15 Tips on How to Grow a Service Business
Every service-based entrepreneur wants to take their business to the next level. But figuring out how isn’t as straightforward.
That’s because there are numerous growth opportunities for service businesses, and it takes time to figure out which is the best for you. Below, we’ll take a look at 15 different ideas on how to grow a service business.
How to Grow a Service Business: 15 Different Ways
Running a service-based business can be both fulfilling and challenging. As a business owner, you may have to work extra hard to ensure that you deliver exceptional services to your clients. In addition to that, you need to constantly be on the lookout for ways to grow your business.
Growing a service business requires a strategic approach that involves identifying the right target market, offering the right services, and creating a loyal customer base. In this blog post, we will discuss some tips on how to grow a service business.
1. Review untapped customer segments and identify your target market
Your existing service business might cater to a very specific customer base. However, there are likely ways you can expand your audience with complementary services to your already-existing core offerings.
Let’s say you’re a tour guide who offers hikes through your local parks. You might add a walking tour of your neighborhood or customized private food tours as additional offerings. Tourists who may not enjoy the outdoors would potentially like to walk the city or try the cuisine. These unique service business ideas can also differentiate you in the market.
One of the most important steps in growing a service business is identifying your target market. Your target market is the group of people who are most likely to use your services. Identifying your target market will help you tailor your services to meet their specific needs and preferences.
To identify your target market, you need to consider factors such as age, gender, location, income, education level, and occupation. You can also conduct market research to gather more information about your potential customers.
Once you have identified your target market, you can focus your marketing efforts on reaching out to them through channels such as social channels, email marketing, and online advertising.
2. Increase sales with customer loyalty programs
Customer loyalty is key to sustainable business growth. One survey found that of loyal customers, 86% recommend the business to their connections, two-thirds write a positive review online, and 46% maintain their loyalty after a single negative experience.
You can use customer loyalty programs to grow your service business and leverage this word-of-mouth marketing. A nail salon may offer a free pedicure after 10 paid services, or a dog groomer may gift a free dog treat each time someone refers a new customer.
Word-of-mouth marketing is one of the most effective marketing strategies for service businesses. To encourage your existing customers to refer you to their friends and family, you can create a referral program.
Your referral program can offer incentives such as discounts, free services, or gift cards to customers who refer new business to you. This will not only help you attract new customers but also increase customer loyalty and retention.
To promote your referral program, you can include information about it on your website, social media channels, and email marketing campaigns.
In a service business, your customers are your biggest asset. Therefore, it’s also important to focus on providing exceptional customer service at all times.
To provide great customer service, you need to be responsive, communicative, and empathetic. Always respond promptly to customer inquiries and address any issues or concerns they may have in a timely and professional manner.
You can also go the extra mile to surprise and delight your customers. For example, you can send them a handwritten thank-you note or offer them a free service upgrade as a token of appreciation.
Online reviews are also a powerful tool for service businesses. Positive reviews can help your service business attract new customers, while negative reviews can damage your reputation and deter potential customers.
To leverage online reviews, you need to actively encourage your customers to leave reviews on platforms such as Google, Yelp, and Facebook. You can do this by including a call-to-action in your follow-up emails or by offering incentives such as discounts or free services for leaving a review.
It’s also important to respond to all reviews, whether they are positive or negative. Responding to positive reviews can help you build relationships with your customers, while responding to negative reviews can show that you are committed to addressing any issues and improving your services.
3. Grow by expanding your portfolio of services
When you launched your business, you may have had one or a few select services. Now that you’re looking to grow, you can potentially add to your service menu. This can boost average order value (AOV), as well as attract new customers who are interested in those specific services.
For example, a dog walker might consider adding housesitting to their list of services. They could care for pets, plants, and day-to-day household duties like fetching mail and taking out the trash.
Expanding your service area can help you reach new customers and increase your revenue. If you currently serve a specific geographic area, you can consider expanding to neighboring cities or towns.
It’s also important to do market research and assess the competition in the new area to ensure that there is demand for your services.
To attract a wider customer base, it’s important to offer a range of services that cater to different needs. For example, if you run a cleaning service, you can offer both residential and commercial cleaning services.
Offering a range of services will also help you upsell to existing customers. For example, if you offer landscaping services, you can also offer lawn care services to your existing clients.
