Like last year, everyone continues navigating inflation challenges, still hard on the heels of rising mortgage rates and home prices. Combined with wavering supply chain issues, labor, etc., all directly affect home service businesses. One big question still weighs heavily on consumers and business owners: When will things finally turn around and we start experiencing tangible relief?
We collected data from over 180 home improvement business owners to better understand their concerns (like rising costs 68%, up 8% YOY) and priorities (like customer retention and growth 45%, up 5% YOY). After reviewing the results, one thing has stayed constant: effective advertising is essential to success. On the flip side, we surveyed over 1,100 homeowners to gauge their thoughts and gain insight into their spending on home services and what motivates them to dig further into their wallets.
Key findings:
- 72% of homeowners prefer to receive ads that contain an incentive or offer
- Almost half of H&G businesses get the bulk of their jobs via advertising
- 25% of consumers budget up to $500 annually on home maintenance, and 34% $750 or higher
- 70% of H&G businesses budget between $10,000 and $75,000 for advertising per year
- House owners want services more than once—they want the full-season discount
- 9 out of 10 business owners agree that direct mail WORKS for their company
- More than half of consumers would like to receive home & lawn offers in the mail
- Seasonality impacts most businesses, and many adjust services to stay competitive
- 56% of consumers would switch service providers for a lower cost, 37% with a coupon / offer
All growing lawns need care
“It would be great if lawn care companies provide discounts for the repetitive customers!”
“The home and garden work costs are too expensive in my area.”
Homeowners may need a little more incentive to get them to pick up the phone and call or scan a QR code to learn more details about a particular lawn care company they’re interested in. While it’s no surprise low cost took the top spot as a motivator for consumers to switch lawn service providers, it’s notable that businesses that provide a wide variety of services took the second position with 37%, bumping customer reviews (34%) down a spot from last year.
Now we know there is money on the table, and homeowners are more willing to part with it if offered an incentive. 80% of respondents are in it for the long haul, choosing 25% off a full lawn care season as the top offer they want, with 71% seeking 50% off their first lawn service.
They’re out there; let them know you are
“I believe it’s crucial to allocate more budget towards digital marketing strategies, such as social media and targeted online ads, to reach a younger audience while still maintaining a balanced approach with direct mail for local engagement.”
Last year, over $380 billion was spent on advertising from TV to iPhones to coupons in the mail, and that number will only get larger. Translation: businesses need to advertise because, if you’re not, someone else definitely is, and they’re selling products and services that most likely match yours. Thus, how will potential consumers in your area or across the nation know if you don’t get your message out there and in front of their faces? When we asked H&G business owners how they get the lion’s share of their business, while referrals and word-of-mouth hold significance, 54% said good old-fashioned advertising brought in the most jobs.
The combined impact of direct mail / digital
Direct mail with QR codes to targeted households breaks through the ad noise and finds and gets into the hands of consumers who are looking for and more likely to respond to your products. From digital to direct mail, which channels are most popular from the perspective of current business owners? Social media (70%) takes the top spot of channels H&G advertisers currently use, with mobile display ads (46%) coming in second and direct mail at the #3 spot (43%). These results bode well for both mediums as advertisers work to build more cohesive customer journeys by combining direct mail with digital for a robust omnichannel experience to increase engagement and raise ROI.
The argument for direct mail is strong and getting stronger, as 9 out of 10 home and garden businesses use or have considered using direct mail advertising. Maybe for its tactile versatility, where receiving something in your mailbox, holding it in your hand, and then putting it in a pocket or merely up on the fridge as a reminder. Or, an easier, more accessible selection when a homeowner needs improvement, landscaping, window replacement, etc., and they got an offer right in their palm! According to AudienceSCAN®, 72% of U.S. adults keep and read the ads they get in their mailboxes.
When we asked H&G direct mail advertisers how many years they had used direct mail as part of their business marketing mix, 73% said 3-10+ years—and a whopping 92% agree that direct mail advertising has worked for their business. Here lies the next question: Why? Or what do you like about advertising with direct mail? The top 3 answers were price (62%), customer service received (42%), and response rate (40%).
There is no shortage of big pest locations
“When dealing with pest control services, I would like to see a list of pests dealt with before signing up. It would also be desirable if they provided repair services.”
Now we know that if you live in Florida vs. a different, perennially colder area in the United States, your pest situation might be a constant battle for peace—that doesn’t mean homes from California to New York don’t have their fair share of creepy-crawlies to tend with. At the same time, 46% of homeowners pay up to $50 a month for pest control services (32% pay up to $100 or more).
Like lawn care, low cost took the top spot for reasons consumers would try or switch pest control services at 56%. However, companies that provide a variety of services (33%) moved up again in this category, jumping from #7 to #4 this year! Businesses listen up; consumers are looking for that one-stop-shop they can trust.
Home is where the budget is spent
“I love that I get fast and reliable quotes when it is necessary.”
“Service companies need to take into account that many homes are old.”
There is just no getting around it as a homeowner: homes need regular maintenance and upgrades—it is what it is. And our respondents have sought a wide range of services. Maintaining that HVAC (heat and air conditioning) system is most popular at 56%. Plumbing took the next spot (55%).
Encourage spending with offers
Similar to our recent local advertising survey, despite rising cost concerns, most respondents listed healthy advertising budgets. 70% have an annual ad budget of $10,000 or more, with 44% budgeting $25,000 or more (16% $75,000 or more!) for advertising. 40% of these owners also plan to increase their ad spend this year, with 47% planning to maintain current spend.
