Reflecting on 2024 Sales Trends and the Future
At Waterford Business Solutions, we work with multiple industries in all areas of the country. We have over 200 clients, giving us valuable insight into sales and costs across the country. This includes HVAC, plumbing, electrical, landscaping, cleaning, power washing, construction, and other home service professionals.
Please remember that trends do not speak to one specific business but to the average of each industry. An industry can be defined as a group of companies that do similar work. Two businesses in the same town can have different outcomes based on financial decisions and marketing choices.
Why does all of this matter? According to studies conducted by QuickBooks Online integrating companies, such as Housecall Pro or ServiceTitan, businesses are still experiencing supply chain issues and labor shortages that have stagnated sales for the past few years. Understanding the current market sales trends and what is affecting those outside your control can help you prepare for your business’s future, especially after seeing such a steep increase in sales in 2023 during the pandemic.
What can affect sales?
Many specific things can affect your sales. From our experience, some main factors affecting contractors are location, weather, and economy. Depending on your location in the country, you can experience a variety of situations. When looking at sales related to location, weather takes on a more significant role.
Sales affected by weather began, January to March, are the slower “prep” months for many industries. Customers are starting to get antsy with the winter coming to an end. They are beginning to prepare for spring and spring projects.
The warmer-than-average weather should have indicated we were in for a roller coaster. The mild weather lasted longer than usual, and most regions saw average mild weather up to May.
However, temperatures increased across the country when we reached May, June, and July. These were beneficial months for almost every industry that Waterford specializes in.
Towards the end of the summer, we saw an increase in drought conditions in some regions and flooding in others. In the drier areas, HVAC sales went up.
However, the maintenance business for homes and buildings suffered in the flooded areas. As summer ends and fall begins, the weather extremes are leveling out. We are almost back to where we started this year.
We should also consider the country’s economy. Over the past few years, we have seen interest rate increases, and many Americans have felt the squeeze on their wallets. This has led to a decrease in the overall request for higher-priced services.
HVAC Sales Trends
When we look at residential HVAC, many services surround what the weather is doing. With milder temperatures into May, HVAC systems did not have to work as hard as usual. Those businesses did not see the request for repair or maintenance services begin late spring and into summer, which is when we saw an increase in sales nationwide.
Residential sales, however, were mostly in repairs. Considering the elevated costs in other areas, many people choose to repair rather than replace. We started to see an ebb in those sales around August as many areas started seeing an increase in rain and cooler temperatures.
Commercial HVAC took advantage of cooler spring and early summer months to focus on new installations. These advantages go hand in hand with the increase in construction across the United States. They could retain old customers for maintenance while having an influx of new buildings to work on during good seasonal factors.
In recent years, there has also been a push for better air quality. We continue to see an increase in HEPA filter sales and smart system sales. Better air quality leads to the “green energy” movement since these systems are more energy efficient.
Customers will see the benefits of lowered energy costs and the removal of pollution in their homes and offices. As the global population grows, the desire for clean air also grows due to urbanization. Understanding your specific location and its current population will be essential to understanding your sales trends and how you can add services that will assist more people.
Residential sales trends show an increase in sales of Smart systems. Smart system users can adjust components to exact specifications, or use presets to do that for them. There has been a serious push for these smart systems, which can control not only HVAC but also lighting within the home.
During a time when customers are trying to cut back on unnecessary expenses, having self-regulating systems that can tell when rooms are unoccupied to turn off lighting and HVAC has shown to be a strong sales tactic. Companies choosing innovative paths, including smart systems, home automation, predictive maintenance, ductless solutions, or green solutions, are seeing higher revenues. Customers want to save more in the long run with more modern solutions. You can read more about them using the link below.
https://www.plecto.com/blog/sales-performance/6-biggest-trends-hvac-and-home-service-2024/
Plumbing Sales Trends
However, even though there are trends for innovation, your sales reps has to be ready to explain those benefits in depth. As residential plumbing and electrical customers’ wallets get even tighter, they choose not to remodel the bathroom or get lighting or panel upgrades. Instead, they only do the unavoidable repairs.
Even though some customers are reluctant to do more than necessary, the popularity of smart plumbing is also growing. Smart plumbing includes smart toilets and water leak detection devices to avoid more expensive repairs. Learning these new technologies for your business could help put you ahead of future sales curves.
Interior and Exterior Maintenance
The exterior maintenance businesses are more aligned with the previously mentioned trades. For services such as lawn care and exterior cleaning to be able to complete jobs, the weather needs to be sunny and generally nice. With the previously mentioned floods, droughts, and unpredictable weather, many expected services were not scheduled.
Conversely, the interior maintenance industry is less affected by weather. Weather indifference combined with economic strain has contributed to significantly lower profits. The trades mentioned above were able to leverage weather in some of those unbearable months to pull out sales.
Our interior and exterior business are more of “luxury” businesses.
We will refer to them as the “luxury trade.” These are some of the first industries people cut back on to save money. Instead of sending your car to be detailed, weekly housekeeping services, or even landscaping services, we are seeing more people choose the hands-on approach. These businesses are in no danger of closing, but they are slightly behind where they typically would be at this time of year. We just have not seen the high profits we have seen in past years.
Overall, we expect minimal sales increases through the end of 2024 or into the beginning of 2025 for companies that have not changed any of their business processes from 2022 to 2023.
During a time when sales may be decreasing or stagnant, some smaller companies decided to sell. Buying up a smaller company did increase the purchasing company’s sales, as they saw an increase in customers. Purchasing customer lists from smaller companies has been more effective than advertising this year.
During the pandemic, we saw our clients did not have to work hard to gain or retain customers. Overall, we have seen the most considerable profitability come from those companies that cut expenses and could think outside the box.
Most election years tend to cause an economic disturbance, and this year has been no different. There are more uncertainties about where this election will take us.
We did see the Federal Reserve drop interest rates, but that does not change the economy overnight. Those drops will trickle through the systems by decreasing the loan rate over the next three (3) to six (6) months. Once customers can put a little money back into their bank accounts, we should start seeing the economy loosen.
However, customers tend to only consider refinancing their mortgages once interest rates drop at least 1%. This will substantially increase the cash available for customers to spend on housing upgrades and maintenance projects. Hopefully, the Federal Reserve will meet again towards the end of this year or early next year to discuss further decreases to the standard interest rate, resulting in better mortgage rates and financing costs.
Businesses looking to increase profits for 2025 should further diversify revenue streams or cut expenses. Check out LABOR TRENDS or MATERIAL TRENDS.
For a more in-depth look check out our youtube video out Reflecting on 2024 Sales Trends and the Future https://www.youtube.com/watch?v=KhxYm7pTvwI
If you need additional help or have any questions, Waterford Business Solutions is happy to help. Feel free to call us at 864-351-0852 or email us at Info@WaterfordBusiness.com.