However, it’s important to ensure that the services you offer are aligned with your expertise and resources. Don’t offer services that you can’t deliver or that are outside of your area of expertise. You need to ensure that you have the resources and capacity to deliver your services to a wider audience. You may need to hire additional staff or invest in new equipment to meet the demand.
4. Use the Lean Startup method
The Lean Startup method is “a principled approach to new product development” that “teaches you how to drive a startup-how to steer, when to turn, and when to persevere and grow a business with maximum acceleration.” Essentially, it helps you identify and prioritize new product opportunities.
5. Use alliances and strategic partnerships to get new customers
Business partnerships put you in front of others’ audiences, helping you build brand awareness and win new customers. And added bonus is that these audiences already have a certain level of trust with your collaborators, and they represent a predictable, defined audience segment. In other words, you can tailor your offerings to meet their needs with the advantage of not having to win their trust.
6. Optimize your website for SEO
SEO, or search engine optimization, helps website users find your business via search. This is a great way to attract new customers. Here are some things to do to optimize for SEO:
- Update your Google My Business profile so it’s accurate and complete. It’s actually the top local ranking factor, and is especially important for service businesses that serve a specific geographic area.
- Speed up your site. Page load time — how long it takes your website to appear — affects your ranking. The faster your site, the better your rankings.
- Start a blog. Research keywords relevant to your business and create content to target those keywords.
- Review your metadata. This includes your page meta title and descriptions. If you rank but have low click-throughs, you’ll want to adjust this copy to be more compelling.
Remember, SEO is a long game. You won’t get overnight results. But if you’re consistent, you’ll see results over time.
7. Leverage sales funnel software
If you’ve ever relied on face-to-face networking for customer acquisition, you know how time-consuming it can be. Sales funnel software automates a lot of that process for you, so you can focus on other things while knowing you’re also nurturing those leads.
Some sales funnel software to check out include GetResponse, FreshWorks, and HubSpot.
8. Use digital ads to market your small business
Digital ads are effective for customer acquisition in particular. With digital ads, you can run campaigns and promotions that target a specific audience segment across multiple channels. Some channels include paid social ads (Facebook, Instagram, Twitter, etc.), paid search ads, and display ads.
Regardless of the campaign and tactics you employ, ensure messaging is consistent across the entire user journey. If your ad promises a certain experience, make sure the link you’re driving to delivers on those expectations.
9. Create and implement a content marketing strategy
Your content marketing strategy will support other efforts, like SEO, email, social media, and digital ads. Content can build trust with and add value for existing and new customers. If you’re a career coach, you might have a blog where you publish advice about resumes, interviews, and negotiations. Career coach Carol Parker Walsh has a blog where she showcases her expertise.
10. Promote your brand on social media
There are more than 9 million active users on Facebook alone, not to mention channels like Instagram, Twitter, and TikTok. Like content, social media is a great way to promote your brand and build and nurture relationships. Regular posting helps you stay top-of-mind, and paid advertising opportunities allow you to target specific audience segments with tailored messaging and campaigns.
If you offer childcare services in your area, you might post on social media about local events, small businesses in the neighborhood, and nearby activities to do with kids. Then your paid social media efforts might drive people to book a tour of your childcare facility, targeting parents in your zip code.
Using social media to promote your business
Social media is a powerful tool for promoting service businesses. Platforms such as Facebook, Instagram, and Twitter allow you to reach out to potential customers and engage with your existing customers.
To effectively use social media to promote your business, you need to create a strong social media strategy that includes regular posting, engaging with your followers, and using relevant hashtags.
You can also use social media advertising to target specific groups of people who are likely to be interested in your services. For example, if you run a fitness coaching service, you can use Facebook advertising to target people who are interested in health and fitness.
11. Grow your reach with email marketing
More than 90% of people use email, and it’s one marketing channel you truly “own” — while a medium like social media can be taken away at any moment. You can use email to reengage existing customers as well as attract new ones.
One way to win new customers via email is to build your list. Offer valuable content to your email channels — a massage therapist could show people how to make DIY foot scrubs, for example. You can also use email for promotions and discounts on new service bookings.
