Think your service business is doing fairly well, but not sure how it compares to others in the same industry or market? Quickly see how your business stacks up against the competition by downloading ServiceTitan’s latest Benchmark Report, released every quarter.
In the upper, right-hand corner of your ServiceTitan dashboard, click on the TitanAdvisor rocket ship icon to see your TitanScore, then find your customized Benchmark Report in the link directly below it.
“That's the No. 1 question everyone always asks me, ‘How's everyone else doing?’” says Deanna Kawasaki, Senior Director of Titan Intelligence. “You may be doing 20% or 30% growth, and you're thinking, ‘This is amazing.’ But if everybody else is doing 40%, maybe that’s not as amazing. Or you may only be doing 5% or 10%, and you're thinking, ‘Wow, this is terrible,’ whereas everyone else is doing 2% or 3%. This is exactly what the Benchmark Report was designed to help with.”
In a recent webinar, Kawasaki and Chris Hunter, ServiceTitan Principal Industry Advisor, highlight changes made to the Benchmark Report to help contractors better understand their business performance, and discuss critical issues affecting the service industry, such as consumer confidence, policy changes, and the weather.
Use their expert advice to spring into action and build a more resilient business, no matter the current economic conditions.
Consumer confidence
According to the latest consumer confidence ratings released in April, Kawasaki says, the numbers continue on a downward trend.
“Consumers—while other statistics seem to be okay in regard to incomes, unemployment rates, and things like that—their confidence in the economy is decreasing,” Kawasaki says. “That's important, because it affects their decisions on those install tickets, those large-service repairs above $1,000, and things like that.”
The two biggest factors bearing down on consumer confidence, she says, are the cost of gasoline and food, which continue to be higher than other inflationary expenses. More consumers are using credit cards to purchase food and gas, which depletes their credit cards when they need to use them for emergency system replacements or large-ticket repairs.
“They just don’t have the room on their credit cards,” Kawasaki says.
For ServiceTitan customers, the contractors who provide services for those consumers, she says the data shows a distinct separation into two groups.
“We all know the standard bell curve, what they call the normal curve [on the left in the graph below],” Kawasaki says. “What I'm seeing, though, is that [ServiceTitan] customers are pulling apart into what we call a bimodal distribution. Basically, two humps like a camel.
“What that means is there are two groups,” she explains. “Some groups seem to be doing a lot better, and some seem to be doing worse.”
“When she told me this, I was like, ‘Well, that's it,’ because everyone I've talked to has been on one side or the other,” Hunter says, adding how he even found the two extremes in the same market.
Kawasaki, a self-described data nerd, explains bimodal distribution this way:
“It’s cool from an analytical standpoint, not so cool if you're on the bottom tier of the business,” she says. “But the averages in medians and numbers you may be seeing in the field or in things you're tracking are going to be roughly the same because the middle point is all smoothed out. And you can't see. If you don't know what you're looking for, you won't know when you find it. I've seen these kinds of things in multitudes of businesses and industries.”
“That explains everything I've been hearing and seeing," Hunter says.
The separation started happening at the end of 2023, Kawasaki says, and became more prominent throughout the first quarter of this year — all due to lagging consumer confidence.
“Consumers are reporting they’re not going to do big purchases even more so in the next six months. They’re concerned about their incomes not increasing. They’re concerned the economy isn't going to be where it should be,” she adds.
Policy changes
The data also indicates the presidential election year plays a pivotal role in the lower consumer confidence ratings, Kawasaki says.
“We are in a highly visible, highly combative election year. And with that comes a lot of nuances of how that's going to impact the consumer, as well as your business,” she explains. “The election year is a very pivotal time because it’s when policy changes.”
When policies change, the costs of doing business tend to increase and, ultimately, those costs trickle down to consumers. In addition, the global political environment weighs on consumer confidence.
“We're hearing a lot of disrest, and that’s impacting how consumers are thinking about spending their money and where they're going to live,” Kawasaki says. “Do I need to save my money? Do I need to worry that something's going to happen and there'll be another shutdown?”
It’s also good to put the numbers in perspective, Hunter says. For instance, quarterly reports show ServiceTitan customers are starting 2024 with an average 9% year-over-year growth, but those same averages reached 26% just a short time ago. But if contractors remember the pre-COVID era, reaching 10% year-over-year growth seemed like a pretty big deal.
“Ten percent was a pretty good success rate back then,” Hunter says. “So it’s down compared to where we were, but 9% is still not terrible.”
Information empowers growth, so use it to gain a competitive edge.
“I challenge you to choose your side, because whenever I've talked to people who are doing really well and those who aren't, it all comes down to leadership and execution,” Hunter says. “So choose which side you want to be on.
