2016: The Year of the Personal Services Economy

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:: By Jon Zimmerman, Front Desk ::


The outlook for small and medium-sized businesses in 2016 is bright—especially for those providing personal services.

Nearly 5 million SMBs specialize in selling services, and consumers are buying. A lot. Economists at Pierpont Securities have noted that services make up two-thirds of U.S. consumer spending and that consumers with disposable income are more likely to spend it on services rather than goods.

Even with a strong economic landscape, businesses can’t just sit and wait for customers to come to them. SMBs must be proactive. The first step is improving efficiency. In the past, software for service SMBs have missed the mark on being a comprehensive and efficient solution. To take full advantage of the economic upswing, personal service businesses need to consider these emerging trends in 2016. 

1) Millennials Have Spoken: “Go Mobile, or Go Home!”

Millennials are part of a society that has come to expect instantaneous access, live assistance and information at their fingertips, which means easy to navigate info or live access to companies. And the business community is feeling the pressure to improve agility to match this speed of life, which means being mobile.

Millennial influence is only going to increase, so SMBs must adapt and ensure their customer engagement strategy aligns with their consumers’ expectations. BIA/Kelsey found returning customers spend 67 percent more than new ones, proving the importance of engaging millennials to develop repeat business. Fortunately, existing technology allows SMBs to do just that through intuitive, mobile-based business management solutions.

Business management tools streamline daily client activities by enhancing mobile operations.  Mobility allows business owners to manage anything, anywhere, anytime. By maximizing efficiency and maintaining customer service responsiveness, businesses can keep pace with the millennial-on-the-go. You can expect to see SMBs further relying on mobile solutions to manage internal operational tasks, backend customer relationship management (CRM) and marketing. 

2) Business Automation Will Increase SMB Customer Retention 

We all know effective customer interactions are one of the most important aspects of the personal services economy. What’s notable is the changing nature and speed of these interactions. Though in-person connections are still essential, engagement now extends to a variety of digital channels for scheduling, appointment reminders, help desks, invoicing and more.

The ability to communicate quickly is important given today’s ‘instant gratification’ mindset. Automated messaging allows businesses to check in with customers in a non-intrusive way.   Customers can respond when it’s convenient for them. Done well, quick responsiveness meets the consumer's expectations and instills a positive impression of the business. You can achieve all of this without sacrificing valuable personnel resources. 

As these real-time interactions come to be expected, SMBs that lag in adoption risk losing customers. Whether due to proactive and savvy competitors or simple customer dissatisfaction, one thing is clear: as customer expectations raise, retention will become a leading concern for businesses that fail to measure up.

3) Some Relief for Budget Challenges 

The ability of technology solutions to add value will be on display as much behind the scenes as on the front lines. As the cost of doing business continues to mount, turning a profit becomes more and more challenging every year. Rising hourly wages and overhead costs can haunt SMBs. Investing in tools to identify and remove inefficiencies can offset these issues. 

Just as technology will boost revenue by improving customer acquisition and retention, it will also help offset costs by improving efficiency. By automating critical business activities, owners can save both money and human capital associated with these streamlined processes. 

It seems like every New Year someone declares it will be ‘the year of <insert technology>’ in business. As tempting as those grand predictions are—and there are many examples —to insert one here would overlook the obvious. Whatever new, improved tools come along, businesses of all sizes must effectively implement and customize them to ensure they mesh as seamlessly as possible with their existing business. It sounds obvious, but operational efficiency is often easier said than done. 

Fortunately, these obstacles are crumbling quickly as management tools become easier, both to install and use. With the latest wave of improvements and increased access to solutions that directly address modern business challenges, service-based SMBs are primed for success like never before. 


Author Bio 

Jon Zimmerman is the CEO and a co-founder of Front Desk. Before Front Desk, Jon developed management systems for United and KLM, led teams to support marketing and pricing at Expedia and T-Mobile, and co-founded L1, a quantitative hedge fund.

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