It’s been more than a year since the world as we knew it drastically changed. It’s been a rollercoaster of a ride, with travel ground to a halt and nearly empty restaurants and buildings. However, with a majority of non-essential workers stuck at home, home improvement projects have skyrocketed as people have needed to remodel space for work, school and even replace aging plumbing systems — which of course means more opportunity for service contractors.
According to HomeAdvisor’s 2020 State of Home Spending report, the average home services spending for households who took on projects rose to $13,138, an increase over 2019 survey results where homeowners spent $9,081 on average. While increasing costs of supplies and labor factored into the increase, the survey also found homeowners were spending more as well.
Additionally, the top three projects last year were interior painting (completed by 35% of households), bathroom remodels (completed by 31% of households) and new flooring (completed by 26% of households). The average bathroom remodel cost was $13,401.
“Last year's boom in home improvement was a surprise to everyone,” said Mischa Fisher, chief economist for Angi (formerly Angie's List). “We entered the year with strong fundamentals for the industry — both economic growth and demographics were helping drive expansion in the home improvement market. However, when the pandemic hit, everyone feared a repeat of the 2007-2008 recession, when both the housing and home service industries were hit hard and contracted sharply. Fortunately for the industry as a whole, consumer spending pivoted to the home and away from bars, restaurants, travel, vacations and commuting, and toward home care.”
Thanks to the latest round of COVID-19-relief stimulus payments, additional household savings and home equity, the remodeling boom is not going to let up any time soon.
“While the boom in 2020 was a welcome surprise for home service professionals in an otherwise bleak year, it may leave some plumbing and heating contractors worried about a slump following all the activity in 2020,” Fisher added. “However, it's more likely that high demand and limited supply, as well as elevated materials prices and disrupted supply chains, will continue to be the norm for most of 2021 — and likely beyond. Consumers have unlocked hundreds of billions of dollars in home equity, borrowing costs remain at historic lows and demographic trends continue to be strong. Barring the unexpected, it looks like 2021 and 2022 will be more strong years for home spending.”
In fact, demand is stronger than some contractors can handle, as I’ve heard stories from more than one plumbing company about having to turn work away. But, for those interested, there are a few different ways contractors can capitalize on this latest remodel trend.
1. First, in this day and age, contractors need to have an online presence. Consumers are going to Google your business. They’re going to look for customer reviews on your site and on third-party review websites. Contractors should have an updated, easily navigated website that showcases their services and workmanship.
2. Highlight your qualifications. List your industry certifications and affiliations. Showcasing your experience is a great way to differentiate yourself from your competition. Promote your value rather than your price.
3. Embrace technology. In today’s post-pandemic world, you must have some type of contactless service for your customers. Nobody wants to handle a piece of paper anymore. At the very least, your bids and payments should all be electronic.
4. Offer a variety of financing options — and let your customers know about them. Financing helps make large purchases more affordable. It may also allow customers to make bigger ticket purchases for higher efficiency and higher-end products. Besides, consumers are used to subscription based services, (think Netflix, Hulu, Nest) so monthly payments may be more appealing than a large up-front payment.
5. Communication is key. Contractors absolutely must deliver on their promises. If you show up late — or not at all — that’s a bad first impression left on a potential customer, which could lead to a negative review and damage your company’s reputation. This goes hand-in-hand with No. 3 above, but take advantage of customer SMS texting, in-app messaging or email to keep your customers up-to-date on any changes in arrival times. If the job requires a quote, make sure it is delivered when promised, and follow up with the customer to see if they have any questions or concerns.
Furthermore, remodels are not the only way for plumbing contractors to grow in 2021. Thanks to the last year, with the run on toilet paper and bottled water, there are plenty of possibilities for add-on sales for items such as bidets and whole-home water treatment systems, to name a few. With this latest spike in COVID-19 cases, there’s always the fear it will happen again.
No matter what 2021 brings, there are plenty of opportunities for growth for those plumbing contractors who want it.
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