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Improving Customer Retention for Contractors: 5 Strategies

Posted June 27, 2023 by EnerBank USA

Improve Contractor Customer Retention with Financing

Your job isn’t done once you complete the home improvement project and leave your customer’s home. While you’ve done the hard part, retaining the connection between your business and the homeowner is critical to growing your revenue over time. After all, keeping a customer is easier than starting over from scratch — if you do it correctly. Contractor customer retention is essential for your business.

A marketing study reveals that 93% of people trust the recommendation of a friend or family member when seeking goods and services. Maintaining that line of communication with previous customers increases the chances of a referral or repeat business from them. Indeed, you’re 40% more likely to sell to a customer if they’ve already used you for a previous project.

This guide will discuss the importance of customer retention for contractors and provide actionable steps to help you create an effective customer retention strategy.

What Is Customer Retention and Why Is It Important?

Customer retention refers to the ability of a business to keep its customers over time. The better the customer retention rate, the more loyal your customers are, and the more likely they’ll repurchase your products and services. For contractors, customer retention is a valuable indicator of service quality and customer satisfaction, as well as a fundamental factor in long-term business success. Here are some of the key reasons customer retention is vital for contractors:

  • Improving customer retention increases the likelihood of customers becoming loyal to your business and becoming repeat buyers. This retention is called customer stickiness, and it can increase your bottom line in the long run.
  • New customer acquisition can cost four to five times more than keeping your current customers. Your business will save on sales and marketing costs by retaining existing customers.
  • Existing customers know your services, making cross-selling and upselling easier on subsequent projects.
  • Satisfied and loyal clients help your business grow its customer base through referrals.

5 Proven Strategies for Contractor Customer Retention

While customer retention begins with the initial business interaction, you build it throughout the lifetime of the relationship with continuous effort. Your business can elevate your customer retention program and build customer loyalty by incorporating the following strategies.

1. Keep in Contact

It’s essential to maintain consistent contact with a previous customer but not be overly pushy. Incorporating an email marketing strategy  is one of the best ways to accomplish this. Create a quarterly newsletter that includes important seasonal information regarding a recent renovation. Is there something the customer needs to clean, maintain, or check during a specific timeframe? For example, if you installed a pool, you could send quarterly emails about maintaining your pool through all seasons. A robust content library is essential, as it provides non-salesy, educational information for your customer base.

2. Provide Referral Opportunities

One way to improve customer retention for contractors is by offering referral opportunities to existing clients. Depending on the job, like a kitchen remodel, customers may not use you for repeat business. However, they do have friends or family who may need your services in the future. Creating a promotion, such as a gift card to buy something for their new kitchen, is a great way to encourage referrals from previous customers. Keep this offer as evergreen as possible and send it out whenever your workload can use a boost.

3. Be Active on Social Media

Social media provides an avenue to reach new customers and is an excellent way to connect with existing clients and build your unique brand identity . This channel encourages immediate feedback and is an ideal customer support platform for your business. A well-implemented social media strategy fosters engagement and trust from your existing customers, positively impacting customer retention.

Start by regularly posting informative and engaging content that provides value to your customers. You may also boost your credibility by posting high-quality images of your completed projects and tagging homeowners (with their permission).

4. Send Non-Business Related Communications

To improve customer retention, contractors should go the extra mile to connect with their customers. Everyone likes receiving a little surprise on their birthday or a holiday. Sending a card of gratitude on an important day has more of a personal touch than other communications. This kind of contact helps keep you top-of-mind and reinforces the homeowner’s great experience working with you.

5. Offer Financing

Contractors who offer financing options make their services more accessible, even to clients with limited budgets. With financing options, you remove the burden of significant upfront investment, and customers become more empowered to purchase. After a successful transaction, you’ll establish a good customer relationship and encourage repeat business in the future, thanks to convenient and manageable monthly payments.

Bonus Tip: Offer Sneak Peeks

Do you have a new product or service you’ll be introducing? Give customers who have followed you on social media or signed up for your email list a sneak peek before releasing it to the general public. You could also prioritize booking for customers who have already completed a job with you to encourage people to stay subscribed or continue to follow you.

Improve Customer Retention with Contractor Financing

For contractors, customer retention is critical for long-term business success. Offering financing options makes your services more accessible to clients, encourages repeat business, and builds customer loyalty. Regions | EnerBank USA’s loan programs help contractors empower their customers through flexible payment options. Sign up today to learn how our loan programs can help grow your business.


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