The latest Plumbers in the U.S. Industry report found that “Maintenance and repair work done for existing buildings in residential and commercial markets combined to account for more than 50 percent of revenue in 2019.”
Now entering 2021, Angi’s report, The Economy of Everything states that the total addressable market (TAM) for home service businesses is at $595 billion.
Of that total, home improvement spending takes up the majority amount at $376.9B, then it’s home maintenance spending at $157.7B, and emergency spending at $60.6B.
Now, these ain’t no DIY projects we’re talking about here. These figures reflect the total consumer expenditures on hired-out home improvement, maintenance, and repairs.
So, how do you, as a residential home service business owner, get a piece of that pie?
In this article, we’ll be discussing some key strategies that you can use to attract and retain more customers so that you’re increasing sales and driving growth for your business.
What Does it Mean to Increase Sales and Revenue?
Mo money means mo problems. Or at least new problems, that is. Revenue cost money. More staff, middle management, health beneifts, a 401K. It all adds up, so be sure you know what you want when you decide it’s time to aggressively move the needle.
Revenue is the total amount of money that a company generates in a given period of time. You can only boost revenue two ways. Get a bigger pie, or take someone else’s pie.
Accelerating revenue means deciding how you want to approach sales. You can either be Operationally Excellent or Experience Excellent. You cannot be both well. The companies who choose a path are the companies that make the biggest splash!
Are you looking to maximize your selling strategy? At Wizard of Sales®, our C.O.R.E Playbook forms a single unified selling system for running your business, designed by master communicators to help you with increasing sales and boosting your business volume to its highest potential.
Book a demo with us today to learn more!
How to Increase Revenue and Sales
Increasing sales and revenue is a top priority for any ambitious business owner. To achieve this, businesses need to employ various marketing and sales strategies.
Here are 15 expert strategies you can use to maximize sales and revenue in your business:
Set SMART Goals
Without clear goals, it’s difficult to measure success and progress. Take the time to sit down and set Specific, Measuareable, Attainable, Realistic, and Timely (SMART) goals for your business.
This way you can decide how you want to approach said goals, such as which methods you’d like to use, and what targets you want to hit. Then, you can track your progress and make any necessary changes along the way.
One SMART way to set goals is with CAP KPIs. When you are clear on what your conversions at each touchpoint are and should be, what your average sale by business unit is and should be, and your total, gross, and net profits are and should be, you are one step closer to your CORE Vision.
Prioritize Repeat Customers
According to research, it’s up to seven times more expensive to acquire a new customer than it is to keep an existing one. Therefore, it’s crucial that businesses prioritize repeat customers to help with increasing sales.
There are several ways you can do this, such as offering loyalty incentives, including discounts, priority access, and loyal customer coupons. By showing your best customers that you appreciate their business, you’re more likely to keep them coming back.
A word of caution, though. Do not attempt to go to the well too often. If all you are perceived to be doing is mining your customers for all their gold, you will soon find that the mine is dry. Instead, treat your customers like a farmer. Lots of water, nutrients, and care, only harvesting once in a while, thne replanting the seeds to love back to life over and oer again.
Retarget Customers That Have Churned
Churn, or customer attrition, is when customers stop doing business with you. It’s important to keep track of why customers are churning so that you can take the necessary steps to prevent it from happening in the future.
Additionally, you should make an effort to reach out to customers who have already churned. You may be able to win them back with the promise to do whatever it takes to correct a previous shortcoming on your company’s behalf.
This time, don’t mess up.
You cannot change someones behavior until you have first changed their belief. -Frances Frei
Expand your Geographic Reach
Expanding your geographic reach can include targeting the other side of town with a second Google Business Profile, or setting up shop in the next town over. By expanding your geographic reach online and offline, you get more earballs on your business.
What about your Google Local Service Ads? Are you running your plumbing and HVAC under one LSA account? Tisk, tisk.
When you break up your LSA accounts by business units, you not only appease the Google Gods but you also expand your reach. Have you head the old saying, “two heads are better than one”? Well, it weirdly applies here too.
Improve Your Pricing Plan
If you want to increase revenues, you may need to consider increasing your prices. This can be a tough decision to make, but it’s important to remember that your prices should reflect the value of your product or service.
If you’ve been undercharging for your products or services, then raising your prices will boost your bottom line. Of course, you want to raise your prices strategically. By building a more sophisticated pricing strategy you can maximize revenue in a variety of different ways.
Magic of the ‘Second Sale’
Another way to increase revenue is by offering add-ons to your priority products or services. This is an easy way to make incremental sales with customers and can be especially effective if the add-ons are things that they genuinely need, like scheduled maintenance.
For example, if you own an HVAC business, if a priority repair had you cracking open the condenser, you could offer a deep clean of the condenser (since you already have the system torn apart). Heck, you could easily do it for 20% less too, since you’ve already got it torn apart. Given that you paid for your fixed ops expense on the first sale, the second sale is mostly profit, aside from your variable costs of goods sold. This is the power of incremental profit and the magic of the second sale.
Product or Service Bundling
Price bundling is another great method for increasing sales and revenue. This is when you offer two or more products or services together at a lower bundled price, which entices customers to buy more from you because they feel like they are getting a good deal.
