We’ve all heard the saying, “Money doesn’t grow on trees.” Sadly, there’s no way to plant pounds for your plumbing business that will grow into hundreds overnight (wouldn’t that be nice?). While we can’t give you a money tree, we can tell you that one of the best ways to grow your business is through recurring revenue.
What is Recurring Revenue and why should your plumbing business have it?
Recurring revenue is predictable, stable revenue that comes into your business at regular intervals. It helps you better maintain cash flow, reduce reliance on one-time sales and most importantly, allows you to forecast revenue so that you can make better decisions for the future of your business.
Even though recurring revenue is valuable for plumbers, many of them, especially in the residential space, often don’t think about building recurring revenue into their business model. Homeowners assume they have a static plumbing system that doesn’t need any kind of regular maintenance.
As a result, some residential plumbers don’t see enough demand for recurring services to justify building them into their business model. But imagine if you checked in on your residential customers every year or so. There’s definitely an opportunity there to create recurring revenue.
For plumbing businesses in the commercial space, recurring service work is more common. However, there’s often steep competition for these contracts, so it takes more time and resources to make yourself stand out.
Build a loyal customer base
It’s cheaper to retain customers than convert new ones. So, any time you work with a perfectly-suited customer for your business, it’s worth going the extra mile to increase the chances that they’ll want to hire you again.
Go beyond simply completing their initial job and instead find ways to build genuine relationships with existing customers who might need, or have, recurring work.
You can also look for repeat customers already in your contacts and segment them into a list. Then offer those specific customers certain discounts when they purchase recurring services, such as a monthly, quarterly, or yearly inspection package.
Incentivise new customers to become repeat customers by offering special discounts or referral bonuses on top of any bundled services.
Teach engineers how to sell Monthly Recurring Services
Make sure your engineers fully understand how to sell recurring maintenance or service packages. Train them on the packages you offer, make sure they know every detail of how the contract works and which services it covers. This makes it easy for them to answer questions on the spot and connect the dots for customers on how the package helps solve their unique challenges. For example, teach them to lead with cost savings as the main benefit and encourage them to use the customer’s real numbers as an example. Even if a customer isn’t ready to buy a recurring package at first, make sure engineers note that they might be ready later, or even that they might be able to upsell them later.
Boots on the Ground
Send someone out to look for apartment buildings, retail spaces, or facility maintenance companies that might contract out plumbing installation and service (i.e. shopping centres). Then, ask for the building manager and offer them a list of the repairs and maintenance services you provide.
Often the building manager has the authority to hire you, or they may work with a facility maintenance company that contracts out plumbing work. If that’s the case, they can often put you in contact with the facility maintenance company instead.
While they’re not super profitable, these are easy jobs to complete and can fill in slow days, help you network and build relationships with other businesses in the trades that might want to work with you on projects down the line.
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