Why Repeat Customers Are Important for Home Services Contractors

Published: August 15, 2023, Last Updated: February 2, 2024

Writer at Finturf.com
Writer: Martha Pierson
Editor at Finturf.com
Editor: Anais Osipova
Reviewer at Finturf.com
Reviewer: Michael Needham

Imagine having customers who love your work so much they can’t wait to hire you again. Or do you dream of having customers so loyal that they would never call anyone else for their home service needs? Now stop imagining. This is entirely within your reach.

But why exactly is a repeat customer so important? How can you turn a one-time client into a loyal, recurring customer?

If you’re a home service contractor or own a small to medium-sized home service business, you’ve landed in the right place. This blog will dive deep into the potential benefits of repeat customers, how to identify them, and strategies to increase them.

What is a Repeat Customer?

A repeat customer is a client who returns to use your services after an initial purchase or use. They’re not just a one-and-done deal – they’ve experienced your work, appreciated it, and decided you are the go-to professional for their home service needs.

Contractor showing home design to couple

Repeat customers, especially in the home service industry, are a testament to a job well done. After all, homes are intensely personal spaces. Homeowners are typically picky about who they trust to work on their properties. Earning that trust not just once but repeatedly is an accomplishment that speaks volumes about the quality and reliability of your service.

How to Identify a Repeat Customer?

Now that we’ve established what a repeat customer is, let’s examine how you can identify them in your client base.

First and foremost, you need a solid record-keeping system. A robust customer management system (CMS) is more than just a tool for tracking invoices and scheduling appointments. It’s your secret weapon in identifying repeat customers. Your CMS should be able to quickly and easily generate a list of clients who’ve used your services more than once. CMS platforms range from comprehensive cloud-based solutions like ServiceTitan to simpler, locally installed applications like HubSpot.

Once you have a database of all your customers, look for patterns in your data. Do certain clients request your services at specific times of the year? Are there clients who have booked you for multiple types of services? Identifying these trends can reveal insights into customer buying behavior that can guide your marketing efforts and service offerings.

In-home services, the jobs are rarely the same. And in this uniqueness lies an opportunity. Observe the types of jobs your repeat customers have requested. Is there a pattern or commonality? For instance, if a customer repeatedly hires your heating, ventilation, and air conditioning (HVAC) service each spring for a tune-up, you might identify them as a potential repeat customer for other preventive maintenance services.

A takeaway for the future is that identifying these clients isn’t just about recognizing faces. A good way to measure customer loyalty is by identifying their potential lifetime value, which we will discuss more in-depth later.

The Meaning of Returning Customers for Business

In the realm of home services, which includes plumbing, electrical work, landscaping, and more, a repeat customer is worth their weight in gold. They are more than just a name on an invoice or a scheduled appointment. They are ambassadors for your brand and spread positive word-of-mouth about your services, which amplifies your brand’s reach.

Repairman handing business card to client

Returning to our previous discussion, identifying the Customer Lifetime Value (CLV) is a significant aspect of recognizing the most loyal and profitable customers. CLV measures the total worth of a customer to your business over the entire timeline of their relationship with you. Rather than focusing on single transactions, CLV encapsulates the total economic value a customer brings to your business throughout their engagement with your brand.

Here’s a basic formula for calculating the customer’s lifetime value:

CLV = (Average Value of a Sale) x (Number of Repeat Transactions) x (Average Retention Time in Months/Years)

By identifying and understanding the CLV of your customers, you can determine who among them are frequent patrons and your most profitable long-term partners. This knowledge enables you to strategically channel your efforts and resources toward nurturing these valuable relationships.

So what are the main benefits of having repeat customers for your home services business?

  • Increased Revenue: A repeat customer spends, on average, 67% more than a new customer, which significantly contributes to your revenue and cash flow over time.
  • Lower Marketing Costs: According to Harvard Business Review, attracting a new customer can cost five times more than keeping an existing one. Repeat customers cut down on these costs drastically.
  • Free Marketing and Referrals: Happy repeat customers can become ambassadors of your brand and recommend your services to others. According to Nielsen research, people are four times more likely to buy when referred by a friend.
  • Strategic Customer Value Identification: Understanding CLV allows you to identify customers who offer the most value over the long term. This isn’t just about single transactions – it’s about recognizing and nurturing relationships that yield consistent profitability.
  • Valuable Feedback: Did you know about 88% of consumers rely on reviews and recommendations from other customers when making a purchase decision? Repeat, loyal customers are more likely to publicly share their positive experiences through online reviews and comments. As a result, these clients can help provide word-of-mouth marketing and advertising for your business, ultimately helping to attract new customers.

Repeat Customer Statistics

Repeat customers form the backbone of any successful home service business. They provide the foundation for a sustainable business model and drive long-term profitability. Here are some statistics that reflect the benefits of fostering customer loyalty:

  • Increasing customer retention by just 5% can increase profits by 25% to 95%.
  • In 2022, repeat customers generated the highest volume of work (69%) and revenue (44%) for contractors.
  • Existing customers are 50% more likely to try new products and spend 31% more, on average, compared to new customers.
  • A company’s top 10% of most loyal customers spend three times more per purchase than the other 90% of customers do.
  • 74% of people say they’ll stay loyal to a brand due to quality products or services.
  • 72% of customers will switch brands after one bad experience.
  • 91% of customers are more likely to purchase from brands that provide them with meaningful and relevant offers.
  • Over 89% of companies claim that delivering excellent customer service plays a major role in customer retention.
  • Consumers read an average of 10 online reviews before trusting a local small business.

