Why Service Divisions Are the Future of Commercial Roofing
The commercial roofing industry is evolving, and one of the biggest shifts in recent years has been the growing importance of service divisions. Traditionally, roofing companies focused on re-roofing and large-scale projects, but an increasing number of contractors are recognizing the long-term value of offering service and maintenance programs.
A well-structured service division can provide recurring revenue, stronger client relationships, and a higher overall business valuation. Unlike new installations, which often involve competitive bidding and fluctuating materials costs, service contracts create steady, predictable income. In fact, companies with recurring service revenue often receive higher valuations—sometimes three to five times their annual service revenue, compared to the industry standard of half the annual revenue for re-roofing companies.
Beyond profitability, service divisions play a crucial role in customer retention and lead generation. A contractor who provides routine inspections and maintenance is more likely to be the first call when a client needs a full replacement. Additionally, having consistent touchpoints with clients helps build trust and establish long-term business relationships.
The demand for service offerings skyrocketed during the COVID-19 pandemic when material shortages and budget constraints forced companies to rethink their approach. Many roofing businesses that previously overlooked service were forced to pivot, recognizing that offering maintenance programs could sustain revenue during economic downturns.
A study from the National Roofing Contractors Association (NRCA) found that proactive maintenance can extend a commercial roof’s lifespan by up to 50%—a major selling point for clients looking to reduce long-term costs. Additionally, a report from the International Facility Management Association (IFMA) indicates that preventative maintenance can cut emergency repair costs by up to 40%, reinforcing the financial benefits of a well-managed service program.
For contractors looking to scale their service departments, a structured approach is necessary. Building clear processes, hiring the right team, and leveraging technology for data tracking and reporting are key components of a successful service operation. Many roofing businesses have found that integrating technology, such as CRM software, helps streamline operations and improve efficiency, reducing the time spent on manual tasks.
In an industry where competition is fierce, diversifying revenue streams through service divisions is no longer just an option—it’s a necessity. Whether your business is just starting to explore service offerings or looking to expand an existing department, the key to success lies in consistent execution, data-driven decision-making, and a commitment to delivering long-term value to clients.
