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Setting the Right Goals for 2022

Jan. 19, 2022
Consider the impact of consumer behavior as you plan for growth into the next year.

By Steffney Jones

While many industries have experienced loss and stagnation over the last year, demand for contracting services has never been higher. The opportunity for growth seemed never-ending, but then came the labor shortage, shipping delays and inflation—all of which negatively impacted the ability to complete projects and in turn, the consumer experience.

Though these challenges will be with the industry for the foreseeable future, there is a chance to glean insights and apply them to the changing needs of the customer for home services businesses to grow.

As small businesses set their goals for the upcoming year, it’s critical to consider a few key questions: your definition of growth, how your tools are performing, and the way your business manages expectations.

Diving into these areas can help contractors set and measure 2022 efforts that accurately reflect the state of their businesses now, and the real opportunity for growth and expansion in the near future.

Question #1: How do you define growth?

Project managers love to talk about the “definition of done,” the idea that you shouldn't start something until you understand what that thing is supposed to look like when finished. The same proves true when establishing your plans for growth—you must first define where you would like to be at the end of each month, quarter, and ultimately, the year. And, just as important, does that growth hinge on certain factors, such as acquiring new customers, hiring more staff or even expanding your services?

To begin this process, you must first identify where your business is at and what success looks like at the next stage. The Harvard Business Journal breaks down growth into five stages: existence, survival, success, take-off, and resource maturity. For those in the existence or survival stages, success may be as simple as breaking even or growing referral business. Those in the success or take-off stages may be focused on delegating tasks or investing in marketing.

Once you’ve identified where your business is at, you must next consider where you want to be and how to get there. For example, let’s say you’re in the survival stage and need to bring in more customers. You may increase your digital marketing spend or provide a referral discount to past customers to drum up more business. Perhaps you adjust your business hours to be available to a new market.

Focusing only on the acquisition piece, however, can create additional problems. If you’re successful in attracting new business, are you set up to handle all those additional customers? Do you have enough staff and supplies?

If you’re lacking in these areas, your business may deliver a subpar experience that negatively affects customer loyalty and referrals. By not first reviewing whether your business can accommodate this growth, you risk damaging your business’ reputation and losing existing and future customers due to poor reviews. Consider that the average dissatisfied customer will share their experiences with 9 to 15 other people, and some will share with 20 or more. That’s a quick way to drop your business from survival back down to existence mode real fast.

Regardless of your stage, being realistic in your definition not only ensures you are set up to meet your goals but also highlights the areas you need to work on to get there. Seeing where your business is now and where you’ll want to be creates a path that can help you avoid misplacing efforts or misusing resources.

Question #2: Are your tools keeping up?

Work smarter, not harder—that’s the dream right? It doesn’t have to be a dream, but it does require a hard look at the tools and systems that may seem to be working fine. Oftentimes, we assume everything is working fine simply because “that’s the way it’s always been done.” When it comes to growth, relying on what’s always been done is an easy way to stagnate or even roll back progress.

Agility can only be achieved through flexibility—and this is how many home service businesses are scaling and winning more customers while others are showing minimal year-over-year growth results. Finding ways to streamline processes can mean more dollars reinvested back into the business and more profitability through gross margin expansion.

Consider your phone for a moment. How many hours a day do you spend answering calls and addressing the same questions from potential customers over and over again? Those are hours you could be spending closing business with qualified leads, completing projects, recruiting staff or any of the hundreds of other things you have on your plate. It’s crucial to evaluate where your efforts will have the greatest impact on your growth goals and to consider outsourcing the frequently asked questions and potential customer intake to a professional so that you can focus on what will move your business forward.

Identifying areas within the business that can be made more efficient may uncover potential long-term gain at the same time, which ultimately improves the overall health and sustainability of the business.

Question #3: How are you managing customer expectations?

The constraints posed by the labor shortage and supply chain delays will be with us well into this year and possibly the next. Therefore, to gain and retain customers, your business will need to carefully manage expectations.

Consider that half a million new businesses were started in January 2021 alone. Outside of flexibility, shifting your business to be customer-service-focused is the number one factor that distinguishes successful contractors from the competition moving into 2022.

An expectations management strategy can have a critical impact, particularly for an industry that relies on word-of-mouth referrals as a part of its go-to-market and growth strategy. At the core of expectations management is recognizing a customer’s need and being realistic about how you will meet that need while overcommunicating about the given restraints your business is experiencing.

Businesses that are transparent with customers at every stage increase their likelihood of earning goodwill that eases the burden on staff and potentially buys extra time on a project. Though customers may still come with their assumptions about what the experiences should be, over-communicating existing barriers can de-escalate moments of potential frustration. That responsiveness is crucial.

Looking forward to another year, contractors can’t assume what has been successful in the past will continue to work. Customer demands change, and how they move through the consideration phase also changes. Allowing room for agility and then pivoting throughout the year’s fluctuations is how home service businesses will find success next year.

Steffney Jones is the Partner Development Manager at Ruby.com where she develops and strengthens partnerships with their 13,000 small businesses and creates personalized marketing strategies, with a special focus on the home services industry.

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