ServiceTitan releases first Residential Services Report

ServiceTitan released its first Residential Services Report, providing insight into the challenges and opportunities facing the industry, market outlook, business strategies and emerging trends.

Based in Glendale, Calif., ServiceTitan provides tailored software programs for several home services fields, including FieldRoutes for pest management professionals and Aspire for landscaping professionals.

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,” Vahe Kuzoyan, president and co-founder at ServiceTitan, said in the news release. “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.”

Economic uncertainty, labor shortages, and reduced access to working capital have created a strain on businesses across the U.S., and in response, residential contractors have a mixed outlook for the current year. According to the survey, over half (67 percent) of contractors have neutral expectations for the future, 18 percent are optimistic and 14 percent 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 percent), raw materials (47 percent), specialty materials (44 percent), equipment (23 percent), vehicles (17 percent), and sustainable “green” materials (14 percent). Supplier diversification can increase supply chain resilience. Sixty percent of contractors purchase directly from a supply house, 23 percent directly from the manufacturer, and 17 percent directly from the vendor.

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

Developing trusted, deep customer relationships

Repeat customers accounted for 39 percent 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 percent of business volume in the last year came from word-of-mouth referrals. Growing revenue (56 percent) as well as customer retention (50 percent) and customer acquisition (46 percent) 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 percent) will increase technician salaries between 4 percent or more as a strategy to attract and keep top talent, while 39 percent of respondents stated that they plan to increase technician pay between 1 percent and 3 percent.

Continued investment in technology presents new benefits across the business

Through emerging technologies like automation and artificial intelligence (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 percent), field service management (48 percent), accounting (42 percent), enterprise resource planning (38 percent), payroll (33 percent), and human resources (33 percent).

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 percent of residential contracting businesses plan to invest in technology this year to increase revenue (56 percent), customer retention (50 percent), and new customer acquisition (46 percent).

To view the full findings and key takeaways, download ServiceTitan’s Residential Service Report here.