ServiceTitan’s roofing industry report identifies challenges; Guardian Roofing shows how to combat them

Matt Swanson sat with a panel of speakers at 7:45 a.m. on the final day of the 2024 International Roofing Expo (IRE) conference in Las Vegas, and looked out into the crowd.

“There were a few green faces,” Swanson recalled with a laugh. “Most people had already left the conference.”

Swanson and his fellow panelists discussed how to win roofing sales and maximize the customer journey—a topic Swanson knows very well. He and his wife, Lori, started Guardian Roofing in the Seattle area in 2005, and have since turned it into one of the largest residential roofing shops in the country.

“(But during the Q&A portion), most people wanted to learn how to get more leads and how quickly they can get to a sale,” Matt said. “And I get it, it's super important. 

“But what about how to get the work done and how to make your customer happy?”

Swanson’s message—focusing on the customer—was also at the heart of the findings in ServiceTitan’s 2024 Exterior Trades Contractor Market Report. The report surveyed more than 1,000 exterior trade contractors across the U.S. on their growth expectations and industry outlook for 2024.

According to the report, exterior contractors see customer acquisition as the main avenue to boosting revenue this year, and will focus their marketing on: 

• Reputation (71%)

• Homeowner experience (58%)

• Quality workmanship (54%)

Guardian utilizes ServiceTitan to aid with all of the above and more. But while 2023 saw the company nearly hit the $30 million revenue mark, it was still a challenging year for Guardian and the roofing sector as a whole. In 2024, the report’s findings show that exterior contractors are concerned about:

• Staffing (57%) 

• Overhead expenses (56%)

• Rising material prices (56%)

“There's macro and micro issues,” Lori said. “The macro was obviously the economy, the interest rates, the inflation, and a demand shift because the pandemic pulled forward a bunch of work.

“So how do you continue to grow when there's all of a sudden a lack of demand in the market?” 

This is what Guardian did and how it fits with the industry trends.

Weathering the storm

When the Swansons look at their 2023 numbers in ServiceTitan, they see a strong start, a dip, a plateau, and a strong finish.

“I call it a smile, because we came back at the end of the year,” Lori said.

“It sure wasn’t feeling like a smile in the middle of the year,” Matt laughed.

This trend can be attributed to multiple factors. The Swansons had braced themselves for the pandemic ripple effect, which saw many customers pour money into servicing their homes from 2020-2022—work that led to back-to-back record-breaking revenue years at Guardian.

“We knew (those ripple effects) were coming,” Lori said. “But we didn't anticipate the (2023) macro factors like interest rates and inflation.”

There was also the micro factor of weather. The Pacific Northwest is known for its rainy winters and springs—which is great for a roofing shop like Guardian.

“But last year, we didn't have rain from April until October in Washington,” Lori said.

All of those factors led to stress and pressure to prevent layoffs. So how did they combat it? 

Guardian Roofing expanded its territory from 2021 to 2023, and added services such as gutters and insulation. Those actions lined up with ServiceTitan’s industry report, where contractors see remodeling (47%), expanding to new locations (34%), and offering new services (32%) as the biggest growth opportunities. 

The moves Guardian made leading up to and during 2023 stunted the macro and micro factors. As for the strong finish to end the year that created a smile?

“The rain kicked in in October,” Matt said. “And it didn't stop.”

Technology is the future

Expanding coverage and offering new services wouldn’t have worked if Guardian didn’t put a high priority on one critical aspect: reputation.

“Your reviews are everything,” Lori said.

“There's a range,” Matt added. “You can be a 4.5- to a 5-star shop. But if you're down in the low fours or 3.9, you have so much profit to gain in the business by just getting better at what you're doing rather than trying to grow what you already have.”

Guardian utilizes Marketing Pro to take control of its online reputation, leading to more reviews, consistent listings, and an ability to manage reviews from one place to gain deeper insights into its customers, technicians, and jobs. 

Nowadays, a strong reputation doesn’t just attract new roofing customers. It could also attract a buyer. 

The recent increase of private equity (PE) involvement in roofing is similar to what the HVAC sector experienced 10 years ago. According to the ServiceTitan industry report, with the rising interest from PE in the roofing sector, contractors who secure investor capital could increase their financial security, expand their operations and become increasingly competitive.

The Swansons have certainly noticed the trend.

“My inbox was full (of PE inquiries) for a solid year, all of 2022,” Lori said, adding that Guardian has already had a PE partnership for many years.

“We had a private equity partner before it was cool,” Matt said with a laugh.

“It's going to be interesting to watch,” Lori said. “We're not in any way going to sell anytime soon, so (we’ll see) how it affects us. We have really close relationships with suppliers, but I don't know if they'll get leveraged (by PE groups).”

According to the report, roofing contractors who want to to sell for high exit multiples should keep in mind that buyers look at:

• Reputation

• Marketing capabilities

• Transparent and reliable financial data

• The ability to scale

As acquisitions increase in the roofing sector, technology emerges as a must-have for successful PE engagement. Implementing digital tools, controlling data, and adopting scalable workflows are essential for contractors who want to compete for investment funds and get acquired or sell their business.

“With technology…I think what took us 18 years is going to take someone five,” Lori said. “Because you have real-time information, your KPIs, you can make quick decisions, you can pivot, you can see what marketing is working.

“If we would've had the same technology we have now (compared) to when we started, everything would've looked a lot different.”