Contractor customer retention is a big topic among professionals. The more clients you can keep, the more your residual revenue increases. Furthermore, new competitors emerge every year, stiffening the competition for existing and prospective customers.
In pretty much every region of the United States, the contractor market is congested. Competition is fierce as over 700,000 active contractors in the construction field alone! And it seems that new contracting companies are emerging every day.
One tactic that young companies employ (mainly because they have to) is discounted services. They often outbid more established companies to make a name for themselves and build up a client base.
Contractors Society of America provides some advice and tips to increase your contractor customer retention rates in the following post. Then, you won’t have to worry about any upstarts trying to horn in on your client base.
Invest in CRM Software
CRM stands for Customer Relationship Management. CRM software is self-explanatory: software designed to help you keep track of your customers and improve relations and customer service.
A big part of contractor customer retention is improving customer satisfaction, streamlining your services, and anticipating your customers’ needs. CRM software can be a tremendous help in all of those departments. You might also consider some of the best construction project management tools.
A customer profile is one of the best tools a good CRM software suite will have. It will automate gathering data and information on any customer you do business with into one digital space. So how would such a tool help? Let’s take a look:
Improving Customer Satisfaction
No one likes to have to explain themselves repeatedly to different sales reps. Having a consolidated customer profile with information gathered from different agents negates the need to ask redundant questions. In addition, it gets your customers the help they need faster.
Many CRM software suites can automate customer calls, customer outreach, and even marketing emails so you can spend your time on more important matters.
Anticipate Customer Needs
A CRM software suite will record all the services a customer needs. With this information, you can better predict what type of services they will need or want next and reach out to them about it before they have to ask.
Manage Online Reputation
Your company’s online reputation has mostly to do with what people are saying about it online. However, it also will play a big part in your customer retention rate. Review sites are one of the largest forums that people use to sound off about companies they’ve hired.
Sites like Yelp, Google Business Profile, Angi, and Houzz are frequently visited by customers looking to evaluate their current or future contractors. Unfortunately, a bad experience may prompt clients to confirm their suspicions about your service by looking for similar complaints.
However, being present on these sites isn’t enough if you want to increase your customer retention rates. Consider the following statistic: 52% of consumers expect companies to reply to their online reviews.
So, as much as possible, make sure you are responding to the reviews your company gets across all platforms. Responses show that you care about the customer’s experience, and it builds trust and brand loyalty.
General Review Platforms
Platforms like Google Business Profile and Yelp are essential for all business types. While contractors benefit just as much as any other industry from favorable Google reviews, the platform also influences lawyers, doctors, and any other business you can consider.
Niche Review Platforms
Platforms like Angi, Houzz, and HomeAdvisor are specific to the contractor industry. Therefore, feedback on these websites/apps is critical for contractor businesses. These sites are not more important than Google and Yelp, but they are vital to your reputation.
The same goes for social media. If someone takes the time to retweet you, tag you, or comment on your posts, be sure to shoot back with a response. Acknowledgment drives engagement, and people are more likely to hire a company that shows activity online.
Utilize Email Marketing
We know email marketing can seem a bit spammy at times. Still, the fact is that it is very effective for customer retention. Keeping in touch with existing and past clients can be a great way to remind them of your service – especially if they had a good experience with you.
For the most part, people won’t want to take the time to research and communicate with a new contracting company. Instead, nine times out of 10, they will go back to one they have a relationship with, assuming that the first project went well.
Email marketing messages are a great way to remind your customers of your service and their relationship with your company. The numbers don’t lie, either. According to a survey, 37% of respondents reported that email marketing messages were effective for customer retention.
There are some things to keep in mind if you want to launch a successful email marketing campaign, though:
You never want to inundate your customers’ inboxes with marketing messages. Most contracting companies don’t need to send multiple emails a week. Try sending out a message every month instead.
Having the recipient’s name in the subject line, referring to a service they hired you for, or reminding them of maintenance will help increase open rates. People’s email inboxes are filled with spam, so you have to give them a reason not to skip over your message.
Tell your email list about any special deals on services you offer. You might also run seasonal promotions for holidays, summer, winter, etc. The key is sparking engagement from your email list. Monitor your metrics to see which promotions your customers respond to most favorably.
10X Customer Retention With These Methods
So how can any contractor compete with lower prices? Instead of finding new customers who are willing to pay more for experienced contractors, work on retaining your existing customers. Increasing retention is generally more cost-effective than having to churn and burn.
Contractor customer retention may be your best chance to stay competitive in your market, even with newer companies offering their services at lower rates than yours.
Contractor customer retention is one of those concepts that are easier talked about than executed. However, it is far from impossible, and it will be much cheaper for you than to go out and try to rustle up new leads and customers.
The strategies mentioned above, including CRM investment, reputation management, and email marketing, contribute to a higher retention rate. Retaining customers reduces stress on your budget and allows you to maintain a more sustainable business model in 2023.