Finding success in the fiercely competitive commercial service contracting industry requires adopting a smart and adaptive set of plays to get you out of the fray and on to your next phase of company growth. Whether faced with a competitor’s jabs, looming slumps caused by economic downturns, or crippling labor shortages, you need to be adept at preparing for any curve ball that comes your way, so you can sidestep demise and ensure the stability and success of your business.
In this article, I'll share some steps you can take to improve productivity, attract and retain customers, and ignite revenue for your commercial services contracting business.
Review to Reject or Renew Your Customer Roster
If an economic downturn hits, do you know which customers are healthy enough to withstand the slump? To prioritize your customers effectively, assessing which customers have potential vulnerabilities in an economic downturn is important. As unsavory as it may feel to weed out customers based on their perceived financial health when facing prolonged economic slumps, this is a smart strategy to put in place so you can have a general sense of which customers may be most likely to stop paying you at the slightest sign of turbulence.
During a downturn, capital flows slow. Any business you have relating to construction or servicing businesses that sell durable goods (which generally require access to capital for purchase) is going to slow down. The capital is not readily available to finance construction and durable good purchases, so the customers that rely on that capital to pay you will stop paying. Examine your customer portfolio to determine if the revenue spent with you is coming out of a capital budget. When those capital flows slow in a downturn, your revenue will go down with it.
Similarly, it’s important to identify accounts that are simply difficult to work with. Do they constantly delay payments? Do they drag their feet when it’s time to upgrade their equipment to minimize risks? These customers should be red flags for you. Consider shedding these detrimental relationships. Doing so creates an opportunity for greater growth and stability in your customer base
By contrast, those companies that you service that have a pretty predictable stream of revenue independent of the economy will continue to be able to pay you when capital flows slow during a downturn. Good examples are healthcare, education, and government entities. Their operating budgets are typically reliable no matter the economic situation so long as the demographics of the population where they are located continue to be steady (i.e. the region is not experiencing a population outflow, in which case you have bigger problems to face anyway). Review the financial standing of your customer base and their relative vulnerability to economic downturns to grade out the top prospects for engaging on terms for a long-term commitment from you.
Before the downturn comes, you want to recognize and protect your best customers. Acknowledging and renewing your best customers is crucial for maintaining stability and growth. Renew customers who have steady and reliable revenue no matter the economic situation along with those who are easy to influence with your best practices for maintenance. Incentivize customers who are amenable to your expert guidance and who follow recommendations for preventative maintenance and risk reduction.
Reducing risk in your customer base with more reliable equipment helps you to build a better schedule and make the best use of your scarce labor. Emergency work caused by faulty equipment is not a good use of scarce labor. Provide these customers favorable terms and incentives to lock them into a long-term agreement. Consider offering predictable, regular subscription payments, all-inclusive pricing, and addressing any outstanding equipment deficiencies that could lead to emergencies within the scope of the full-service maintenance agreement.
By renewing these customers under advantageous terms you guarantee cash flow, minimize emergency calls, and foster loyalty with your top customers while giving them great customer care. This strategy fixes their costs and provides them with the satisfaction of a reliable service provider.
Reach More Prospects
To grow your business, it is important to identify and connect with the customers you want to do business with. Build a list of 50 accounts in your market that you would like to have as customers. Use the criteria you used to review your current accounts to evaluate prospective customers. Consider whether they pay out of their operating budget and have a reputation for proactive facility care. Try to avoid companies that will be sensitive to the slowdown in capital associated with economic downturns.
Once you have identified your target accounts, contact them and ask questions about their current service provider, their level of satisfaction, and areas for improvement. This allows you to demonstrate how you can provide better value and meet their needs.
Steal Market Share Through Differentiation
Differentiating yourself from your competition requires more than generic claims of better techs, caring more, or having the lowest cost. These are platitudes that are easy to say and difficult to believe. I am fond of saying that all customers are from Missouri, the show me state. If you are different, then show the customer how you are different. To stand out, create memorable experiences beyond pricing by showcasing the unique value your company provides. Replace empty platitudes with proof and examples that clearly show your business values.
Build your online presence and use collaborative service technology applications to show prospective customers what their experience will be like working with you. For instance:
- Share reviews and testimonials from your happy customers to make your brand memorable. There are lots of applications that can help you build your online review profile as part of the normal workflow of delivering service. These reviews are an important part of a healthy digital wrap strategy where your normal service activities deliver marketing impressions online—just like a truck wrap delivers impressions during the service cycle but with the benefit of being more permanent and searchable.
- Invite target customers and technicians to join training, meetups, or manufacturer events at your facility. This allows them to experience firsthand your company culture and the satisfaction of your existing customers.
- Position your services as a customizable subscription program tailored to the diverse needs of various customer segments. Show them that you are sharing risk as long as they are responsive to your suggestions for upgrading and improving marginal equipment that drives unpleasant emergency work.
- In sales demonstrations, guide potential clients through your user-friendly online customer journey. If they cannot see the work you did via an online experience, they will be skeptical that the work ever occurred at all. If all you ever share with your customer is an invoice with cryptic accounting codes and descriptions, all they will ever talk to you about is price. Treat them like they are from Missouri—show them your value online to make it easy for them to do business with you.
Implementing these strategies will help you ensure the growth and stability of your service business. By reviewing, rejecting, and renewing customer relationships, you’ll be better prepared to weather external pressures such as labor shortages, skills gaps, shifting competitive landscapes, or a softening economy. Additionally, by connecting with and converting the competition's customers and technicians, you can drive growth, expand your market share, and position yourself for success in the competitive commercial service contracting industry.
Billy Marshall is the founder and a strategic advisor at ServiceTrade. He is a sought-after author and speaker on topics relating to innovation, technology, and digital marketing and sales methodology for commercial service contractors. Billy’s professional experiences include leadership roles in product, sales, and business development at a range of companies, including Fortune 100 companies, family-owned contracting businesses, and startup ventures. His experience offers a broad perspective from which he coaches commercial service contractors on best practices for thriving in increasingly competitive business markets.