Do You Have The Expertise To Make Your Contracting Business A Success

Most contractors chase calls no matter how far from their shop.  Even those with the ability to turn down distant work usually work an overly large service area.  Here are three reasons you might want to reduce your service area.

1. Smaller Areas are More Efficient

Only the technician profits from windshield time.  For you, it’s pure expense.  With a smaller area, you not only have less windshield time, you can better dispatch the appropriate tech to the appropriate call.  For example, send Mr. Fix-It-All on warranty calls.  Send your sales oriented technicians to the no-cool call on a 15 year old system.

Smaller service areas increase your dispatching flexibility to better match the right tech to the call. >

Smaller areas reduce drive time between calls.  They reduce expenses.  They increase your dispatching flexibility to better match the right tech to the call. 

2. Marketing is Concentrated

The most marketing exposure a contractor has comes from seeing well-wrapped vehicles sporting well-designed graphics.  When you send them to distant location, the frequency of exposure is reduced.  When you keep them concentrated and reinforce efforts with outdoor and direct marketing to targeted neighborhoods, you can create the perception that you are “the” company to call and that you are everywhere.  Consumers are often herd creatures and trust the wisdom of the crowd and supremacy of the market leader.

Spread your service over a broader area and you spread your branding as well.  Greater concentration builds on itself and can become exponentially more effective.

3. You Probably Have Lots of Runway Left

Contractors chase distant jobs because they believe they must chase them to grow.  The truth is most contractors have single digit market shares in their service areas, if they even have enough share to be measured.  For example, a moderately affluent service area in North Texas can yield nearly $40 million of residential service, maintenance, and replacement work.  If a contractor concentrates on this area and builds his market share to 20% over time, which is certainly doable, then the contractor can grow to nearly $8 million in sales without leaving his main territory.

You do not make money servicing equipment in your no-call area. Instead, they are an expense and a distraction.>

Growing in an area where you already have presence is far easier than building brand presence from scratch.  As long as you get a greater return from your marketing efforts in your current area than from marketing in a new one, why spread your efforts?

Define a Service Area

Defining a service area is more art than science.  There are no set rules.  Simply define an area that makes sense.  Usually there are natural obstacles and boundaries that help like rivers, lakes, city/county limits, highways, and so on. 

Once you define an area, to the best of your ability, confine your marketing to that area.  As contracting legend Ron Smith says, make this your dominant market.  Study it.  Get to know it.  Get to know everything about it.  Seek ways to network into it.  Try to position your company as an integral part of the territory.  Make a point of stressing that this is the geographic area you specialize in.  This, by itself, helps differentiate from many of your competitors.

Identify Expansion Areas

Bordering your dominant market are areas you might expand into one day.  You should not market to expansion areas, but you can run service calls in the expansion area.

Set a 'No-Call' Area

Everything else becomes a no-call area.  When calls inevitably come in, be disciplined. Do not take these calls. Refer them to a friendly contractor outside your area who might reciprocate. 

You do not make money servicing equipment in your no-call area. Instead, they are an expense and a distraction.

Wait to Expand

Knowing when to expand is another judgment call.  Usually, contractors expand too soon, while there is still a lot of runway left.  Remember, early expansion means dissipation of your marketing efforts and increased costs.  As long as you are growing in your dominant market, there’s no need to expand.  Stay focused.  Stay concentrated.

To better mine your existing territory or to expand into a new area, take advantage of the Service Roundtable.  It’s a contractor’s best and most affordable business resource featuring unlimited downloads of sales, marketing, and business management tools, peer-to-peer support, and cash back from the industry’s best buying group.  Join today by >CLICKING HERE


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