12. Use online webinars to win new customers
Webinars have become increasingly popular as the world moved to a mostly virtual state during the COVID-19 pandemic. Most webinar attendees spend 53 minutes consuming the content. That’s a lot of time to prove your expertise and grow your business.
You can host live or pre-recorded webinars. They can be free, or you can charge attendees for webinar access. You might offer a discounted rate to those who only want the recorded sessions vs. those who attend the live ones. Bear in mind, though, that if you charge for webinar access, the content and experience must be worth it.
13. Demonstrate expertise and build trust with online courses
Online courses have also surged in popularity. More people are forced to learn online and, as a result, more people are becoming comfortable with it.
You can promote and sell your courses independently on your own website, or list it on a third-party platform to take advantage of a pre-existing audience. Terrain, for example, has curated courses targeted to entrepreneurs who want to learn key skills.
14. Grow by acquiring related businesses
One potentially quick way to business growth is by acquiring a related or complementary business. This way, you get their customers, employees, processes, and systems along with it.
If you own a law firm, you might purchase another one local to you. Or a tailor might acquire a local shoe repair shop, while a car wash could find a car repair business to buy.
If acquiring another business is not in the cards at the moment, consider partnering with other aligned businesses. By partnering with complementary businesses, you can cross-promote each other’s services and reach a wider audience.
For example, if you run a catering service, you can partner with event planners, florists, and rental companies to offer a complete package for weddings and other events.
You can also offer a referral program to your partners to encourage them to refer business to you. This can be a win-win situation for both parties, as you both benefit from increased business and exposure.
15. Franchise your service business
Franchising is when you license out your “business” to franchisees for a fee so they can open their own business under your brand. Essentially, they open a business under your brand name while adhering to your standards.
Comet Cleaners and Laundry is a perfect example. The dry cleaners offer franchising opportunities in select markets, so they can grow without having to do all the leg work.
Creating Your Business Growth Plan
You need proper planning for small business management and growth before implementing any of the strategies listed above. Enter your business growth plan. Here’s how to do it:
Define your expansion goals
If you want to know the best way to grow your service business, you’ll want to start with identifying what that growth looks like. This is the goal-setting stage. Make sure they’re specific and measurable, and write them down so you have it documented.
Research to identify customer segments
Customer segments are essentially groups of shoppers who share a set of characteristics. Some customer segments might be based on demographics like age, location, and occupation, whereas others might be based on behavioral data like highest AOV or most repeat purchases.
When conducting market research, you’ll want to use internal (your own data) and external sources (research you can find on the internet and from your competitors) to inform your customer segments.
Know the strengths and weaknesses of your competition
Adding on to the idea of researching your competitors, it’s also a good idea to do a holistic analysis of the competitive landscape. Look at things like their branding, pricing, website usability, social media engagement, and physical spaces to see what they’re doing well and where they can improve. Then apply those insights to your own business growth plan, identifying opportunities they haven’t yet capitalized on or places you can do better.
Evaluate your team and finances
Take stock of your existing resources so you know exactly what you have and what you need to help you reach your goals. This includes business partners, full- and part-time employees, and outside contractors. You’ll also want to analyze your cash flow and cash reserves to see how much you can comfortably allocate for your growth plan.
Identify the best expansion strategies for your service business
Once you’ve done the research to identify gaps, challenges, and opportunities, you can prioritize your growth options. Consider your resources, competitors, and personal goals when you put these ideas together. Table anything that doesn’t fit into your bigger picture so you can revisit it at another time.
Outline key indicators for tracking progress
Nodding back to our original goal-setting stage of the business growth plan, you’ll want to consider additional metrics to measure your progress. These key performance indicators (KPIs) are measurable, concrete data points that show where you’re succeeding and where you might need to pay extra attention. Some examples of KPIs for your business growth plan might include:
- Sales by service
- New customers
- Repeat purchases
- Customer loyalty program membership
- Basket size
Whatever your KPIs, start with your own historical data to establish a baseline and then track against that.
Write your business expansion plan
Now it’s time to put all the pieces together! Document your business growth plan so you can keep yourself accountable, as well as share it with your team and any potential investors. Remember, your business growth plan can be a living document, so it’s okay to come back to it and change things up as your business and goals evolve.
