Service businesses have several benefits over manufacturing or resource extraction businesses. You can start small with relatively little capital for many types of service businesses. They are easy to scale up merely by adding service providers. Service businesses are the easiest to expand as franchises since you only have to train the workers and set up basic facilities. Here are four essential tips for running a successful service business.
Find Ways to Differentiate
You don’t want to be one of many competing businesses in the same service industry. You can readily find a unique niche relative to your competition by adding complementary products and services. For example, Gaffey chemical dosing systems started in the swimming pool maintenance business. It evolved into disinfection and control systems because there weren’t enough product sellers and service providers in the area selling unique products. By offering engineers who could diagnose any problem and then offer a complete solution custom designed for each customer, they grew into a major player.
Know Your Niche
You cannot be all things to all people. Understand what makes you different from the competition. If you’re a low-cost service provider, you shouldn’t try to add upscale services unless you are offering it for less than the competition; the best example of this is generic organic brands at the grocery store competing with the named brand organic products that cost 50% more. If your focus is quality, don’t start cutting quality to try to save money.
Know Your Customers
Create a composite of each customer segment. What are their interests? What are their needs? What do they value most? The working parent pressed for time is going to appreciate speed over quality, but values the service provider who offers both the most. The retiree has more time but will value convenience, service, and comfort. Advertising features your customers don’t care about is a waste of time while neglecting to mention what they consider essential features results in them going with a competitor.
Value Repeat Business
Too many service businesses focus on recruiting new customers.Repeat customers are far more valuable since they only have to be recruited once and then generate a constant stream of income. You need to track customer purchases and reward repeat buyers so they keep coming back; do this right, and they’ll become your best advertisers, too, via word of mouth referrals. You don’t have to implement a customer relationship management system for a small business, though it has value. Be careful with loyalty programs, since they may scare away customers who think you’re trying to collect too much information about them.
Don’t Forget the Little Things
Big brand name service companies use consultants to teach their employees the little niceties. They are taught how to politely greet customers, thank them for doing business with the company, and courteously handle upset customers. These little things increase the customers’ perception of the experience while only taking a few additional seconds.
Service businesses can be extremely profitable if you do everything right. Make sure that you follow the simple tips in this article if you want to make your service business a success.