ServiceTitan

Report finds resilient businesses are adopting technology, outsourcing, and focusing on customer relationships

• 29% of contractors plan to invest in technology this year to increase revenue, customer retention, and customer acquisition.
• 27% of contractors have outsourced services as a solution to streamline their processes, scale, and grow revenue
• Repeat customers accounted for 39% of revenue and 71% of business volume for contractors this year

ServiceTitan, a software platform built to power the trades, has released its first Residential Services Report, providing insight into the challenges and opportunities facing the industry, market outlook, business strategies, and emerging trends. These results highlight survey responses from more than 1,000 residential service contractors around the U.S.

“Residential contractors provide essential services that keep our world running, and that’s not going to change anytime soon”, said Vahe Kuzoyan, president and co-founder at ServiceTitan. “These contractors remain resilient and innovative amidst a year of diverse outcomes, using new strategies and purpose-built technology to allow them to focus on operational excellence and building lasting relationships with customers.”

Tempered sentiments reflect market uncertainty 

Economic uncertainty, labor shortages, and reduced access to working capital have created a strain on businesses across the US, and in response, residential contractors have a mixed outlook for the current year. According to the survey, over half (67%) of contractors have neutral expectations for the future, 18% are optimistic, and 14% feel pessimistic.

Strategies to combat supply chain disruption

The tailwind effects of COVID-19, increased natural disasters across the nation, and global warehouse capacity issues are resulting in extended supply chain disruption. Contractors reported difficulty obtaining supplier parts (64%), raw materials (47%), specialty materials (44%), equipment (23%), vehicles (17%), and sustainable “green” materials (14%). Supplier diversification can increase supply chain resilience. 60% of contractors purchase directly from a supply house, 23% directly from the manufacturer, and 17% directly from the vendor.

Outsourcing is one effective strategy for contractors looking to increase stability and growth. Approximately one-third of businesses (27%) have leveraged outsourcing as a solution to streamline their processes. The three most common areas for outsourcing included call centers (76%), customer service (49%), and digital advertising/SEO (32%). Outsourcing allows businesses to centralize their operations and create a more consistent, reliable customer experience while scaling.

Developing trusted, deep customer relationships 

Customer relationships, both existing and new, play a major role in business success. Repeat customers accounted for 39% of contractors’ annual revenue, and satisfied customers are also more likely to offer referrals or recommendations, which can help generate new leads. Respondents reported 71% of business volume in the last year came from word-of-mouth referrals. Growing revenue (56%) as well as customer retention (50%) and customer acquisition (46%) were all top priorities for residential contractors in 2023.

Attracting and retaining high-performing technicians and employees is also top-of-mind, as competition for talent remains fierce amidst a skilled labor shortage. In response, businesses are being very intentional with recruitment and retention practices. Over one-third of contractors surveyed  (38%) will increase technician salaries between 4% or more as a strategy to attract and keep top talent, while 39% of respondents stated that they plan to increase technician pay by 1-3%.

Continued investment in technology presents new benefits across the business 

Through emerging technologies like automation and AI, contractors can offload much of their administrative work and focus their time on boosting productivity, optimizing resources, and doing what they do best: serving customers and building lasting relationships in their communities. Survey results indicate that contractors are leveraging technology primarily for business management (63%), field service management (48%), accounting (42%), enterprise resource planning (38%), payroll (33%), and human resources (33%).

“AI is changing the way we work in the trades,” said Jason Brady, Owner and CEO at Above & Beyond Heating & Cooling. “We’re going to be able to stop focusing on the insignificant things, and really focus on the things that matter to the business. New technology isn’t always perfect, but it’s helping contractors tackle some of the menial tasks of the job so they can focus more on servicing customers.”

Technology is not only freeing up resources, but also improving worker satisfaction, enhancing safety, and creating more attractive career paths and opportunities for professional development. With technology as a key tool to achieve business goals, 29% of residential contracting businesses plan to invest in technology this year to increase revenue (56%), customer retention (50%), and new customer acquisition (46%).

To view the full findings and key takeaways, download ServiceTitan’s Residential Service 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 residential service contractors representing a variety of geographical regions, business growth stages, and revenue levels. For the purposes of this survey, a “residential service contractor” is defined as any business generating 60% or more of their revenue from residential services. This research is for informational purposes only and ServiceTitan provides no assurances (express or implied) with respect to the accuracy of the survey data.

New report reveals that Commercial Service providers remain resilient and agile in business operations despite recent revenue challenges

• 66% of contractors consider digital transformation important to their operations
• 24% of businesses have incorporated AI technology, with 80% of those businesses seeing performance improvement from automation
• In 2022, repeat customers generated the highest volume of work (69%) and revenue (44%) for contractors
• Only 30% of contractors saw an increase in revenue in 2022, and only 37% saw an increase in profits

ServiceTitan, a software platform built to power the trades, today released its first Commercial Service Report, providing insight into the challenges and opportunities facing the Commercial Services industry, as well as the strategies that businesses are employing by leveraging digital tools to stay competitive. These results highlight survey responses from more than 1,000 Commercial Service contractors around the U.S.

“Instead of looking to multiple disjointed software solutions, Commercial providers need tools that can adapt and grow with their needs,” said Vahe Kuzoyan, president and co-founder at ServiceTitan. “By embracing digital transformation, Commercial businesses can stay competitive by leveraging software to become more efficient and reduce costs, increase revenue, and provide a meaningfully better customer experience. As technology plays a larger role in business management, finding the right solution is more important than ever.”