“The good news is, you can definitely get back on the rising one if you just start doing the fundamentals and executing the way we need to be executing,” he adds.
Weather
In the graphic above, the data shows ServiceTitan customers in western states growing at a slower average rate than those in the Upper Midwest, Northern Rockies, and Ohio Valley.
“Weather played a large part,” Kawasaki says. “In the West, from last year to this year, the weather was much milder. Whereas in the Southwest, like Arizona, we had 40-something days of straight heat over 100 degrees. And I expect the Southwest to be very hot again this year.”
The bottom line?
If you haven’t already done so, start shoring up the service side of your business, and rely less on the install side, the two experts say. A strong service operation helps to build business resilience during tough times when consumers hesitate to spend.
“It's tough out there,” Hunter says. “But we’ve still got to get them to spend money, and they will if we make it easier for them. For the companies that are still really successful, what they're doing is they're leading with financing.”
“They're not making this an afterthought,” Kawasaki adds. “They're leading with it, and giving people the options they need to still make the purchase.”
With service trends leaning toward repair over replacement, Hunter says now is the time to get your financing plans in place, and then train techs to lead with it when presenting proposals so customers can choose the best option.
And trying to build or maintain your customer base with discount offers often fails to work in a cash-crunch or credit-crunch environment, Kawasaki says.
“The discount hurts your bottom line, and it doesn't really help the consumer in the end,” she says. “What they really need is a line of credit, and then they will buy it.”
As market conditions change, your approach to capturing new customers with financing offers will also change. Keep tabs on your ServiceTitan Benchmark Report to know when to adjust.
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Upcoming changes to improve business insight
Hunter highlighted a few changes coming soon to increase business insight for ServiceTitan customers.
Financing Dashboard
One update adds a new financing dashboard with more informative metrics on display.
“Basically, all things financing,” Hunter says. “In the past, you couldn't really see, ‘Hey, what's our approval rates?’ or ‘How much of our percentage is from financing?’ You would have to really do some reporting and digging to find it. Now, it's all going to be right there on the dashboard.”
Plan Optimizer
Avoid the mind-numbing task of sorting through complex financing plans, or even losing money by selecting the wrong one, with ServiceTitan’s new Plan Optimizer feature.
“It's going to use Titan Intelligence to figure out each tier you have within a range that's sold, which plans are the best for that, and then it's going to give you multiple options,” Hunter says.
Both Financing Dashboard and Plan Optimizer are coming soon.
Forms Submission Dataset
To improve the customer follow-up process, a new Forms Submission Dataset will capture the right information to inform your business reporting and marketing campaigns.
For example, a technician may inspect a customer’s HVAC system and discover very high static pressure, indicating a need for duct repairs or modifications. If the customer chooses to hold off on that fix, you can add a “high static pressure” tag to that customer, then pull up a report that shows all customers with that tag.
“We can then target them with a marketing campaign for duct renovations that lower your utility cost, increase your equipment life, and get air to that room that's always too hot or too cold,” Hunter says. “It can help you make more money while your technicians are in the home.”
Policy changes affect your bottom line
One big policy change affecting the HVAC industry at the end of 2024 is the phasing out of the R-410A refrigerant for more environmentally friendly options, Hunter says. That means the cost to purchase a new air conditioning unit will increase by as much as 20% to 25%, making it even harder for customers to choose the replacement option.
“This is why we need to do whatever it takes to make sure your service department is making money and can stand alone, and not just rely on the install,” he says.
Software features to protect your business
Hunter highlights core and pro ServiceTitan features that can help businesses remain profitable during tough economic times.
Dynamic Pricing
This core ServiceTitan feature helps businesses protect their profit margins by setting pricing for flat-rate services based on multiple factors, such as after-hours jobs, add-ons, membership discounts, and more. Dynamic Pricing uses industry best practices to calculate prices so you can optimize margins across multiple trades.
Configurable Services
Available to Pricebook Pro users, the new Configurable Services feature helps techs automatically select the most relevant vendor materials used on the job. This allows you to track the actual parts used, simplifying price setting, job cost management, and inventory tracking.
Dispatch Pro
“The last one to help us stay profitable is the game changer for me,” Hunter says. “Dispatch Pro: Right tech, right job, right time.
“I’ve talked to so many people who are gaining so much efficiency in their business just by trusting and letting Dispatch Pro do its thing,” he says. “Your CSRs book the job, then Dispatch Pro analyzes and runs all these computations, figuring out who's the right tech for the right job at the right time, and predicts the outcome for you.”
Get ready for a hot, early summer
According to the Farmers’ Almanac, Summer 2024 will come earlier and be hotter than last year, Kawasaki says.
