Overcoming Seasonality

Transcription

1 Summary Report From Data Collected October 2018 Overcoming Seasonality In October 2018, EGIA surveyed its network of contractors on Overcoming Seasonality. This is a summary of the results.

2 Overcoming Seasonality Shoulder seasons -- decreased business during the off-peak seasons -- are a major obstacle for nearly every contracting company. But how do companies attempt to flatten the highs and lows of seasonality? How does the time of year affect hiring, firing and seasonal employees? In last month's Snapshot Survey, we polled contractors on overcoming seasonality to learn what's working -- and what's not -- across the industry. Learn More About Overcoming Seasonality To learn more about seasonal business trends, and how to overcome them using marketing initiatives, service agreements and other tools, visit the EGIA Contractor University Contracting Best Practices Library to access resources like templates, videos and more.

3 Does your company s revenue vary significantly based on the season? Long a hallmark of the trades, HVAC and other home services in particular, seasonal revenue cycles still persist across the industry. According to contractors we polled, 87% of companies see significant fluctuations in revenue based on seasonality, against 13% that do not. Attempting to flatten that seasonal earnings curve is difficult, but accomplishing it to some degree can certainly set companies apart from the competition. Solving that puzzle, of course, is easier said than done, but typically comes with a combination of seasonal marketing initiatives, service agreements, financial planning, and overall company culture. 87% OF COMPANIES SEE SIGNIFICANT FLUCTUATIONS IN REVENUE BASED ON SEASONALITY It is important to plan and budget for these in not only your marketing plan but your financial plan. Look at year-over-year stats and create a trending forecast so you know the percentage of calls that need to be run each month. Always have a membership program so during the offseason, you can run these calls. Set-up different promotions not only for your membership base but for your prospects. - HVAC Contractor in Northern California

4 In a typical year, does your company layoff (or hire) seasonal employees? Once an all-too-common occurrence, seasonal layoffs have decreased to some degree in recent years as more and more companies have put an emphasis on seasonal initiatives and year-round planning to prevent the practice. When asked if they hire or layoff seasonally, 82% of contractors we surveyed indicate they do not, against 18% that do. Most companies identify finding good people to hire as the primary issue they re facing, so ensuring that when the right person is hired, they don t need to be let go during the offseason is of paramount importance. At the same time, someone who isn t worth keeping throughout the year, perhaps, isn t an ideal hire just because it s July, either. Some best practices to flatten the seasonal cycles include putting an emphasis on service agreements all year long, so techs can focus on maintenance during slow seasons, as well as seasonal marketing initiatives to drive business when it doesn t happen organically. 82% OF COMPANIES DO NOT LAYOFF (OR HIRE) SEASONAL EMPLOYEES We believe that by focusing on marketing, generating calls and getting business during the shoulder months, we can attract and retain top talent from other companies when they lay people off. Better people are what build a good company. The customers notice and really care about who comes into their home. - HVAC Contractor in Texas

5 Does your company offer specials or promotions to draw customers in during slow shoulder seasons? As evidenced from the data, most contracting companies are still at least feeling the effects of seasonal business fluctuations, if not suffering from them entirely. So how many companies use special offers and promotions to try to drive business during those periods? 77%, according to respondents, against 23% that do not. The logic is proven; if business isn t happening organically during certain months, focus more of your promotional strategy to incentivize customers to call in when the phone otherwise isn t ringing. The most popular specials among respondents included a percent discount, free equipment with purchase, and free diagnostics. 77% OF COMPANIES OFFER SPECIALS OR PROMOTIONS TO DRAW CUSTOMERS IN DURING SLOW SEASONS We push the preseason equipment maintenance along with planned maintenance inspections. Promotions are strongly emphasized for new equipment. We have two sales programs we only run in the first quarter. - HVAC Contractor in Georgia

6 How far in advance do you plan marketing for shoulder seasons? With nearly eighty percent of respondents saying their companies run seasonal promotions and specials, next we wanted to know how far in advance companies are planning out marketing for those slower times. The leading answer was 1-2 months, cited by 39% of respondents, with a number of contractors also saying they simply start as soon as the shoulder season arrives (27%) as well as 3-4 months (11%). While there s really no maximum length to plan ahead, most best practices would at least suggest planning a quarter out, to ensure you ve thought of everything ahead of time and planned for any contingency. Especially if you want to have media buys placed and printed collateral ready to roll, waiting until the season is upon you is likely going to lead to the impact of your marketing not being felt until the shoulder season is nearly over. 27% 39% 11% 10% 6% 2% 2% 3% HOW FAR IN ADVANCE DO YOU PLAN MARKETING FOR SHOULDER SEASONS? Think out at least a quarter ahead of time. Be thinking about the typical patterns -- yes, there will always be exceptions but the typical patterns in your market; what incentives and what needs to be in place three or four months down the road. In September, I want to be working on January, the first quarter marketing plan for next year. If you want to plan even further out, more power to you. - Weldon Long, EGIA Contractor University Faculty Member

7 Which employees have their hours shortened during shoulder seasons? Finally, while shortening employee hours during shoulder seasons seems to be less common than in years prior, the practice still pervades. When asking which employees are most likely to have their hours shortened when business slows, far and away the leading role was service technicians (63% of respondents), with many also naming installers (27%) and comfort advisors (23%). Many companies want to keep employees at full hours year-round to keep them at full pay and, hopefully, high job-satisfaction. So if leads and jobs slow down, one option can be to come up with other work that needs to be done that might have been put on the backburner during busy season such as inventory, warehouse cleanup, or maintenance tasks. 63% 27% 23% 12% 5% 3% 2% EMPLOYEES THAT HAVE THEIR HOURS SHORTENED DURING SHOULDER SEASONS I understand that you may lose a little revenue at this time if you don t have the work hours. But if you ve planned that into your schedule, then you know this is kind of a shoulder season. So you may dip in revenue, and we don t want to lose revenue, but we also don t want to lose people and we don t want our people to lose pay. - Drew Cameron, EGIA Contractor University Faculty Member