Home Service Businesses in the US

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Home Service Businesses in the US

Key Takeaways

  • The US CRM software market specifically for home services businesses can be valued at $3.2 billion, based on the number of home services organizations in the country, their current use of CRM software/features and available data on the user-specific pricing of these systems.
  • More conservatively, this industry can be sized at a minimum of $381 million, per the current scale of the overall CRM system industry in the country, and the relative share of home services customers within this market.
  • Both the CRM software market as a whole as well as the segment that caters specifically to home services customers appear to be relatively small in terms of the number of businesses (2,498 overall, less than 100 focused on home services) and total employment (97,980 overall, nearly 1,000 for home services).
  • However, the adoption of CRM software among home services businesses is poised for continued, rapid expansion, as COVID-19 has increased consumer expectations for a "seamless, transparent, digital experience" with these businesses, and home services companies seek opportunities to "look more professional" in their interactions with consumers.

Introduction

The research team has provided estimates for the market size, total number of businesses and total number of employees within the US CRM software market specifically for home services. In determining the size of this industry, the research team took the additional step of providing both a top-down and bottom-up triangulation, to offer a conservative as well as a more aggressive estimate for the scale of this market. Additionally, the research team has included an overview of the market's forecasted expansion and growth drivers, alongside relevant data (as available) related to historic changes in the total number of participating businesses and total employment in this industry. Notably, information specific to the US CRM software industry for home services is extremely limited in the public domain. In particular, there are currently no pre-compiled, quantitative metrics related to the scale of this niche sector. As such, the research team leveraged available information from market researchers, key players in this industry, US government agencies and media reporting to curate the most credible, comprehensive picture of this industry, as possible.

Market Size — Bottom-Up Estimate

  • The US CRM software market specifically for home services can be valued at $3.2 billion, based on the number of home services businesses in the country, their current use of CRM software/features and available data on the user-specific pricing of these systems.
  • As of 2021, there were currently 2.7 million home services businesses operating in America, according to home services company Angi.
  • Notably, a 2019 survey by CRM system provider Jobber revealed that at least 63% of these organizations use software to perform core CRM system functions such as creating and sending quotes to customers.
  • CRM system provider Keap adds that the "most popular" CRM system among its over 125,000 home services customers in the US is priced at $159 per month.
  • By leveraging the preceding data points, it can be estimated that at least 63% of America's 2.7 million home services businesses use some form of CRM system/functionality, at an average price of approximately $159 per month.
  • This triangulation yields a total market size of $3.2 billion. The calculation for this figure is available in the Research Strategy section below for review as desired.

Market Size — Top-Down Estimate

  • More conservatively, the US CRM software market for home services can be estimated at a minimum of $381 million, per the current size of the overall CRM system industry in the country, the portion of CRM customers who are part of the US services industry and the relative scale of the home services market.
  • As of 2021, the US CRM software market was valued at $42.9 billion, according to market researcher IBISWorld.
  • Separately, software selection tool SelectHub found in its current survey of CRM software buyers that services companies comprise the single largest category of CRM customers in the country, at 32% of buyers.
  • Meanwhile, the home services sub-sector represented $500 billion of the $18 trillion US services industry, according to Angi and the US Census Bureau.
  • By leveraging the preceding data points, it can be estimated that 32% of the $42.9 billion CRM software market is attributable to services businesses, and that the home services sub-sector represented $500 billion of this $18 trillion industry.
  • This triangulation yields a total market size of $381 million. The calculation for this figure is available in the Research Strategy section below for review as desired.

Total Businesses

  • Following the logic of this top-down triangulation, it can be estimated that there are less than 100 CRM software businesses that specifically cater to the home services sector in the US. This estimate reflects the total number of CRM system providers in the country, as well as the relative portion of CRM software sales that can be attributed to US home services customers.
  • As of 2021, there were 2,498 CRM system providers in America, per IBISWorld.
  • By using this figure on the number of CRM system providers alongside the data points leveraged in the preceding top-down market size calculation, it can be estimated that 32% of the 2,498 CRM system providers in America cater to home services customers, and that roughly 2.8% (or $500 billion of this $18 trillion industry) of these software providers specifically target home services customers.
  • This triangulation yields a total business count of less than 100. The calculation for this figure is available in the Research Strategy section below for review as desired.

Total Employment

  • Using a similar methodology, it can be estimated that approximately 1,000 individuals are employed by CRM software companies that specifically cater to home services businesses in the US.
  • Notably, IBISWorld reports that 97,980 individuals were employed by CRM system providers in the US as of 2021.
  • Leveraging this IBISWorld figure alongside the previously stated data about the CRM industry and the relative share of home services users, it can be estimated that CRM software companies that cater to home services customers employed just shy of 1,000 individuals. The calculation for this figure is available in the Research Strategy section below for review as desired.