Moving Forward With Your Service Business
There are many ways to grow a service-based business. The best way all depends on your personal and professional goals, as well as the competitive landscape, your customers, and your resources. Once you’ve got your ideas together, put together a business growth plan to get it into action!
Looking for Service Business Ideas? Here are a Few to Get You Started
Personal Chef Service
Many people don’t have the time or skills to cook healthy, delicious meals for themselves or their families. Offering a personal chef service could be a great way to help busy people eat well and save time.
Virtual Event Planning
As more and more events are held online, there is a growing need for virtual event planners who can help businesses and individuals plan and execute successful virtual events.
Social Media Management
With the rise of social media platforms, many businesses are looking for experts who can help them manage their social media accounts and create engaging content that resonates with their audience. One way business owners can grow with this idea is to expand services to include more digital marketing offerings or include consulting business options.
Pet Sitting and Dog Walking
Pet owners are often in need of someone to care for their furry friends when they’re away. Starting a pet sitting or dog walking business could be a great way to turn your love for animals into a profitable business.
Home Cleaning Service
Busy professionals and families often don’t have the time or energy to clean their homes. Offering a home cleaning services could be a great way to help people keep their homes clean and tidy.
Lawn Care and Landscaping
Many homeowners want to keep their lawns and gardens looking beautiful but don’t have the time or knowledge to do it themselves. Starting a lawn care and landscaping business could be a great way to fill this need.
As more students are learning online, there is a growing need for online tutors who can help students with their coursework and provide academic support.
Mobile Car Wash
Many people don’t have the time or inclination to wash their own cars. Offering a mobile car wash service could be a great way to bring your services directly to your customers and provide them with a convenient and efficient car washing experience.
Many businesses and individuals need high-quality graphics for their websites, social media accounts, and marketing materials. Starting a graphic design business could be a great way to provide these services and help your clients create a strong visual brand.
With more people looking to improve their health and fitness, there is a growing demand for personal fitness trainers who can help them achieve their goals.
Home Repair and Maintenance
Many homeowners need help with repairs and maintenance tasks around their homes, but don’t have the time, tools, or expertise to do it themselves. Starting a home repair and maintenance business could be a great way to fill this need.
Many people need professional photos for their websites, social media accounts, and marketing materials. Starting your own photography business could be a great way to provide these services and help your clients create a strong visual brand.
With more businesses and individuals operating globally, there is a growing need for translation services that can help bridge language barriers.
As more businesses and individuals work remotely, there is a growing need for virtual assistants who can provide administrative support, scheduling, and other services remotely.
Personal Shopping and Styling
Many people want to update their wardrobe and style but don’t have the time or knowledge to do it themselves. Offering personal shopping and styling services could be a great way to help people look and feel their best.
FAQs About Service-Based Businesses
Q: What are some tips for growing a service business?
Identify your target market and understand their needs and pain points.
Invest in marketing and advertising to increase visibility and reach.
Offer excellent customer service to build a loyal customer base.
Expand your services to meet the evolving needs of your customers.
Consider partnering with complementary businesses to expand your reach.
Q: How can I differentiate my service business from competitors?
Focus on providing a unique and personalized experience for your customers.
Emphasize your company’s values and mission to build a strong brand identity.
Offer specialized services or products that your competitors don’t provide.
Invest in employee training and development to provide high-quality service.
Use customer feedback to continuously improve and refine your offerings.
Q: What are some common challenges service businesses face?
Difficulty in scaling from small businesses to larger businesses while maintaining quality.
Finding and retaining talented employees.
Increasing competition in the market.
Managing cash flow and financial stability.
Q: Adapting to changing customer needs and preferences.How can I measure the success of my service business?
Monitor key performance indicators (KPIs) such as revenue, customer satisfaction, and customer retention.
Conduct regular customer surveys to gather feedback and identify areas for improvement.
Track marketing and advertising campaigns to determine their effectiveness.
Analyze financial statements to assess profitability and cash flow.
Set clear goals and objectives and track progress towards achieving them.
Q: What are some strategies for retaining customers?
Provide excellent customer service and personalized attention.
Offer loyalty programs and incentives for repeat business.
Stay in touch with customers through email newsletters or social media.
Ask for feedback and respond promptly to complaints or concerns.
Continuously improve and evolve your offerings to meet the needs of your customers.