“We're tracking it because we see a lot of demand,” she says. “We try to help our customers with understanding not only the growth as it relates to revenue, but the call demand and handling potential business. That's what we’re trying to do here, by giving you this preview of the weather and what to watch out for, when to be prepared.”
Heat waves definitely increase call-demand, Hunter says, with a recent study showing the first heat wave in an area can increase your revenue by 55%, and sometimes as much as 90%.
“My message here is: Be prepared. Capture opportunity,” Hunter says. “If we know it's going to come, the first two heat waves we get are so critical in capturing those replacement opportunities, those big-ticket items.”
And don’t miss out on the secondary wave of calls that typically come in within a day or two after a heat wave, Kawasaki says. Those are customers typically looking for a second opinion on whether their system truly needs to be replaced.
What winners do to succeed
What are the best of the best doing when opportunity knocks? First, they’re winning at Google, Hunter says, by ranking the highest and garnering the best reviews.
“Obviously, when opportunity arises, they're capitalizing,” he says.
ServiceTitan’s Marketing Pro full suite of services includes Reputation Management to help you solicit, identify, and respond to all reviews and integration with Google Ads to help you use your own data to re-market and target the right customers.
Secondly, they make it easy for customers to book a job.
“How much easier can it be than if they book it right on your website and they're able to schedule when they want, with everything right there?” Hunter says. “If you haven't checked out Scheduling Pro, I would check it out ASAP. That's what today's consumers want to do. ”
Finally, they use Titan Intelligence to easily identify second-chance leads and book more calls.
“What we're finding is, Titan Intelligence is really good at finding these calls that slip through the cracks. And when you act on them, customers are booking at an extremely high rate,” Hunter says.
The Second Chance Leads feature requires the Phones Pro add-on, but recent stats show 65% of customers recoup their investment in Phones Pro with revenue generated by Second Chance Leads.
Call booking rates added to Benchmark Report
Based on customer feedback, ServiceTitan added call booking rates to its Benchmark Report to help businesses quickly see how they stack up against others when it comes to the number of calls booked.
The graph above shows a higher average call booking rate, but a lower completed revenue score, whereas the graph below shows a higher completed revenue score with a lower call booking rate.
In the first scenario, the numbers probably mean their services are priced too low or the techs’ billable efficiency is too low and they’re not doing enough to protect their profit margins, Hunter says. In the second scenario, they just need to dig in to find out how to book more calls.
“It might be that they're not utilizing financing. They may not be sending the right tech to the right calls. They may be booking every call, when they need to concentrate on the more profitable calls,” Hunter says. “That's the beauty of data, of benchmarking. That's the beauty of being able to see what's going on between you and other companies. It gives you a tool to dive into the data and take action to make your company better.”
Set up call reasons
To increase call booking rates, first verify the integrity of the data documented by your CSRs. Then, check to make sure your call reasons are set up correctly. CSRs may have classified the call with the wrong reason, for example.
Also, check the permissions for each employee to prevent them from making unnecessary changes to the call reasons.
“Check your permissions, make sure your call reasons are set up right, and then you can monitor them to see if they're actually doing what's right,” Hunter says.
Review agent scorecards
If you don’t have Phones Pro or Second Chance Leads, try to at least do a spot check of CSR scorecards, either by a manager or peer review.
“Especially look at the excused calls, see why they're marked excused, and just spot check them. See if they're actually doing their job,” Hunter says. “There may be some coaching opportunities there for you to help them book more calls and get accurate call booking rates.”
Invest in your CSR team
Conduct weekly CSR training to demonstrate best practices and help your team grow.
“If you're having trouble with your call booking rate, listen in on some,” Hunter says. “Is the CSR showing empathy? Are they asking questions? Is the customer talking more than 50% of the time? Well, if not, you might have some room for training right there.”
Prepare your CSRs to handle heavy call volume by establishing a “standby/urgent list,” allowing them to book calls during busy times by letting the customer know your techs will get to the customer’s home as soon as an opening pops up.
To learn more tips on increasing call booking rates, check out this webinar, Call Experience That Performs, by Principal Industry Advisor Angie Snow and Customer Advocacy Specialist Brittany Burgess.
Winning with ServiceTitan
In summary, Hunter says ServiceTitan customers find success by choosing to win and to execute their game plans. They also choose to play the victor, not the victim, and they utilize the Benchmark Report and KPI measuring tools to improve and repeat performance.
“Go back to the basics. It's not rocket science here. All we're doing is we're serving really, really well,” he says. “You’ve got to win on Google. You’ve got to win on your reputation. You’ve got to book the call when it comes in. And then you have to execute when your tech gets to the house and does a very thorough job using your tools in ServiceTitan.”
