As a Sales and Business Coach, I’ve been helping residential Plumbing, HVAC, and Electrical companies build their service business for the past few years.
Prior to that, I worked for a multi-million dollar Plumbing and HVAC business.
In my time within this industry, I’ve had the honor of working with hundreds of the industry’s top companies all across the United States and I’ve learned a lot.
Here are four ways I’ve learned to build your service business!
4 Ways To Build Your Service Business
1. Increase Your Service Conversion Rate
Simply put, this means serving a higher overall percentage of your opportunities or “potential clients.” It means having a higher percentage of “paid service customers” than non-paying customers.
For example, if you go on 1,000 service calls per year and 700 of those become “paid service customers,” then your service conversion rate would be 70%. (700/1000 x 100, Represented as a %)
Increasing your average conversion rate would naturally generate a higher total volume of paid customers and thus a higher total volume of revenue as well.
For example, if you were to focus on raising your conversion rate from 70% to 80% in the example above, the company would have generated another 100 paying customers in that year.
HOW?
Sales Coaching is a great start. There are very specific behaviors and habits which increase overall conversion rate in the field and applying that knowledge pays dividends.
2. Increase Your Average Invoice / Sale
Simply put, this means earning more money on average from each paying customer that you are already working with.
Continuing from the example above, if you were to convert 70% of 1,000 potential customers per year you would have 700 total paid customers.
If your total gross revenue for that same year was $350,000, your average Invoice / Sale would be $350,000 / 700 total customers = $500 per customer.
If you were able to raise your conversion percentage to 80% you would have another 100 customers in the same year. Those 100 extra customers at an average sale of $500 each would represent another $50,000 in annual revenue for your business.
(1,000 x .80 = 800, 800 – 700 = 100, 100 x $500 = $50,000)
Now, if you were able to increase your average Invoice / Sale by even just 10% you would generate $50 more per customer than before. ($500 x .10 = $50)
With a 70% conversion rate, the increase in your average sale would generate a total of $35,000 more revenue each year.
With an 80% conversion rate, the increase in your average invoice would generate a total of $40,000 more revenue each year.
Total revenue with 70% Conversion on 1,000 opportunities and a $500 Average: $350,000
Total revenue with 80% Conversion on 1,000 opportunities and a $500 Average: $400,000
Total revenue with 80% Conversion on 1,000 opportunities and a $550 Average: $440,000
An increase in your Conversion Rate and your Average Invoice in this example would equate to a 25.7% overall increase for your business!
($440,000 – $350,000 = $90,000, $90,000 / $350,000 x 100 = 25.7 represented as a %)
HOW?
Again, Sales Coaching is a great start.
An increase in your Average Invoice / Sale is a result of learning how to sell a higher number of tasks or products to each customer and learning how to sell the value of higher dollar tasks or products to each customer.
3. Increase Your Lead Conversion
Before an individual becomes a customer, they are first classified as a “lead.”
A “lead” is an individual who has expressed interest in your product or service.
Individuals most commonly express interest in your products or services by filling out an online form, sending you an email, a text message, or calling you on the phone. When this occurs, a “lead” is born.
From that point, the lead must be converted from a “lead” into an “opportunity.”
An opportunity is an individual who has been turned over to a member of your service team and has scheduled an appointment for service.
For example, you may receive 10 phone calls from leads in a given day. Of those 10 leads, how many were scheduled appointments with a member of your service team?
If 8 leads were scheduled appointments, you would have a lead conversion rate of 80%.
Opportunities are then converted into a paid customer through a sales process as mentioned above in item 1.
HOW?
There are a number of ways in which you could increase your lead conversion percentage.
You could purchase a higher converting phone script, change your answering service provider, or by investing in training and coaching for your staff.
4. Increase Your Lead Count
This means increasing your marketing and advertising efforts to generate more leads.
Leads can come from a number of places including but not limited to:
- Referrals
- Digital Marketing and Advertising
- Lead generating sites like HomeAdvisor
- Home Warranty Companies
- Print and Signage
More marketing and advertising generally creates more leads. A higher conversion rate on those leads means more opportunities, or scheduled service calls.
Following the examples from above, here is an example of what a 10% increase on the total number of opportunities would do for your business:
Total revenue with 70% Conversion on 1,100 opportunities and a $500 Average: $385,000
Total revenue with 80% Conversion on 1,100 opportunities and a $500 Average: $440,000
Total revenue with 80% Conversion on 1,100 opportunities and a $550 Average: $484,000
In this example, a small 10% increase in your Lead Conversion, Opportunity Conversion, and your Average Invoice would equate to a 38.3% overall increase for your business!
($484,000 – $350,000 = $134,000, $134,000 / $350,000 x 100 = 38.3 represented as a %)
From here, increasing the total number of leads coming in through more marketing and advertising would result in even more exponential gains.
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About The Author:
Patrick is a Husband, a Father, a Modern Entrepreneur, the Founder of BizPAL.org, and the Creator of BizPAL’s Automated Recruiting Program.
He holds certifications in Social Media Marketing, Facebook Advertising, Inbound Marketing, Business Automation, and more!
Fun Fact:
Patrick was born and raised in a predominantly Amish community in Northern Indiana.
Got questions about the Amish? Ask Patrick!
Patrick is the son of a Career Tradesman and is extremely passionate about helping the Contracting industry grow and advance.
He has over 10+ years of experience in Customer Service, B2C Sales, Social Media Marketing, Sales Training and Coaching, Business Consulting, etc.
He has spent the past 7+ years working with Service Contractors from coast to coast to increase their Sales, boost their Profits, increase Customer Satisfaction and Brand Loyalty, and improve their Operational efficiency by Building Creative Solutions and Implementing Innovative Ideas!
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