Technology Enabled Businesses In Home Services - How Tech Can Help You Grow

Post date :

Oct 26, 2023

With a growing number of technologies to help home services businesses. Let's dive into the landscape and look at how tech enabled businesses can create meaningful competitive advantages. 

Benefits of incorporating Tech in your Services Business.

Top Line Growth: There are a ton of tools to help you find and reach out to leads. Some services like Thumbtack and can create lead flows directly (at a cost) or you can build your own outbound process with things like Hubspot, Outreach and other consumer data lists.  Efficient email and ad campaigns can help to drive top line revenue and help you grow. 

Lower Operating Costs: Field management tools like back office software will allow you to improve route density and reduce downtime. Anything you can do to maximize the revenue driving hours of your team will allow you to improve your overall cost of services and drive more of your revenue down to the bottom line. Look at back office tools and customer relationship management (CRM) systems to help you manage your day to day. 

Predictable Revenue Models: Once you get to a decent size and scale, you can start to analyze your business. Where are your best customers coming from, what do they look like? What services are most profitable and where are your opportunities for upsell and cross selling your clients? Looking at tools that allow you to analyze your data and make better customer decisions will allow you to reduce poor engagements and increase the number of customers that are driving the bulk of your profitability. There are business intelligence tools to plug into your CRM or check out GlassHouses’ out of the box tools to get customer intelligence quickly and easily. 

How much should you be spending?

We have spoken with service providers to put together some benchmarks on technology spending. This spend will vary depending on your overall business size, competitive landscape and the specific type of services you provide. Here are some benchmarks to look at base on your annual revenue range. 

Under 1M/year: This is for companies where the owner is often still the ‘operator’ of the business, performing services themselves. Tech spends here are often best routed to websites, lead flow engines and anything that automates payments and billing. Route management, scheduling and other ‘team’ management tools might not make sense if your team is very small. Think about spending 1-3% of your annual revenue on these services as a baseline and you may find yourself up to 5-7% if you are spending on tools to automate marketing and customer acquisition. 

1-10M/year: At this revenue range you generally start to see teams running multiple routes without direct owner involvement. It’s probably time to look at your back office operations tools and consider how you can ensure your teams are optimized on where they are going and who’s working where. If you have a centralized dispatch or office, how are they seeing into the field to support your techs? Most tech enabled providers are going to be in the 2-4% of revenue spend in this range. 

10M+/year: This is an ‘unlimited’ size but at 10M+ you are getting into multiple offices. Having systems that truly ‘scale’ to multiple locations will require that you are looking at some of the bigger tech vendors and tools on the market. At 2% of your annual revenue you should have a healthy budget to invest in tools for your team. 

Where do you start?

With so many tools it can feel like it's impossible to know where to start. We recommend that you take a ‘in stages’ approach to avoid overdoing it too quickly. 

Here is an example of a tech strategy where each phase has a purpose. Each of these stages can be matched to a timeframe and revenue target as well. 

  • Website and customer facing tools to put your name and presence into the market

  • Billing and payment tools to keep from spending too much time on administrative tasks

  • Lead flow tools and marketing automation to grow your customer base

  • Customer support and call/email tools to improve customer communication

  • Scheduling/field management platforms to keep up with a distributed field team

  • ERP and Analytics tools that help you understand your business

Risks and Tips.

Don’t say yes to everything without sitting down and making a plan

How is tech helping you to; grow top line revenue, become more efficient, or create a competitive advantage in your market? If it's not hitting these marks, what is its true value?

Set a tech budget b/c if you aren’t budgeting for this you may end up way over/under a reasonable spend figure. 

How do things integrate and talk to one another - be careful to buy too many tools that can’t communicate with one another b/c it will become an administrative headache. 

Invest in training your teams on how/why to use these tools. 

Ask for feedback from your team. “What could we do to help you in your day to day role?”

Technology enabled businesses can create competitive advantages as they grow. Think about how you are using technology to improve your business and increase your profits.