How was your 2016? If it was like most contractors I know in our industry, your revenue was slightly up, which is a welcome change from the past few years.
But what about your profit? This often ignored piece of the performance puzzle is the figure that should mean the most to you. It means you operated your business in such a wise way that you now get to invest those earnings in the future - the future of your company, your community and your family.
There are plenty of ways to get there. One of the most common methods is cutting costs. But that method often has a limited lifespan. As you continue to hack away at the services and quality of products that you offer your customers, your business is eventually left with few customers and a bad reputation.
Instead, implementing the following four strategies will improve your services and your reputation to achieve long-term success and consistently strong profits to grow your contractor business.
You've Got to Know Your Numbers to Grow Your Contracting Business
First and foremost, to measure your success, you must know your numbers to grow your contractor business.
You need to be able to answer questions like...
- How many leads are coming in?
- How many appointments developed from those leads?
- Which pieces of marketing are working best for you?
- Which of your salespeople has the strongest closing ratio?
- Which segment of your customers are the easiest to close?
- Which of your products are performing the best?
If you cannot answer any of these questions, then you do not have the data you need to determine where your company is struggling and where you are succeeding.
The greatest “Wealthy Contractors” I know can answer all of the questions above instantly. By constantly measuring their company’s performance, they are able to quickly address any declines before they become major issues and capitalize on any high-performing areas.
The key to this is having a CRM (Customer Relationship Management) System that will do most of this tracking for you. If you don’t have one, you need to get one TODAY.
By knowing your numbers, you’ll have a strong foundation to help you get more leads and grow your home improvement business.
You've Got to Raise Your Prices to Grow Your Contractor Business
It seems obvious, but raising your prices is one of the quickest ways to boost your profits. While it’s so simple, many contractors are terribly frightened to do this.
So to help you overcome this fear, consider that there will ALWAYS be someone who will do the same job as you for less. There is some desperate contractor who will take a loss because they need the cash, or a contractor who will skimp on labor or materials. But as you know, those are not sustainable strategies.
The one way you can stand out is by offering more value to your customer than any of your competitors. And you may get a few less jobs than you’re used to. But doesn’t working less and getting paid more sound good to you?
You've Got to Deliver More Value to Generate More Referrals for Your Contacting Business
So to build more value into your services, you must first examine your customer experience from beginning to end - from the very first contact made before the sale to long after the project is completed.
Survey your customers or ask a friend to play customer and get their feedback - which parts of your customer experience are impressive? Which are disappointing? Which need a slight tune-up? Which need to change dramatically?
Then, once you have these detailed evaluations of your current process, you can take action to make every step of your customer experience a “Wow” moment - one that completely knocks their socks off.
These “Wow” moments are essential, not only because they make your higher prices worth it to your customers, but because they encourage word of mouth recommendations (the most effective and cost-efficient form of advertising), positive online reviews (helping to you close more leads) and referrals (the easiest leads to close).
So you may find out that you need to have a new sales presentation, or better communication during the installation process, a system for following up after the sale or a more professional sales team. This will result in a little bit of work, but it opens up the opportunity to truly impress your customers and will pay off in dividends for years to come.
You've Got to Invest in Your Team to Grow Your Contracting Business
As mentioned above, maybe it’s your people who are preventing you from creating a memorable customer experience. More than anything else, it’s your team that differentiates you from your competition. No other business in your industry has the same team as you - it’s impossible. So, it’s essential that you invest in them (and in yourself).
You may find that your staff needs training in a particular area or the right materials to do their job. For instance, your receptionist may need some training on how to sell callers on the value of an in-home estimate, or maybe your installation crew would feel more confident with new uniforms or training on a particular product.
Whatever the case, making these tweaks so that your team can be at its best will radically change the way you present yourself to the marketplace.
But don’t forget about the most important part of your team - yourself. As the leader of your company, your entire team relies on you for guidance and for steering the direction of your company.
So start blocking out time in your week to work ON your business rather than IN it. Read a book about how to be a better leader or how to better manage your business. And attend events where you can learn from peers and industry experts on what’s working for THEM (and you may actually be able to return the favor by sharing some of your own successes).
One of these events is Accelerate LIVE 2017 - being held in Philadelphia February 22. There’s still time to save your seat at a low introductory price so you can find out the latest success strategies from home improvement sales and marketing experts - just click here now.
By investing in yourself and your people, you will see a dramatic payoff through higher closing ratios and more satisfied customers who become your company’s fans and advocates who will in turn provide more leads for your contracting business.
So as you start 2017, remember to focus on PROFITS rather than just revenue. By taking these four steps, you’ll be able to take your business to new levels not only this year, but for years to come.