Everything you need to succeed as a Home Services company in a digital world.
July 31, 2018 • Residential cleaning services is an expanding market. Franchised residential cleaning services alone pull in $865 million and are growing around 3% each year. With growth comes new competition. So how can you stay on top? What follows are eight statistics and trends to keep you informed about changes in the industry and ways to expand your business. 1. Specialty services allow cleaning businesses to differentiate Although the home cleaning industry is fragmented, major players still dominate much of the landscape. The top 50 cleaning companies generate about 30% of the revenue for the entire industry. Sometimes, offering quality service isn’t enough on its own. When there’s high competition in a local area, it’s often the best-known and the cheapest home cleaning businesses that stand out. Companies must differentiate to survive and grow. One way that home cleaning businesses are standing out amongst the competition is by offering specialty services — such as home cleaning for pet dander or reducing household allergens. This is especially true online. Adding specialty services allows you to rank higher in local searches by adding more keywords that people often search for. The other major benefit of specialty services: you can charge more. While the national hourly rate for standard home cleaning services run from $25 to $90 per hour, many specialty services such as carpet cleaning and window cleaning come with higher rates, averaging $150 to $200 per hour. 2. Businesses will grow largely through upsells Finding new clients is often a much more expensive and time-intensive process than adding new value to existing clients. In fact, studies have found that acquiring a new customer costs 5x as much as retaining one. On top of that, existing customers are 51% more likely to try new products/services and 31% to spend more money when compared with new customers. Where specializing can help you find new customers, upsells target your current customers, enabling you to get more value out of existing relationships. With growing and fierce competition, incremental revenue will drive growth for many cleaning companies. One upsell tactic is encouraging clients to move to a more expensive cleaning package — such as a more frequent cleaning schedule or a package offering more services. Another tactic is selling customers on one-time offers. Customers often have cleaning needs they might not think to ask for — things outside of your normal contract, such as a once-a-year garage cleaning or spring cleaning. Cleaning Business Today suggests twelve promotions you can offer your existing customers throughout the year, such as a deep clean of the kids’ rooms or porch cleaning. 3. Millennials are driving demands for “green” and “eco-friendly” cleaning services The “green” trend is nothing new. But it appears to be growing across nearly every industry, thanks mostly to millennials and their shopping habits. A study from Nielsen found that 75% of respondents prioritize--and are willing to pay more--for products and services that are environmentally sustainable. For cleaning services, this means a shift toward eco friendly cleaning products as well as cleaning practices that minimize waste. 4. The gig economy is driving recruitment and staffing Is your business growing? Now is the perfect time to be looking for part-time help. According to Bankrate, 44 million Americans have a “side hustle.” Who’s looking for side gigs? Younger millennials (ages 18-26) are the most likely to have a side job to pull in extra cash and typically earn less from their side job than older side hustlers. However, even retirees are looking for extra spending money. Nearly seven in ten women use a side hustle to pay for expenses compared to the four out of ten men polled. 5. Marketing technology will separate winners and losers If you’re looking for new customers, word of mouth will only get you so far. More consumers are relying on the Internet to find local services. In 2017, 97% of consumers looked for local businesses online. A website is a necessity for a home cleaning business, but having a site is not a complete promotional strategy. Small businesses also need marketing tools, such as Facebook or Google ads, to help them gain an advantage over their competition. When potential customers do ask their friends for recommendations, they often do so online. Take advantage by having a professional presence — complete with contact information and other valuable info — that your customers can link to. 6. Online reviews force transparency and competition There’s no hiding bad or unreliable service anymore. Negative reviews can go viral and have a major impact on your business. What should you do if you receive a negative review? Respond professionally. According to a recent survey, over half of consumers expect a business to respond to a negative review within seven days. It will show that you’re listening and that you care. On the flip side, positive reviews can be a major asset in growing your business. The same survey found that more than 60% of consumers read business reviews on Google. 7. Online booking, text message alerts, and other non-verbal communications are non-negotiable More and more cleaning services are using online platforms to manage and run their business more effectively. These platforms save business owners time when it comes to managing appointments and invoices, but that’s not the only reason to use one. Customers have come to expect technology-enabled services, such as text notifications and online booking. In fact, over a third of consumers are more likely to start services with a business that offers online booking. 8. Customers spend nearly 20% more when they can pay with credit card Each year, fewer individuals prefer paying cash or check. Cash and check payments are expected to decrease by 24% and 46% in 2018. Accepting credit card payments is especially important if you serve a younger clientele. Nearly 70% of millennials won’t shop at a store that doesn’t accept credit, debit, or mobile payments. This preference is bleeding into the services industry, as well. Accepting credit cards not only makes customers happy — they also spend more. Customers will spend on average 18% more on the same purchase when they pay via a credit card. Online payments also save you valuable time. Depositing a check just takes longer. Accepting credit cards can reduce the amount of time it takes to get paid by up to two weeks, as well as reducing trips to the bank. These trends are driving change in the industry, but it doesn’t need to be scary. Between new technology and service opportunities, there are plenty of ways to expand your business and build customer loyalty. To take advantage of most of these shifts, you just need strong online presence and business platform to maintain and grow your home cleaning business.