How To Get Repeat Business

A repeat customer isn’t just a testament to a job well done but an endorsement of your consistent service quality and customer experience. So, as you cater to your clientele, always be on the lookout for opportunities to turn first-time customers into loyal, repeat clients. Your business’s success may well depend on it.

Close up on contractor agreement paperwork

Gaining repeat business is an art that marries exceptional service with smart strategies. Here’s how home service contractors can master the craft of gaining repeat buyers:

  • Offer Service Agreements and Maintenance Contracts: Offering customers annual or semi-annual service agreements can ensure regular client interaction. This leads to repeat business and increased trust in your business. For example, yearly servicing of HVAC systems or roofing inspection ensures a steady workflow and grants customers peace of mind.
  • Post-Service Follow-Ups: After completing a service, follow up with your customers to ensure they are satisfied with your work. A simple courtesy call to check the functioning of a newly installed appliance or an email survey asking about their experience could demonstrate your commitment to their satisfaction. These personalized touchpoints push your brand’s dedication to customers to the forefront, helping improve client relationships and drive repeat business.
  • Offer Multi-Service Discounts: If a customer needs both plumbing and electrical work, offer them a bundling discount to motivate them to choose you for both services. This positions your company as a one-stop place for all the customers’ needs. Consequently, it is more likely that the customer will repeat business if the service is high quality, as it is more efficient and convenient.
  • Have a User-Friendly Website and Mobile App: Streamlining your digital platforms is key. Customers will appreciate the ability to book services easily, view their service history, and access any available discounts or offers all in one place. When customers find it easy to engage with your brand online, they are more likely to return for future services, leading to sustained customer loyalty.
  • Provide Subscriptions and Financing Options: Introduce subscriptions for some services that may require regular intervention. For example, a monthly subscription for lawn maintenance can enhance commitment to your services. You can also offer customer financing to ease the financial burden for your clients, making it easier for them.
  • Implement Personalized Offers and Customized Service Plans: Understanding your client’s unique needs and preferences allows you to tailor your services or offers to them. For instance, offering a discounted and custom HVAC maintenance plan tailored to the house size can foster a deeper customer connection.

How To Reward Returning Customers

Rewarding your customers is about finding creative ways to show your appreciation while offering tangible benefits that make their continued loyalty worthwhile. Here are some strategies to reward your return customers in the home service industry:

  • Implement a Tiered Loyalty Program. Home service contractors can implement a tiered loyalty program, rewarding customers based on their level of engagement. For instance, a higher tier could offer priority scheduling or discounts, additional services, or earlier appointment times. This can encourage customers to continue using your services regularly.
  • Offer Exclusive Discounts on Next Service. Customers love discounts. This might be a percentage off their next HVAC maintenance check or a discount on their future plumbing repair for leaving you feedback. By providing these incentives, you’re showing gratitude to your clients and subtly encouraging them to return to your business to benefit from exclusive perks.
  • Establish Partnerships with Local Businesses. Collaborate with local businesses to offer bundled discounts. For insurance, if you run an HVAC company, you can partner with a local hardware store for discounts on air filters for your customers. This helps cross-promote local businesses and improves efficiency. Customers are more likely to do business with companies offering affordable quality services.
  • Early Access to New Services. If you’re adding a new service to your offerings, like smart home installation or drought-resistant landscaping, give your most loyal customers early access and discounts. This can also be used as a marketing tool to generate positive reviews from clients and promote word-of-mouth.
  • Provide Extended Warranties: As a gesture of appreciation, offer extended warranties on services to your most loyal customers. An extra year of warranty on pipe repairs or electrical equipment can truly strengthen the trust in your business as a quality provider, enhancing their likelihood of choosing you in the future.
  • Offer Seasonal Specials. Finally, offering seasonal specials can be a viable way to reward loyal customers. For instance, a landscaping business could offer discounts on spring clean-ups or winterizing services in the fall. This gives your customers a reason to book your services seasonally and ensures steady business throughout the year.

Sum Up

In home service contracting, repeat customers drive revenue growth and stabilize cash flow. Businesses can foster client loyalty by delivering consistent quality, nurturing customer relationships, and acting on feedback.

Innovative reward strategies, such as loyalty programs or exclusive discounts, further amplify customer satisfaction. This cycle of service excellence and appreciation fuels the sustainability and growth of the home services industry.

Martha Pierson

Content CreatorMartha Pierson is a marketing strategist and business development expert based in Glendale, California. As a content creator for the Finturf blog, Martha shares her vast knowledge and experience with readers to help them build and sustain successful businesses. Her articles offer practical tips and actionable advice that entrepreneurs can implement immediately to achieve their goals. Martha also provides insightful analysis of current trends across different industries and offers expert guidance on how businesses can adapt to changing market conditions.

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