The big how, is how home and garden businesses plan to spend money on advertising. 37% plan to spread it out throughout the year, while 35% take a more cautious approach and move money around based on performance.
Homebuyers (just like last year) are taking on more and more costs beyond a mortgage these days, so they are planting roots and sticking around longer. Meaning, the right offer to the right target audience at the right time might just land a contract that lasts for years. When we asked, on average, how much our respondents spend on home maintenance from housekeeping to carpet and window cleaning to power washing, etc., in a year, 20% spend up to $250, and 59% (up 10% year over year!) spend $250+ up to over $750+ per year.
With many homeowners cutting insurance in many parts of the country due to impossibly high premiums, the writing on the wall says they’re biding their time and savings because they know they’ll have to pay to repair those surprise incidents (fire, flood, hurricane, and more) on their own not if, but when they occur. When asked, on average, how much they spend on home repairs (i.e., electric, flooring, painting, plumbing, HVAC, etc.) in a year, 48% spend up to $1,000, and 37% spend $1,000+ up to over $3000+ annually on said repairs.
Note: 72% of homeowners prefer to receive ads with an incentive or offer.
My castle; my preference
“I tend to look at advertisement postcards in my physical mailbox more than I do email promotions and offers.”
“Good workers in this field are hard to come by, so when they have numerous positive reviews on their website it makes a huge difference in the choosing process.”
56% of survey-takers said they prefer to receive home & lawn offers in the mail (tactile, unchanging coupon with the headline and offer strategically placed so as not to be missed is as good as currency). Email at 36% (both of which are more than social, websites, mobile ads, etc. combined), in its own way, is a static image that is yours and will not change once opened and saved from your inbox.
Creepy? Not creepy? But effective!
There are various personalized advertisement options to reach existing and potential customers. From new home buyers to birthdays to anniversaries, it doesn’t hurt to add a little bit of personalization on a postcard that arrives at the same time as coupons.
Regarding personalized offers and what homebuyers would like to receive, the engagement and high percentages from our respondents’ replies are pretty telling. Yes, consumers like to be reminded that service providers appreciate them and value their business. And, hey, an easy one is the birthday message—no matter whom it comes from, when somebody says, “Happy birthday!” it always feels good—it just does.
Make It A Season They Remember
Home and garden business owners credit April through September as their peak season, with June (71%) and July (70%) being the top 2 busiest months. While also recognizing the beginning of the year, January (60%) and February and the end of the year, October, November and December (61%) are their slowest periods. But this doesn’t mean there aren’t opportunities to take advantage of all year.
Slow seasons happen for many businesses. However, during these times, it’s still essential to advertise. Seasons change, but your ads will continue to resonate with customers as things pick up again. For example, a landscape or lawn care company can install holiday lights, clean gutters, pressure wash windows, etc. Similarly, for summer, a snow removal business could use its service trucks to move equipment and gravel around or help with other road maintenance. One must realize how vital ingenuity in advertising is to success—always thinking, brainstorming with staff, and finding new ideas to get the word out about your business.
“Trust” is a powerful word
“I have mostly used small local companies, but have gotten quoted a price and then it ends up being double the estimate because of some ‘unexpected’ issue. Scammers!”
More than ever, deciding to spend money on home improvement / lawn care is a major decision for most Americans. So, we asked our survey respondents to choose from a list of advertising brands they consider “trustworthy.” Last year, one brand took that top spot, a constant reminder of the relationship between advertiser and consumer. However, surprisingly, two companies, Google and Amazon, tied this year for the highest honor and took the trust reins away when it comes to home improvement brand promotions with 35%. Maybe it’s the excellent return policies or the incredible catalog mixed with impeccable customer experience and service. HGTV now holds the next position with 23%, but YouTube (22%) is jumping up from #10 to #3 on the list!
While the survey is no obligation, and homeowners can choose the direct mail brands that they believe to be considered “trustworthy,” Valpak is happy to be still ranked as the most trustworthy direct mail brand:
We say it a lot because it’s true: Advertising is an investment in your business and will boost brand awareness, jobs, profits, and more if done strategically, i.e., with the help of tools and a trustworthy / knowledgeable ad partner.
For owners, as well, trust is the keyword. Much time and money goes into advertising and finding the right fit for your company, so a business must choose the best brand / channel for its products and services.
While the survey was blind (sent/managed by PureSpectrum), H&G business owners still ranked Valpak as the most trustworthy direct mail brand:
You can hear it. It’s on the table; the money is talking
There is money to be spent on advertising by H&G businesses, as 71% of owners we surveyed listed an annual revenue of $250,000 or more and 41% at $1 million or more! Yes, even with inflation and hidden home buyer fees, there is still money on the table. As many homeowners know what it takes to maintain a happy home, business owners know and are aware and striving for success, staying, + growing power. Are you spending enough on your advertising efforts and with enough reach and frequency to make a real impact on your target audience? Are you using the channels your audience prefers and looks to when searching for your type of service? Are you incentivizing sales and rewarding loyalty to returning customers? Knowing how to read the writing on the wall is just as important as the writing when driving your company to the next level. Proven advertising solutions, data-driven insights, and a local marketing expert who lives and works in your neighborhood—there’s every reason to partner with Valpak Clipp on marketing!