In May, we began surveying snow professionals for our second annual Snow Industry Benchmark Report. In the end, we surveyed more than 150 snow industry professionals to discover trends, best practices and determine what makes a snow business successful. In early June, we analyzed the results, creating a nearly 30-page report that includes the raw data as well as an analysis of the results.
The results were eye-opening. 2014 was a successful year on many levels for a typical snow industry business. Revenue and profit margins were both up. Because of the increased business, the weather was less of a concern. Businesses were, on the whole, winning new business through referrals thanks to the service they deliver to existing customers.
But that doesn’t mean all is well in snow businesses. Marketing is still a struggle for many snow businesses. Costs – fuel, deicing material, insurance – continue to pressure margins and impact prices. And, as anyone who has talked to a snow professional knows, how to improve the efficiency of their snow business continues to keep business owners awake at night.
What else did we learn? And what should smart snow professionals do to improve their business? Here are 7 things every snow business should do after reading the 2014 Snow Industry Benchmark Report:
- Invest in software – As a snow removal software vendor, we know software can help businesses grow. Software builds efficiencies, creates consistent processes and helps businesses deliver better service. But how do we prove that?
As we analyzed the results from the 2014 Snow Industry Benchmark Report, it became obvious that software does indeed help companies grow. Amazingly, not one of the respondents that indicated that they use software in the field to manage their business saw their revenue decline (more than 10% of businesses not using software saw revenue decline). In fact, nearly half (45%) indicated that their revenue had grown by more than 20%, which was 5% better than those who weren’t using software. Even more remarkably, we found that 92% of respondents who use software saw their revenue increase, compared to 73% of those who don’t use software.
These findings are consistent with what we’ve discovered in past surveys of both snow industry professionals and green industry professionals. What we call field service software helps businesses grow.
Software truly does offer a competitive advantage – especially considering just 25% of respondents use software. So your first order of business this snow offseason is to investigate snow removal software. Need help? Download our Snow Removal Software Buyer’s Guide to learn what questions you need to ask. - Create a referral campaign – Marketing still continues to confound snow professionals; it’s the most cited area of a business in need of improvement. That’s not surprising given most snow businesses are small and don’t have dedicated marketing resources. As a result, many do very little, relying heavily on word of mouth to generate new sales.
Referrals are a great way to grow a small snow business with limited marketing resources. Want to get more referrals than your competitors? Put together a referral campaign for your service business. Some tactics to consider:- Offer a free event or month of service in return for a video testimonial. Hire a professional videographer and create a testimonial video you can feature on your website/social media. You’ll instantly differentiate yourself from 99% of the market.
- Create a competition among your customers. Whoever delivers the most referral leads wins a large prize (iPads are a great giveaway). Use email to remind your customers about your campaign, and thank every customer that delivers a lead.
- Simply ask for referrals and make it easy for customers to refer you to their friends and colleagues. Create a simple web form that your customers can use to submit leads to you. Then, insert that link on your invoices, your website, your social media site, your monthly newsletter, every email you send, etc.
- Don’t be afraid of email – Social media is the darling of the marketing world. It’s new, it’s fresh, and everyone is hopping on the bandwagon.
But don’t forget about using email to market your business and communicate with your customers. As the 2014 Snow Industry Benchmark Report shows, roughly 30% of respondents are using email to market to their customers and prospects, while 40% are using social media. But study after study shows that if you want people to act, email marketing is your best bet.
We recently introduced a new service business marketing add-on to our snow removal software designed to help businesses communicate with their customers. You could use email in your snow removal business to send contracts, detailed service plans, and emails after a snow event detailing what you did and when you did it. It’s a great, automated way to keep in touch with your customers. - Consider your pricing model – Citing rising costs, 55% of Snow Industry Benchmark Report respondents plan to increase prices in the 2014-15 snow season. Those who didn’t, cited competitive pressures as the main reason they weren’t raising prices.
This offseason, make sure you review your pricing model. If you’re like most snow contractors, you’ll have a mix of pricing structures designed to limit your exposure during low and high snowfall seasons. Examine your mix of seasonal and event pricing to ensure that you can weather any storm (or lack thereof). Determine where you’re at risk and adjust accordingly. Another tip: In lieu of raising prices, look for ways to be more efficient. Previously-mentioned snow removal software can help you do that. - Become active in professional organizations – I’m extroverted, so I belong to everything I can. Local networking groups, state organizations like the MNLA and national professional organizations like SIMA and PLANET. I know those groups have helped me grow and improve as a leader, but how can I quantify that?
The Snow Industry Benchmark Report data proves the worth of attending trade shows. Those respondents who indicated they had attended at least one trade show in the past year also tended to have more successful businesses. If you’re not a member of a local or national professional organization (and nearly half of our respondents are not), go get a competitive advantage and learn from your peers. Your business will thank you for it.
- Expand the services you offer – When I owned a landscape irrigation business 10 years ago, the typical green industry business was still fairly specialized. You had irrigation businesses, fertilization businesses, lawn care businesses, arbor care businesses, etc. Today, many of those specialized businesses have expanded to offer a full range of services.
That’s smart. The more you can do to keep a competitor off your property, the better. As we found in the Snow Industry Benchmark Report, the number of snow businesses that do it all – plowing, deicing, shoveling, blowing and hauling – is increasing. Not only does a wide range of snow services keep competitors away from your business, but it can also increase your revenue. - Be different – Perhaps the biggest takeaway from the 2014 Snow Industry Benchmark Report is just how alike snow businesses are; nearly all service residential properties and few use software. Most use the same marketing tactics and see the same results.
With many citing competition as above average or high, smart snow professionals are spending a lot of time determining what makes them different so they can stand above the pack. We’ve heard that some contractors who focused on commercial properties have begun to focus on residential properties because of the increased competition for commercial work. They focus on small neighborhoods at first, using postcards and yard signs to build awareness. With a large enough volume and tight routes, they can be very profitable, often more profitable than they could servicing commercial properties.
Whatever you do, find an opportunity to be different. Whether that’s using software to streamline your business, focusing on email or social media marketing to build awareness, or earning your Certified Snow Professional designation from SIMA, by being different you’ll stand out from the crowd.