Weathering the Storm from 2022

Macroeconomic events in 2022 created a challenging year for the industry, leaving Commercial Service contractors with a mixed outlook for 2023. According to the survey, 70% of contractors did not see an increase in revenue in 2022 — 31% of respondents reported no revenue change and 39% suffered a decrease in their revenue. With only 37% of contractors seeing an increase in margins, it’s no surprise there’s some uncertainty around expectations for 2023. 56% have neutral expectations for business in 2023, while 22% feel positive and 22% have negative views.

Commercial contractors cited a variety of risks impacting the sector; from economic recession (59%) and labor shortages (52%), to growing competition (18%) and lagging digital transformation (18%). Persistent supply chain issues still present challenges in securing materials, with 65% of respondents saying lead times for equipment have increased, and 52% reporting that material lead times for some items have increased anywhere from one week to more than two months. In terms of costs, most contractors (66%) stated that material prices have stabilized or decreased, while pricing for equipment increased (73%). As the delay in the “return to office” continues to reduce building maintenance needs, 53% of contractors have experienced an increase in cancellations or holds for their service agreements.

Focusing business goals around the customer

Even with new and continued challenges for the sector, contractors remain resilient by focusing activities on top revenue drivers like maintaining their existing customer base. The survey found that repeat customers generated the highest volume of work (69%) and revenue (44%) for Commercial contractors during this economic downturn, versus other ways of finding new customers like marketing and SEO or facilities and property management solutions. In response to this trend, owners are focusing business goals on customer retention (49%) and revenue growth (46%), whilst also putting emphasis on increasing margins (38%) and modernizing the customer experience (34%).

AI presents an opportunity for growth

The industry continues to explore artificial intelligence (AI) as a solution to streamline operations, maximize profit, and enhance the customer experience by providing time-saving tools that boost human talent. Early adopters of AI will have a competitive advantage, helping business leaders make better decisions based on AI predictions. 24% of businesses surveyed have already incorporated AI into their processes, with 80% of those businesses experiencing performance improvements from automation. Respondents see AI having an impact on a variety of Commercial use cases such as call booking (40%), invoicing (38%), dispatching (32%), and customer experience (27%).

“Finding an all-in-one software solution has eased the burden of tedious office tasks, and allowed us to focus more on our customers and business growth,” said Gary Cosmer, Partner, President & CEO of Lovett Services, a Commercial Services provider in Portland, Oregon. “For us, ServiceTitan continues to be the best solution on the market with tools like Titan Intelligence, which uses AI to deliver valuable data-driven insights and maximize efficiencies. We went from doing $16 million in revenue in 2021, to just under $20 million in 2022, and now are on track for $30 million in 2023.”

Technology is a vital tool to stay ahead of a rapidly evolving economy and competitive landscape, and the majority of contractors surveyed (66%) see digital transformation as a critical component of their operations. However, many of the businesses surveyed (59%) use more than four distinct software solutions to manage their operations, which could contribute to application overload or redundant software. This may be the reason why 16% of contractors surveyed still hesitate to adopt any technology whatsoever.

To view the full findings and key takeaways, download ServiceTitan’s Commercial Service 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 Commercial Service contractors representing a variety of geographical regions, business growth stages, and revenue levels. For the purposes of this survey, a “commercial service contractor” is defined as any business generating 75% or more of their revenue from commercial services. This research is for informational purposes only and ServiceTitan provides no assurances (express or implied) with respect to the accuracy of the survey data.

ServiceTitan joins the effort to slow the spread of COVID-19 by providing safety masks to contractors and Southern California hospitals

 ServiceTitan will donate 100,000 masks to hospitals and essential trade businesses as part of the global effort to slow the spread of COVID-19.

The company is donating 30,000 much-needed KN95 masks to hospitals in the Los Angeles area, including Glendale Memorial, Glendale Adventist, Mission Community Hospital and Centinela Hospital Medical Center.

ServiceTitan also recently made 70,000 surgical masks available to plumbers, electricians, HVAC technicians, and residential and commercial service professionals who continue to provide essential services to the public during the pandemic.

“This is a major contribution to the local fight against COVID-19,” said mayor of Los Angeles, Eric Garcetti. “ServiceTitan’s outreach to both health professionals and workers who are performing other essential services demonstrates their commitment to the community, to the industry they serve and to their public.”

ServiceTitan reached out to their community to find men and women in the trades who are in need of personal protective equipment (PPE) gear, and the masks have already begun shipping out to those in need. With over 70,000 masks the company has been able to help thousands of tradespeople and their communities stay safe.

“We understand that our mission to change lives starts in our own community in Southern California where we’re headquartered,” said Ara Mahdessian, CEO and co-founder of ServiceTitan. “Donating these masks is the most effective way we can do our part in this ongoing effort. We also wanted to address the particular challenges that the trades community is facing in this crisis. Technicians who are entering homes and businesses to provide essential services need assurance that they’re not putting their health, or the health of their customers, at risk. These masks will provide an important level of protection that will empower them and enhance their performance.”

The four hospitals recently received their masks, which have been made available to medical staff who are caring for COVID-19 patients. “The safety of our patients and our health care team is our top priority. Part of keeping everyone safe is ensuring we maintain a sufficient supply of PPE, including masks, gloves and face shields,” said Jill Welton, Glendale Memorial Hospital’s president. “ServiceTitan’s generous contribution to our hospital is appreciated and will help us keep our staff and community safe.”

The company’s mask donation is in line with its #TradesShowUp social media campaign — an effort aimed at highlighting the work home and commercial service professionals continue to do in the face of a public health crisis. Companies and individual professionals are encouraged to use the hashtag while sharing content that features how they’re staying safe and serving customers during COVID-19.