractors to boost profitability and overcome labor shortages by leveraging their current knowledge and upskilling their existing teams to expand into ancillary services.
Alternatively, others have chosen to partner with external contractors, such as home generation or electrical, so that they are the ones collaborating with the homeowner to solve their needs– even if they are not providing the actual service. From the homeowner’s perspective, having only one person to work with for all their home’s needs is invaluable.
The key is a gradual approach, by starting with one or two adjacent services. This may be why a plumber offering HVAC services, or vice versa, is a natural progression. Businesses can also consider working with their distributor partners or other consultants in the industry to learn more about other services they could offer – or partner with other companies to provide a more complete list of services to their customers.
Another critical factor is to leverage technology to help implement the changes. The right management system streamlines operations and service adoption. Make sure the company is running a solid service and maintenance agreement program. Doing this will help stay connected to customers, build their trust, and ensure you are reminded to maintain and service their units annually – rather than just when a unit breaks.
The most successful home services businesses are those that maintain close relationships with the homeowner. Be sure to collect key customer information and store this in the Client Relationship Management (CRM) part of your system. FieldEdge by Xplor for example, is a CRM at its core – managing all the information about your customers, such as the age of their system, size of the family and other systems they use in their home. This software helps deliver timely, personalized service onsite and stores data to anticipate customer needs and identify useful new services.
Once you have decided on which new services to offer, then you can think about promotion. Consider using business management software that has in-built marketing automation features to help promote your services to customers. There are ways to automatically email and message customers, without heavy training or tools needed. Whether you are following up on feedback for a job or trying to let your customers know about a new service offering, marketing automation tools inform customers quickly and easily.
Finally, the “Own the Home” strategy is uniquely customer-centric, so it is important to make sure you are adding services that are in demand for the local area and staying in touch with what customers need and want. If you are the contractor that stays in regular touch with the homeowner, then you will be the contractor that stands the best chance of “Owning the Home.” l
Jessie Barrack is the senior vice president, business development, field services at Xplor Technologies, a leading provider of SaaS business management solutions for the HVAC, plumbing and electrical industries.