Many homeowners do not consider the size of the home services market despite the amount of consumer spending in this market. Even business owners within the home service market may not consider how much competition and potential growth opportunities exist for home services companies.
The data can be hard to quantify because the home services industry is constantly changing and consumer spending shifted during the global pandemic. Americans spend far more time at home than prior to 2020. Most estimates and available data shows there are approximately 2.5 million home services businesses in the United States. The size of the homes services market generates over $500 billion in revenue each year. With more than 6 million people employed within this industry, this is a major part of the economy.
More importantly, the home service industry is expected to continue to grow in the coming years, as more and more people hire out home repairs and maintenance services. This means there is a competitive landscape already and the market growth will herald new competition within the digital advertising space.
In order to understand how best to position your home services business for success, there are a number of things to consider. First, the number of home services businesses vary by state and by the demographics within each state. Second, the factors that are leading growth within home service spending must be considered. Penultimately, the future trends within the home services market help business owners plan new strategies. Finally, a complete business and marketing plan can be considered.
Home services market varies by location
There are some online home services that cross geographic boundaries. For example, meal prep delivery businesses, moving truck rental, storage services, and other niche home service companies connect homeowners with products and services across the nation. Generally, though, home services are bound by a specific service area. Therefore, the competitive landscape will vary by where a business operates.
How Many Home Services Businesses Are There Near Indiana?
In a state like Indiana, there are an estimated 25K home services businesses. This number includes businesses that provide a variety of services, such as plumbing, electrical work, HVAC, painting, carpentry, roofing, landscaping, cleaning and maid services, home health care, and pet care.
As a midwestern state, Indiana has demand for many of these businesses seasonally. An example of this is snow removal which only occurs a few months each year. Concrete companies offer repair services in states like Indiana because seasonal climate changes can affect basements, foundations, driveways, patios, and other concrete.
The home services industry is a large industry in Indiana and poised for an explosive growth rate in coming years. In 2021, the industry generated an estimated $12.4 billion in revenue and employed over 160,000 people. The average age of Indiana’s total housing stock is increasing which often drives growth in consumer demand for renovation and emergency projects.
How Many Home Services Businesses Are There Near Texas?
A far bigger state like Texas has far more home services business-estimated at over 100,000. Many of these businesses are the same as northern and midwestern businesses. Business activities may not be as seasonally affected in warmer states. Construction, exterior painting, roofing, landscaping, and other outdoor businesses slow down considerably in colder climates. During the relatively warm winters of Texas and other southern states, these services operate nearly all year.
Total cost of home services for Texans in 2021 is an estimated $50 billion. There is high demand but the home services industry in Texas is highly competitive. A large number of businesses vie for a share of the market. While there is consumer demand, businesses must understand how to gain a competitive position within a crowded market. Residential homes need many services and all businesses within the industry need to be visible.
In traditional marketing a pest control business must compete with a plumbing contractor for print ads, radio, television, billboards, and the pile of direct mail stuffed into every homeowner’s mailbox. From Indiana to Texas there is a better marketing strategy to help capture relevant and qualified leads for your business.
Home Services industry growth
Performance marketing uses data and technology to increase the visibility of businesses when homeowners are entering the market for your specific products and services. Instead of blindly broadcasting your brand outward, contemporary marketing meets your target audience at the right time and at a much lower cost than outdated advertising.
This starts with studying the home services industry. These are some of the most dynamic times for the market due to a number of factors, including:
- Healthier and Independent Seniors: The aging population is leading to an increase in the demand for home services. Older Americans with access to professional maintenance, repair and emerging business such as home health care are staying in their existing homes longer.
- Working Families: The increasing number of dual-income households means families have less time to do home repairs and maintenance. These trends indicate they are more likely to hire professionals. In terms of marketing, working families also don’t have time to search through dozens of options. Your business needs to stand out and deliver fast responses.
- Online Platforms: Smartphone technology and the involvement of tech companies connects homeowners quickly with home services. With a few taps of a screen, homeowners can have pest control services or furnace repairs requested and scheduled.
- Home Improvement Culture: There is good reason for homeowners to care for their homes, but improvement projects are often inspired by the popularity of cable channels, social media influencers, and a general culture of changing the old for new.
Adapting for the Future
Housing stock continues to age. Home improvement culture has been ever present in American culture. Rising interest rates disincentive moving and building a new home. This is the present state of the home service industry.
What about the future? Businesses that forecast based on data can ride the wave of trends. Early adopters stand to make far greater profits in spaces with emerging demand and few competitors. Here are some of the key trends that are expected to shape the home services industry in the coming years:
- Green home services: New businesses are coming into the market. From HVAC repair to landscape architecture, homeowners are demanding services that lower their carbon footprint. For some homeowners, the environment is a priority.
For others, saving money on energy costs is the motivation. Every year new technologies emerge to meet this demand. The green home will need better insulation, windows, sustainable flooring, appliances that run on renewable energy, solar panels, and other specialized products. Offering these options now can help your business grow.
- Smart home market: Directly adjacent to green home trends, the smart home is rapidly growing. In a short amount of time, every appliance, light bulb, gadget, lock, and security system will be connected to the internet of things. Home services companies will be needed to install, maintain and repair these technologies.
- Millennial homeowner: Meet your new boss, far different than your old boss. The green home and smart home markets are helping older Americans, but the Millennials are fueling these trends.
In order to market your business to Millennials, you will need to demonstrate your interest in sustainable and eco-friendly home services. You will also need to meet these new homeowners where they live-the internet.
Highly effective digital marketing
The home services industry is a dynamic and growing industry. There are a number of opportunities for businesses that can provide high-quality services at a competitive price. In order to capture your share of the home service market, business leaders must adapt both to consumer demand and who the new consumer is.
In today’s competitive market, customer service is more important than ever. Older Americans are demanding a personal touch curated to their needs. In a saturated industry full of millions of home service providers, these homeowners will spend their money with the companies that are responsive, effective, and courteous. New homeowners from the rising generation of Millennials are just as fickle as the prior generation and they are savvy enough to let everyone on the internet know about great 5 star experiences and poor 1 star businesses.
Highly effective digital marketing identifies your target audience and uses strategies to capture their attention. When you attract qualified leads, there is far greater opportunity for success. Home service providers tend to provide excellent customer service especially when they are hired by the right customers.
There are so many companies within the home service market that the only way to win is to find your niche, perform research, and use data to market your brand to homeowners in need of your great products and services.