Contractors already know how important it is to have loyal commercial property management customers. This is especially true for electricians, plumbers, roofers, and similar contractors who frequently perform repair and maintenance work. There are risks, however, with relying too heavily on a single customer segment or property type. Right now, contractors exclusively concentrated in office work are facing risks.
Office buildings nationwide are struggling with low occupancy rates, declining rents, and financing issues due to increasing interest rates. Occupancy rates sit around 50% nationwide and industry experts predict office property values could decline by as much as 30%.
Half leased properties facing a 30% drop in value are going to significantly reduce spending on building maintenance and improvements. This will directly impact contractors that rely heavily on office properties for work orders and revenue.
As a result, a diversified customer base is more important than ever for commercial contractors. Here are 4 benefits of having a diversified customer base:
A diversified customer base protects your contracting business from unexpected downturns in any one particular market or customer segment. When service contractors rely too heavily on a single customer segment or market, economic changes can have a severe impact on revenue and profitability. Diversifying your customer base across multiple property types, spreads risk and minimizes the impact of market changes.
A diversified customer base can lead to increased revenue and profitability in the long run. By expanding your customer base, you open up new opportunities for sales and growth. You can also gain insights into new markets and customer segments, allowing you to tailor your services to meet the unique needs of your prospects and customers. This can help increase customer satisfaction and loyalty, leading to higher revenue and profitability.
Having a diverse customer base can help you build a stronger brand and reputation. By reaching a broader audience, you can increase brand awareness and recognition, which can help attract new customers and retain existing ones. This can lead to increased customer loyalty and advocacy, which is vital to any contractor’s long-term success. A strong brand and reputation can also help you differentiate yourself from competitors.
Finally, diversifying your customer base can help your business stay competitive. By expanding your reach, you can keep up with changes in the market and adapt to new trends and customer demands. Right now, the multifamily industry is seeing unprecedented demand and growth in rents. Contractors with a diversified customer base can capitalize on strong growth in one market segment while another segment sees a decline.
Commercial service contractors need a marketing plan to diversify their customer base. A contractor who has never worked with industrial properties or retail centers can’t expect them to just start calling out of the blue. One great place to start is with property management associations.
Property management associations exist for all property types. A contractor looking to grow in the multifamily space could join the local apartment association. This typically includes a directory or list that can be used for database email marketing, telemarketing, cold calling, and even hard mail. Contractors can also participate in association-based networking events and tradeshows.
Diversifying your customer base is essential to the success and sustainability of your contracting business. By expanding your reach, you can protect your business, increase revenue and profitability, build a stronger brand and reputation, and stay competitive. Diversifying the service work into other commercial properties will set your business up for success no matter what the future economy holds. Contact us today to learn how we can help your team form relationships with commercial decision-makers and diversify your customer base.