How to Expand Your Market Potential

This week on ‘Ask the Experts,’ an HVAC Contractor in Connecticut asked:

“I’m looking to branch into other geographic areas, so I need to know how to expand my market potential?”

Contractor University member Drew Cameron started by explaining that there needs to be a good reason for a business to want to expand geographically. One should not assume that because their service territory is larger, they will make more money, and it could actually be an added drain on expenses when weighing factors like gas and equipment shipping.

“If you don’t have 15% market share in your current geographical market, than you have some work to do,” said Cameron. “Why do you want to drive further when you have opportunity in your backyard to take advantage of?”

Cameron then asked a separate follow-up question: why would you want to expand geographically if you can expand into another channel of service, be that electrical, plumbing or otherwise?

Cameron reasons that contractors need to really think about how they can make their businesses more profitable in the most practical ways possible, and if your business already has a solid customer base, why do you want to go outside of that to customers that don’t know your brand yet?. “If people are already doing business with me, then why do I have to go ahead and convince other people to do business with me?” asked Cameron.

Then Cameron moved on to the question of where a business is expanding into. He suggested conducting market research on your current customer base in order to find new geographic territories that have matching customer profiles.

However, reaching those customer profiles in a new market can present its own set of challenges as well. “If you go to an expensive broadcast media market, for television or radio or even cost-per-click, it may be cost prohibitive,” said Cameron.

Our faculty members have also answered questions on other related topics, including Online Marketing for HVAC Contractors and How Much Should I Spend on Marketing?

Hear more from our “Ask The Experts” faculty members on “Cracking The Code,” our weekly web series.

Contractor University members can click here to log in to their member dashboard and submit a question through the Ask the Expert portal.