New ServiceTitan Data Highlights Contractors’ Focus on Revenue Growth in 2024
LOS ANGELES – March 26, 2024 – ServiceTitan, a software platform built to power the trades, today released its first Exteriors Contractor Market Report, representing more than 1,000 contractors in the roofing industry as well as gutters, siding, solar, windows, skylights, decks, doors, and insulation.
Exterior contractors' profit margins remain tight as they navigate rising material costs and a continuous shortage of qualified workers. According to new survey data from ServiceTitan, most contractors' goals are to acquire new customers (66%) and grow revenue (65%). To achieve these goals, businesses plan to streamline labor costs (64%), reduce turnover (38%) and increase technology use (27%).
“The residential service industry is undergoing rapid change, and businesses that lean into the current digital transformation are at a major advantage to accelerate revenue growth compared to their competition,” said Chris Petros, General Manager of Residential Markets at ServiceTitan. “We’re also seeing increasing interest from private equity groups, in addition to acquisitions by contractors looking to expand into multiple trades and new locations. I believe this trend of consolidation in the industry, coupled with new technology solutions that are adding value to exterior trades businesses, has the potential to increase revenue growth for the residential trades market substantially.”
Contractors remain optimistic about business growth by centering customers in their business strategies
The majority of contractors are optimistic that both their revenue and profits will increase or remain the same in comparison to the previous year as the economy improves. Contractors plan to stand out by building a good brand reputation (82%), providing an elevated customer experience (60%), and exceptional workmanship (55%). Customers prioritize reputation (71%) over experience (58%) and workmanship (54%), proving that long-lasting relationships may be the best way for contractors to build up their client base.
Remodeling and renovation provide the biggest opportunity for exterior contractors, yet labor shortages and materials challenges persist
Nearly half of the businesses surveyed stated renovation and remodeling are the biggest opportunities for growth over the next few years. Additional growth opportunities include adding new locations (34%), and new services (32%). Contractors reported roofing restoration (28%), solar (26%), and siding (20%) as the most important services they are investing in.
While new business verticals provide opportunities for expansion, staffing and cost continue to create roadblocks. In 2024, the biggest identified challenges included staffing (57%), overhead costs (56%), and rising prices of materials (56%).
Strategic technology investments and business optimization are key to staying ahead of the competition
Technology is helping contractors streamline their business processes by minimizing time-consuming back-office work, and providing prompt customer service. Over thirty percent of businesses believe software is a long-term investment, especially within estimating (31%), project management (30%), and asset management (30%).
"Our industry's evolution hinges on technology,” said Matt Swanson, co-owner and co-founder at Guardian Roofing. “Monitoring customer feedback in real-time is essential for any home improvement company trying to stay competitive in this market. Embracing such systems is crucial for staying ahead in the industry.”
In efforts to maximize revenue, many businesses plan to increase profits by evaluating and optimizing overhead costs (51%), upselling services (49%), establishing effective customer relationship management (33%), regularly reviewing pricing strategies (33%), and implementing technology solutions (29%). Additional strategies included creating efficient project management streams (19%), focusing on employee training and productivity (19%), strategic marketing (18%), and accurate cost estimation (18%).
To view the full findings and key takeaways, download ServiceTitan’s Exteriors Contractor Market Report here.
About the research
The survey was conducted on behalf of ServiceTitan by Thrive Analytics, an independent third-party research provider and a leading digital marketing research firm, polling more than 1,000 exterior service contractors representing a variety of geographical regions, business growth stages, and revenue levels. For the purposes of this survey, an “exterior business” is defined as roofing, gutters, siding, solar, windows, skylights, decks, doors, and insulation companies with more than $1M in sales revenue and primarily serving residential customers (70%+). This research is for informational purposes only and ServiceTitan provides no assurances (express or implied) with respect to the accuracy of the survey data.
About ServiceTitan
ServiceTitan is a cloud-based software platform built to power trades businesses. The company’s end-to-end solution gives contractors the tools they need to run and grow their business, manage their back office, and provide a stellar customer experience. By bringing an integrated SaaS platform to an industry historically underserved by technology, ServiceTitan is equipping tradespeople with the technology they need to keep the world running. ServiceTitan is backed by world-class investors including Battery Ventures, Bessemer Venture Partners, Coatue, CPP Investments, Dragoneer Investment Group, Durable Capital Partners LP, Generation Investment Management, ICONIQ Growth, Index Ventures, Sequoia Capital, Thoma Bravo, TPG, and T. Rowe Price.
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