Home Services Needs to “Nail” Tech Innovation
The home services industry in the US was $400B in 2016 (some estimate it’s $800B), that’s an increase of 22% since 2011 and rising. The home service big box retailers only make up 47.2% of that market share leaving the large majority up to local and independents.
Companies in the Home Services industry invest hundreds of millions of dollars in marketing to get jobs. For most small companies, it is a significant overhead cost for them or usually the #1 reason they cannot increase their revenue. Given it’s a numbers game, business owners and retailers try to get as many estimates as possible. It’s proven that 50% of the time, consumers go with the first company to get out the job estimate. How can companies big and small get to the consumer faster and more cost effective like never before? We’re going to tell you.
First, let’s talk about the spoiled estimation costs for a company. We all know that a company can’t expect to win every bid or estimate. So, every estimate they don’t get is a sunk cost for them, bearing no fruit. Consumer behaviors and expectations have changed and if the home services companies do not proactively adapt to new technologies, they will be left in the dust.
As more millennials, Gen-X/Y are buying homes and becoming the “paying customer”, the old-school industry of “pen and paper” estimates and in person appointments must change. Time is money, from the consumer side and the business side.
Consumers know they can go on Angie’s List, read reviews, call 3 companies and schedule them to come to their home to estimate a job. However, this costs the consumer time and money to take off work and wait around for contractors to show up. Each company coming out to “place the bid” is costing them $60-150 to show up to make the bid with no guarantees to get the business. This old model of thinking does not benefit the consumer or the home services company. So, what gives? How do we make this benefit both parties so the consumer doesn’t waste time and the business doesn’t waste time or money?
Amazon is so enamored with this almost $400B market. They have now launched Amazon Professional Services with 700 types of services, to provide online estimates and booking for contractors locally. While this is a great marketing arm for local contractors, be prepared to give up 15-20% of your job.
And Google has invested over $100 million in Thumbtack but has plans to enter the market as well. This highly fragmented market is ripe for technology and everyone is putting money into trying to be the next Uber of home services. But is that the answer? Or is the answer taking the already established companies and having them embrace innovation to appeal to the consumers?
No, we’ve talked about the estimation side, what about the servicing side, dispatching for repairs and service? We have independents doing this, Big Box retailers like Home Depot, Lowes and Sears, large franchise groups like Dwyer Group which owns a conglomerate of brands like Mr. Rooter, Molly Maids, Mr. Electric and Mr. Handyman. They are all trying to get a piece of the large service and repair billions.
On the service side, organizations try to reduce the amount of truck rolls because of the expense of $55 to $100 per truck roll. In both cases, companies are trying to control costs and maximize revenue. Every truck roll that does not complete their project is a wasted and sunken cost. A dispatch could be spoiled for several reasons: wrong instructions, wrong or no parts, unqualified technicians or highly complex jobs.
What if you could reduce the on-site estimation and dispatch spoilage by 20-30%, what would that save you?
What if you could get 20-30% more estimates, how much would that increase your revenue?
It will be different for every company, but one thing for certain is that it will definitely show up as a higher profit on your income statement. So, what is the answer? The concept is quite simple and something you’ve probably used with your family or kids before. It’s the business optimization of mobile video on your cell phone. For the first time, businesses will be able to conduct video estimates through a desktop dashboard while consumers connect with their mobile devices. The estimation resources can provide twice the estimates at a fraction of the cost. Home service professionals now can grow their markets, locations and revenue from a centralized location, while not increasing their man power.
Not only is this a huge win for estimation and dispatch, it’s a big win for the consumer as well. For a consumer, time is money, we expect everything at our fingertips with an “Uber like mentality”. The consumer gets exactly what they want, INSTANT GRATIFICATION and it eliminate the frustration of late appointments or problematic truck rolls. This creates increased customer service and referrals for additional business.
Let’s look at some of the top market sectors in home services that can benefit the most:
- Flooring – The flooring industry’s has continued to grow each year, in 2014 sales were over $20B, of which carpet counted for 50%. The flooring buyers have become more sophisticated on knowing what products they want, what colors, brands etc. Flooring companies can now have virtual showroom while tech-savy consumers connect from their home.
- Plumbing/HVAC– The plumbing, heating and air conditioning sector accounted for over $174B in 2014 alone, employing over 300,000 professionals. The ability for new installs, to show the home services company, in a new install situation, what you currently have and discuss what is needed. A large percentage of the industry revenue is from servicing and repairs. A plumbing professional cannot do this on a first call as they don’t know what they need until they arrive. Using mobile video technology before dispatching a truck allows you to send the right professional and parts the first time. The customer and the home services company save both time and money, lowering costs for everyone.
- Janitorial/Cleaning– The cleaning service industry accounted for $60B in revenue in 2016 at a 4.3% growth rate. One of a cleaning companies’ biggest headache is estimation, which is primarily done by square footage. However, you are unable to see over a phone call, how clean and/or messy one’s home currently is. The ability to do a virtual walk through allows for accurate and faster estimation with the right staffing and products.
- Moving and Storage: The moving and storage business generates over $15B in revenue. A moving companies’ ability to grow is based on manual processes of move checklists estimating room by room. This process accounts for a time consuming and expensive process for both the consumer and the moving estimators. A walk through typically is needed to see sizing of items and contents. In addition, there are shipping websites like www.uship.com where you have trucking companies bidding on items to fill a truck. The ability for a professional to utilize video in real time to see contents and size minimizes back and forth.
- Appliance Manufacturers – Whether it’s a local appliance company, Sears, Lowes or Home Depot, they all service major appliances. The first order of business is to typically verify if the appliance is under a manufacturer or store warranty. Appliance companies can use HD video to read a 6-point service tag with video chat technology from One Touch Brands. Without rolling a service truck, the professional can determine warranty, potential parts and provide estimates. This establishes better estimates, timeframes from waiting on parts and reduces the costs dramatically.
The home services industry is in great need of technology innovation to keep up with ever-changing expectations of consumers. Consumers’ measure home service companies across all industries expecting a proactive customer experience and buying process. One Touch Brands video chat technology helps save money, increase revenue with a competitive advantage in a crowded industry. Home services companies can implement the technology in weeks, not months or years. For more on video chat technology, visit www.onetouchbrands.com @onetouchbrands