Paths to Confidence: What Home Services Companies Need to Do to Drive More Business in 2018

Following major hurricanes and other adverse weather events throughout the southeast, home services organizations are feeling more confident than ever in their ability to grow revenues, support customers, and convert leads to sales. However, recent research has found that many of these companies may have misplaced confidence in their futures, with many expecting tempered revenues or lead conversion challenges. We would like to look at recent research among these professionals and offer tips on improving in 2018 and beyond.

The HomeAdvisor Farnsworth Index is a quarterly survey designed to gauge home services contractors’ confidence in the market, hiring trends, regulatory impact, economic outlook, and more, offering a pulse on the home services contractor market. The latest survey, the Q3 Farnsworth Index, was conducted in August 2017, included 1,277 respondents across various construction and remodeling trades within the five industry segments, and discovered some interesting trends in the current market.

Is There Misplaced Confidence?

While home services contractors are extremely confident at the moment, there are some underlying dangers that come with too much confidence, according to the survey. The Q3 Farnsworth Index found professionals across all five industry segments—remodel, exterior, mechanical, finish, and landscape—ranked their confidence in the next 6 months at nearly a perfect score: The lowest confidence rating was an 8.6 out of 10 in the finish and exterior industries, with highs of 8.9 in mechanical and landscape.

However, digging into the numbers, many may be overconfident: fewer contractors expect that the next 12 months will bring increased revenues. When asked about whether respondents expect revenues to increase, decrease, or stay the same over the next 12 months:

• Exterior contractors are tempering their expectations: 85.8% expected their revenues to increase in the Q1 index. Just six months later, this number has dropped to 80.4%, with nearly 20% expecting that revenues would stagnate or even decrease, up from 13.7% expecting the same in Q1.
• Twice as many landscape contractors expect decreased revenues as they did in Q1: Landscape companies have also tempered their expectations, and the percent of respondents expecting revenue decreases has doubled over the past six months.
• The past three months have presented a blow to finishing contractors: Going into Q2, finishing contractors expected to at least maintain revenues over the next year. By Q3, however, the number of respondents expecting decreases in revenue is six times higher than it was just three months ago. This may be driven by the fact that Q3 was apparently quite painful, with 5.9% seeing decreased revenue per project in the latest index.

While one of the top causes for tempered expectations among home services professionals is related to companies’ challenges in hiring skilled labor, another pain point pertains to these companies’ inability to convert in the highly competitive home services market.

The Challenges of Conversion

For many home services companies, the biggest challenges pertain to finding high-quality leads and completing the last mile—converting these leads to customers. Compared to overall confidence, confidence in the ability to close is much closer to the middle of the road—with companies ranking their ability to close at no higher than 6.5. Beyond that, lead generation is even more troubling, with respondents rating the volume and quality of leads at approximately 5.8 out of 10.

This, of course is notable, because even in the wake of labor shortages, contractors still see confidence in finding talent (6.3 to 6.9) higher than confidence in converting leads. Broken down by industry, those specializing in mechanical services are the most successful, with 54.9% closing more than half of their leads, and 35.1% closing more than seven out of ten leads.

The Path to Success for Home Services Contractors

Converting leads is a science, and requires a hands-on approach from salespeople, customer service representatives, schedulers, and the technicians who serve the customers. While some of the services discussed are steeped in emergency fixes, this doesn’t mean you should treat each repair or remodel as a single transaction. If you hope to grow your revenues in 2018 and beyond, you need everyone on board in order to provide high levels of satisfaction in order to drive low-cost, high-value repeat business.

From the first call to the repair to repeat business, it pays to empower technicians, facilitate conversations, and increase satisfaction. Enter ServiceTitan. ServiceTitan is used by some of the fastest growing home services businesses in the nation, with many of its clients doubling their revenue the year they implement the software. The software is designed to improve sales, make customer service easier, and to streamline operations in order to help your technicians get the job done quickly. Learn more about succeeding in the home services industry by reading Why Trade Services Companies Turn Toward the Cloud, get to know the software by reading our product spotlight, and contact us to learn about our role in recommending the software and its newest integration—Sage Intacct.