For example, an HVAC company has a duct cleaning that they can perform at an 85 point margin, while a typical new unit installation comes in at 50 points. What if you were to bundle the two and make a total profit of say…54 points?
Product and Services Upsell
Unlike add-ons, upselling is when you offer customers an upgraded or premium product/service. With add-ons, you are only “adding” another product/service. Upselling replaces their original purchase and convinces the buyer to “go bigger.”
With upselling, it is important to ensure that the customer appreciates the value of what they are getting. They should feel like they are getting a good deal and that the product/service is worth the price. Think about a Ford F-150. You can buy a base model for $30K or you can get a top of the line model for $90K. Or you could sell them a nicely equippped F-350. What are you selling?
The majority of people are not able to outright purchase a product/service, especially with raising prices and big-ticket items outside their cash reserves. The average American has $5100 in their savings account right now, and most of them don’t want to spend it on a service repair or upgrade to their air conditioner.
Finance options allow customers to spread out the cost of their purchase over time. This makes the product/service affordable and easier to justify, therefore increasing sales for your business.
You can simply offer the customer the option to pay in full or to make monthly payments. Don’t shy away from 0% options either. While they cost your company more to extend, by adjusting your prices accordingly, you will capture upward of 30% more buyers who would have otherwise said no altogether.
If you have a product or service that can be delivered on a regular basis, then you may want to consider offering subscriptions. I’m not talking about a maintenance club, rather a filter of the month club, or a monthly gutter cleaning service.
Subscriptions offer customers the convenience of having your product/service automatically delivered to them at a time they’ll be ready to use or consume it. This can be weekly, monthly, or even quarterly.
This not only saves the customer time but also creates a sense of loyalty, as customers are more likely to stick with a service that is convenient for them. And we all know that an increase in customer loyalty means increasing sales.
Grow Club Membership
If you have a club membership, you might want to start thinking about adding more value for your existing members or creating a new level of membership.
For HVAC companies, consider adding things like discounts on duct cleaning or whole-home inspections to your highest level of membership. You can also offer discounts or loyalty points for customers who refer new members to your club. These additions will give customers more of an incentive to stay with your club, as they will feel like they are getting more for their money.
Create Customer Feedback Forms
When was the last time you asked your customers how you could improve your business? Customer feedback forms are a great way to get honest feedback about what your customers want and expect from your brand.
The feedback you receive can help you make changes to your business that will increase customer satisfaction, loyalty, and revenue.
One way to collect feedback is to create a simple survey that customers can fill out when they visit your website. You can also include a link to the survey in your email newsletters.
Update Your Marketing Channels
Many businesses tend to act like their sales channel is a one-and-done deal. But if you want to continue generating revenue, you need to keep your sales channel up-to-date. That means making changes as your business grows and your customer base changes.
For example, if you’re a plumbing company that has stuck to PPC ads as a sole means of marketing, you may want to consider telling your brand story to considerably more people on TV or radio. The fact is, most people in your market don’t have a clue who you are.
Become a Household Name
Your brand is what sets you apart from your competition. It’s how your customers perceive you, and it encompasses everything from your company name and logo to your buying experience. If you have a strong brand reputation, people will know, like, and trust you BEFORE they need your thing.
Improve your brand identity with a stronger brand message delivered to as many people as you can afford at a very specific frequency to ensure the necessary retention and recall when a problem arises.
If your message is flacid and heard too infrequently, at best, you’ll earn name recognition. Done right, you go from name recognition to becoming a cherished household name.
Review Your Online Presence
Your online presence is one of the most important aspects of your brand presence and increasing sales. Your website should up-to-date, informative, easy to navigate, and visually appealing, but more than anything, it needs to convert. Your website should also be responsive, meaning it looks good on both desktop and mobile devices.
In addition to your website, pay attention to your social media accounts and online directories. These days, potential customers are likely to check your Facebook, Google Business Profilem and Yelp accounts before they decide to do business with you. Post engaging content that will encourage your people to interact with you and share. In addition, make sure you respond to any questions or comments left by your prospects promptly.
Top 3 Challenges for Growing Businesses
So, what is it that holds businesses back from achieving their next level of growth? Here are the top three challenges that we see:
- Obtaining consistent, high-quality leads.
- Converting more sales at a higher average sale and profit.
- Attracting and retaining employees.
Which one do you think acts as the catalyst for the other two’s success? Number three.
When you get number three right, number one and number two fall into the right place, just like a plumber prefers.
So how do we attract and retail better employees?
Pay your people well: This is a highly effective way to improve employee morale and motivation, which leads to increased productivity.
Give them incentives to join your team: Offering a great benefits package, company culture, and opportunities for advancement are all great ways to attract top talent.
Establish a happy and healthy work culture: Creating a positive work environment where employees feel valued, appreciated, and enjoy themselves is key to retaining great employees.
When your employees are happy, your productivity increases by 20 percent.
Your sales increase by 37 percent.
When you make your employee experience (culture) a top priority, they’ll reward you with better loyalty and a better bottom line. Period.
If you need some help with sales and on how to get started from number three and up, we’d be happy to help.
At Wizard of Sales®, we specialize in employee coaching, sales training, and business development.
We’ve helped businesses like yours achieve their full potential by improving communication, building relationships, and developing leadership skills.
If you’re interested in learning more about how we can help your business grow, book a demo with us today!