6 Questions to Ask to Identify Your Target Service

by Corey Philip
February 20, 2018

Jack of all trades, master of none.

During my time in the home service industry, I’ve found this saying to be accurate. There are a lot of companies out there who will offer everything from a kitchen remodel to a screen enclosure, and they often do many of those services poorly, are horribly inefficient at them and pull a very slim (if not negative) profit margin at the end.  The problems with being a Jack of all trades, aren’t just limited to operations.  It starts on the marketing side.

I’ve been down the Jack of all trades road.  If we had an estimate request for something that was in our license scope; we bid it.  That could’ve been anything from the windows, to condo hand railing, to a new patio with concrete, or an $85 repair.  The marketing message was “we do this, this, this, this, this, and if you think we might do it, give us a call.”  Not kidding, in a few pieces of marketing content, there was some form “If you’re not sure if we do it, just ask”.

While I did have a team, they weren’t knowledgable enough to provide a quick and thoughtful estimate for all of the possible services we could’ve offered — hell no one is, not even myself.  This led to me having to spend hours on end tracing down suppliers, getting price quotes, discussing an estimated timeline with operations, and then crunching numbers… just to provide an estimate for a project that our chances of getting the project were low, since we were not a well known name in that space, and our price wasn’t competitive because we couldn’t do the project as efficiently to begin with (<— I know that is a long sentence).  Talk about time wasting.

Once it got down to doing the work… well that was messy.  We were working with suppliers we had no relationship with.  Materials wouldn’t come on time.  When we did get them they weren’t right.  Sometimes our fault due to lack of experience.  Crews would get sent out without the right resources.  Inspections would be failed for semi obvious reasons.  The projects would ultimately get completed, and generally better that what a competitor could’ve done (you have to acknowledge there are scopes that nobody specializes in), but this wasn’t the type of business I wanted to operate.

Narrowing Down

The benefits of narrowing down and having a target service are clear.  In the short run, you’ll probably have a drop in sales, but in the long run you’ll have better efficiency, a more scalable business model, less headache and a larger bottom line!

It’s impossible to have a clear and concise message, with a measurable end goal when you’re chasing any project that you could physically do.  As you’re chasing all the project requests that come in for everything under the sun, and spending hours quoting projects that you don’t know jack shit about you’ll find that you just waste time treading water, and ultimately end up drowning.  When you get the projects

Here are 5 questions that you can ask yourself to identify your target service.

  1. What Services Do Your Crews in Operations Like Doing?

    For those that have never owned a business it will be hard to comprehend, but regardless of trade time for a wage most employees will have something that they prefer doing. And whenever they like doing it, it usually means they take pride in their work which translates to a quality and efficiency premium to you. Why not leverage it?

    Do You Have Preferred Clients?

    Think about your list of clients for just a moment. Which ones are your favorite? Why do you like them? Are they happy with your service? Do they provide unsolicited referrals to your company?

    Now, think about which service you provide for those clients.

    Chances are, there’s going to be a common thread throughout your best customers. Identifying those customers and figuring out how you can find more like them will help you narrow down your target service.

  2. What is Your Best Service?

    What I’ve found works best for our company is to focus on doing one service really really well. If you focus on doing one service well, you’re going to start making a name for yourself in your niche and in your area. You want to become known as the company that does “x” really well so that everyone recommends and calls you to do that service for them.

    It might not be your favorite service, but it should be one that is relatively simple, profitable, and can be scaled.

  3. Who Are Your Biggest Competitors?

    To be better than your competition, you need to know who they are, what they offer, and how you can fit yourself in the market to be competitive.

    You can basically break your competition down into three categories:

    • Direct Competition: You need to focus most of your research on this area because these are the companies that sell the same service as you. When someone types a keyword into Google, these are the companies that show up alongside you. There will probably be at least three or four companies in your location that fall into this category.
    • Indirect Competition: Indirect companies are the ones that sell services that are similar or complementary to yours. Although you usually aren’t competing with these companies for the same dollars, it’s possible that they might decide to enter into your niche one day.
    • Substitutes and New Entrants: Are there any companies out there offering a service that could be substituted for yours? What about new companies entering the market? A new company entering your niche could be the next business to disrupt your industry, so keep a close eye on them.

    When it comes down to it, you only have to ask yourself what companies would supply your customers if you shut down shop tomorrow. You can also type in several of the keywords that you want to rank for to see who else is showing up.

  4. Are Your Competitors Causing Your Problems?

    Once you’ve identified your direct competitors, determine what place they are taking in the market. Are they causing problems for your company, or do they simply hold their normal place in the market?

    If you’re running into several companies that are causing you problems in your service niche, think about why that is. Maybe they already have the market cornered, and you need to find a way to pivot. If they’re taking up a normal space in the marketplace, then you know you’re good to move forward.

  5. Are You At Capacity?

    Be honest with yourself with this one. When you look at how much business your company is doing, can you afford to take on more without sacrificing quality?

    When you take on additional business, you may also have to take on additional costs for overhead and management. If you aren’t honest with yourself, you may find your company’s resources stretched to the point of causing serious operational problems.

  6. Which Services Have the Highest Margins?

    Do you know which of the services that you’re offering (or thinking about offering) have the highest and lowest margins?

    There are some companies out there who will basically do some services at a loss just to get that customer’s business (and their referrals). While this can be an effective strategy, focusing too much on those services with the lower margins can waste your time and decrease your profit. Thus, you should start thinking about which services you can eliminate to save yourself time and money.

What Next?

The answers to these questions should serve as an excellent starting point to help you narrow down your target service so that you can start building more effective marketing campaigns.

After answering your questions, you may find that you don’t actually need to change that much at all. This may be the case if your current customers are providing you with regular referrals that lead to high-quality customers and taking on any more than that would put a strain on your company.

However, you may find after answering these questions that you’re actually working with a lot of low-quality customers or that your current customers aren’t that happy with your service. If customer happiness is an issue for your company, you will really need to overhaul what you’re doing.

If you find yourself in the sweet spot where you can afford to grow your business and your customers are happy, you can start pushing your marketing initiatives forward even more than you have been.

What do you think? How did you narrow down your target service?

Let us know your thoughts in the comments section below!

About the author

Corey Philip

Corey Philip is a small business owner / investor with a focus on home service businesses.

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