Last year, I predicted three things that all came true for residential home service companies.
- Customers will be more cautious.
- Replacement opportunities will not change.
- Customers will be more price-sensitive.
We saw customers looking for repair solutions over replacement more often. Buyers were more inclined to leave the repair to the bitter end, sometimes to their own detriment.
We also saw many customers look to DIY and handymen solutions as many residential home service companies struggled to shift to a repair mindset.
We saw finance options used more often, more shopping around, and more customers trying to squeeze out every last drop from their home's equipment.
In 2024, we are walking into one of the toughest years in your company's history.
With household debt DOUBLE that of the 2009 housing crisis, even people with good credit will struggle to get approved on finance terms this coming year as they run out of runway.
With inflation persisting, people simply don’t have any more money and are not earning enough to catch up with the cost of living.
And a looming election year always causes uncertainty, lowering consumer confidence.
Companies who’ve not invested in a strong mass media brand story to build and grow trust, will face a tumultuous year of lead generation.
If you're thinking of cutting your marketing budget in 2024, be sure to cut your revenue expectations in league with that decision.
For those companies who haven't worked on their efficiencies and productivity, will face razor-thin margins or simply fail to close the sale.
And for those companies who haven't shifted to a repair-first mindset, will face the inevitability of lower replacement conversions and, thus, revenues.
Now, this doesn't mean that you won't have replacement opportunities. It just means that chasing replacement opportunities in your advertising is going to have you fishing from a small pool with small fish.
2024 Action Steps: Slow down your sales process and love the customers you are with.
Don't try to smash your database too heavily. Be a farmer, not a miner.
Look for opportunities to buy mass media. As your competitors retract, there will be deals to be had in speaking to the masses in a less noisy market.
Build trust BEFORE they need you, and win the game before the game has even started in Google search results.
You don't need more leads this year. You need more good leads to run your limited resources out to.
A powerful brand campaign will get more people to know, like, and trust you BEFORE they need you.
With rising costs of acquisition, a mass media campaign will eventually 4X your marketing spend. All you have to do is deliver on the promises made in your advertising.
If you need help growing your business in a shrinking economy or improving your marketing efficiency for a higher Net EBITDA, give me a call. I specialize in helping residential home service companies become BIG brands.