Market Growth

  • The home and other services segment of the CRM system industry has grown considerably over the past six years, from representing 10% of the US CRM market in 2015 to 32% of industry sales at present.
  • Moreover, as home services users grew to represent a larger share of the CRM marketplace, the industry as a whole expanded at a rate of 15.0% per year on average between 2016 and 2021.
  • Moving forward through 2021, IBISWorld forecasts that the CRM software market will continue to expand by 4.6% annually.
  • Specifically for the home services segment, CRM software provider Jobber states within its April 2021 Home Service Economic Report that the adoption of such technology among home services professionals will continue to "increase" and remain "important even as COVID-19 restrictions disappear."
  • As evidence of the accelerating adoption of CRM systems among home services customers, Jobber highlighted the substantial uptick in CRM software-related activities among these users through the first quarter of 2021.
  • For example, customer work and visit-related communications by home services companies through software systems spiked by 103% and 47%, respectively, on a year-over-year basis as of March 2021, setting new records within the industry.

Market Drivers

  • Jobber reports that one of the most significant drivers of CRM system adoption within the home services industry has been the coronavirus outbreak, which resulted in restrictions that "forced" these businesses to "evolve how they work in order to keep up with changing customer behavior and expectations."
  • Even though concerns over the pandemic have eased, COVID-19 has had a lasting impact on consumer expectations for a "seamless, transparent, digital experience" from home services providers, and has therefore continued to propel this sector's momentum towards technology solutions such as CRM software.
  • Outside of the pandemic, another key force behind the adoption of CRM software by home services providers has been the desire to "look more professional" in their interactions with customers.
  • A separate 2019 survey of home services companies found that just over half (51%) of these businesses invest in CRM software and other technology systems with this specific goal in mind.
  • Several home services businesses provided personal commentary related to how CRM systems improve their image with clients:
    • Henry Sanchez, Valor Plumbing: "When somebody sees automated texts when you’re on the way, it looks like you’re running a serious operation, even if you’re running out of your home. We’ve had customers comment on that, especially the younger ones. The more professional you appear the more people will be inclined to want to use your service and want to refer you."
    • Chris Senger, Mow Town Edmonton: "We can have a new customer completely set up in our system before we are off the phone with them. Customers have been impressed by this because the organization on our side translates to assurance for them that we are professionals."
  • Unsurprisingly, the marketing materials of CRM software companies including JobNimbus and Jobber are leaning into this trend, by promising that their CRM systems will help home services providers "appear more professional" and "impress your customers."

Historic Changes in Total Businesses & Employment

  • Although there is no publicly available, pre-compiled data on the historic number of businesses or employed individuals within the US CRM software industry for home services, relevant data on the larger CRM software market suggests that both of these figures have expanded over the last 5 to 10 years.
  • In terms of CRM business growth, IBISWorld reports that the number of CRM system providers in America has expanded by 27.7% per year for the last five years (2016 to 2021), and grown by a CAGR of 22.5% over the last 10 years.
  • In tandem, the number of individuals employed by the industry has increased at a slightly lower rate of 18.1% per year over the past five years, and 18.5% annually since 2011.
  • Considering that the home and other services segment of the CRM system industry has expanded considerably over the same period (from representing 10% of the CRM market in the US in 2015 to 32% of the industry at present), it is reasonable to surmise that CRM system companies that cater to home services customers have expanded at a similar or greater rate in terms of business number and employment.

Research Strategy

An exhaustive research process confirmed that information specific to the US CRM software industry for home services is extremely limited in the public domain. In particular, there are currently no pre-compiled, quantitative metrics related to the scale of this niche sector. However, the research team was able to leverage publicly available data from market researchers (e.g., IBISWorld), key players in the CRM industry (e.g., Keap, Jobber), participants in the home services market (e.g., Angi), US government agencies (e.g., US Census Bureau) and media reporting (e.g., Software Advice, SelectHub) to triangulate estimates for the market size, total number of businesses and total employment within this industry, as well as to provide insight into its growth trajectory and drivers. Although no information was available related to historic changes in the number of businesses and total employment within the US CRM software industry for home services, the research team included relevant data points, as available.

Meanwhile, the calculations for the aforementioned estimates are as follows:
  • Market Size — Bottom-Up Estimate: 2,700,000 home services businesses * at least 63% using some form of CRM system/functionality * average price of approximately $159 per month* 12 months in a year = $3,245,508,000.
  • Market Size — Top-Down Estimate: $42,900,000,000 CRM software market * 32% of revenue is attributable to services businesses * the portion of the services industry that is home services ($500,000,000,000 / $18,000,000,000) = $381,333,333.
  • Total Businesses: 2,498 CRM system providers in America * 32% of providers that specifically cater to services customers * the portion of the services industry that is home services ($500,000,000,000 / $18,000,000,000) = 22.
  • Total Employment: 97,980 individuals employed by CRM system providers in America * 32% of providers that specifically cater to services customers * the portion of the services industry that is home services ($500,000,000,000 / $18,000,000,000) = 878.

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