Majority of Contractors Report Stable or Rising Revenue in ServiceTitan's 2025 Commercial Service Market Survey

Core Insights - The Commercial Service Market Report by ServiceTitan indicates that 66% of commercial contractors entered 2025 with stable or growing revenues despite challenges such as skilled labor shortages, rising costs, and longer material lead times [1][2][4] - Optimism remains prevalent in the market, with 53% of contractors expressing a positive outlook [1] - Key operational challenges include access to warranty data, parts availability, and service history retrieval, which could hinder contractors' performance [3] Revenue and Profitability - 39% of contractors are focused on increasing net profit margins and optimizing existing processes due to rising costs [2] - Nearly three-quarters (73%) of contractors expect material costs to rise, with 54% anticipating lead times to increase by two weeks or more [4] - 59% of contractors are concerned that rising costs will significantly impact profitability [4] Technology and Cash Flow Management - Technology adoption is crucial for safeguarding profits, with contractors averaging two days to issue invoices but taking 28 days to receive payments [5] - The top payment collection methods include ACH (37%), checks (30%), and credit cards (14%) [5] Customer Relationship Management - Repeat customers (65%) and word-of-mouth referrals (60%) are primary revenue drivers for contractors [6] - 70% of contractors utilize CRM systems, with goals focused on increasing customer retention, lead conversions, and close rates [6] Preventative Maintenance Agreements - 63% of contractors report that over half of their customer base is secured through PMAs, contributing to additional revenue from pull-through work [7] AI and Digital Transformation - 39% of contractors recognize the potential of AI, indicating a readiness to adopt AI capabilities [8] - 44% of contractors see improving customer experience through online portals as extremely important, although only 26% use these portals for direct communication [9]