The remodeling industry has a growing problem on its hands that must be addressed immediately.
6 Marketing Tips for the New Remodeling Climate
It's out with the old and in with the new ways of marketing if you're going to survive. These remodelers lead the way.
The holiday season of 2008 was anything but jolly for Robin Burrill's remodeling business, Curb Appeal Renovations. Around Thanksgiving, prospects' phone inquiries to the Keller, Texas, company stopped cold. In December, the situation worsened.
"We had several hundred thousand dollars worth of work canceled just before Christmas," she recalls. "All of a sudden, we had nothing on our books."
Burrill and her husband and business partner, Rob Mathews, realized that the economic meltdown impacting their business demanded an unprecedented response. To keep alive what had been a successful business just months before, the couple would have to change some of their business practices — particularly in sales and marketing. The new focus saved the business.
While not every situation is so dramatic, just about every home remodeling firm has had to weather difficult times over the past year. Most remodelers are also finding that familiar marketing efforts are not reaping the rewards of a couple of years ago. Many clients and prospects that have been accustomed to steadily rising home prices and were eager to invest in home remodeling projects question whether they can make back these investments when they sell their homes. Homeowners have other motivations for remodeling post-recession, and remodelers have to adjust to this new business climate.
Several companies recently shared some of their revamped marketing strategies with Professional Remodeler. Here is some of their advice:
Most customers simply can't afford to spend what they could a few years ago on their homes. Those $100,000 contracts are few and far between. The typical remodeler has no choice but to take on less lucrative assignments and make the most of their time. For most, that means rolling up the sleeves and working harder.
Working longer hours and making contact with more prospects sparked a turnaround for Curb Appeal. "Since the year started so poorly, we started doing more home visits," Burrill says. Some prospects that they would have weeded out in the past because the project would have been too small were now in play.
She and her husband hadn't previously made many home visits on weekends and nights, but that also changed. "We even met with a couple on New Year's Eve and again on New Year's Day," she says. The prospects appreciated the couple's willingness to meet during a holiday, and the effort paid off with a contract.
The amped up volume of sales calls got the company back on track. "By the end of January, we had about $200,000 on the books," Burrill says.
In remodeling, the objective of marketing is to stimulate people's interest in home projects, says small business consultant Dave Yoho (www.daveyoho.com). The Internet provides multiple vehicles to do that. In addition to your own Web site, Yoho says social networking sites such as Facebook; the multimedia sharing site YouTube; and even publishing and distributing informational books electronically can be useful tools.
"If your prospects are between 25 and 45, chances are pretty good that they're computer savvy and are better informed about what you do than customers were 10 to 15 years ago," Yoho says. These prospects want to find out as much as they can about that home improvement project of their dreams.
To help promote client firms that specialize in weatherization and window replacement, Yoho wrote a book, "Why buy replacement windows?" which is also available in e-book form and on CD as an audio book. The book is free, and the Web site (windowhelpbook.com) collects contact information from those who order it. Those leads are then distributed to a window replacement specialist closest to the person who made the order. Yoho has also created and posted a short video about replacement windows on YouTube to promote the Web site.
These new methods of reaching prospects make their appeals in ways in which people have become increasingly comfortable. "You have to appeal to people at their level, not your level," Yoho says.
That sentiment is why Amie Riggs Swarts, vice president of sales and marketing for Riggs Construction & Design of Kirkwood, Mo., pushed hard to get her family-owned business to spend money on a revamped Web site. With revenue down due to the dismal economy, it was a battle to get the OK.
"The Web is how people find things today," she says. "When they sit down in front of the computer at 10 p.m. after they've gotten the kids to bed, they are not going to call Riggs Construction." That's why the site has a new feature, a contact form for people to request a call back from the company. "It's remarkable how many contact form submissions we are now getting at night," she says.
Reputation counts for a lot in the remodeling business. Some remodelers have moved ahead with plans to polish their image — even though money for such efforts is tight — because it's a critical issue.
Riggs Construction & Design reached its 50th year in business in 2009 and flaunted this milestone in its marketing. The anniversary campaign included a redesigned logo featuring "50 years" and pushed its longevity and tradition of service in its promotional materials.
The highlight of the campaign was a lavish anniversary party that drew 150 guests, including local luminaries. "We even received a proclamation from the city of Kirkwood," says Riggs.
Another key component of the campaign was the creation of yard signs reading: "I said, 'Yes I can' to remodeling with Riggs." Many customers allowed the company to post them on their property.
"You couldn't drive around the area without seeing a Riggs sign," Riggs says. The signs cost about $1,600 and were money well spent, she says. The objective to this type of marketing is brand building and does not usually translate into immediate sales, but is still worthwhile, she says.
Sun Design Remodeling Specialists of Burke, Va., decided that 2009 was the year to project a new image. The company didn't feel that it was strongly presenting a key strength: its staff of designers.
"We started a major re-branding to look more like a design/build company," says Bob Gallagher, Sun Design's COO. "That has helped a lot to keep up our project size."
The effort includes a new logo that appears on all print materials, signs and the company's vehicle fleet. A redesigned Web site and print advertising will reflect a more artistic look, Gallagher says. The objective is to position the company to appeal to clientele that can afford Sun Design's full breadth of services.
Located near Washington, D.C., the company's customer base includes many federal government workers and contractors who have not felt the pain of the recession as acutely as have people in other parts of the country. That's why the company can continue to target higher-end projects.
Getting out into the business community and schmoozing is a time-honored way to boost visibility, meet new prospects and create more sales. Some firms let this productive marketing strategy slide when business was booming, but have re-embraced it over the past year.
"I try to do three networking events outside of the industry per week," says Ben Thompson, president of Thompson Remodeling in Grand Rapids, Mich. These events include local CEO roundtables, a family business group that has helped generate $350,000 worth of leads in 2009 and a local "medical mile" resource group in the health care industry. Such an ambitious networking schedule demands effective time management, Thompson says. The pace he is setting leaves little time for NARI or other industry events that he used to attend in the past.
Thompson has also been networking through the local AIA chapter with a few select interior designers and architecture firms, and this effort is paying off. "We're now doing some $150,000 to $200,000 additions that we hadn't done before," he says.
Burrill also has the networking bug. "I'm going to every possible event that I can," she says. These include a local weekly group similar to Business Networking International (BNI) and not only her local chamber of commerce but also a neighboring one. She also recently joined the city of Keller Public Arts Council. All of these efforts raise the company's profile.
"If you are not branding and making sure the community knows who you are, in five to 10 years you're not going to be around," she explains.
Marketing strategies such as networking cast a wide net, and may take months or years to pay off. More targeted strategies such as homing in on your most promising market segments can yield dividends faster.
"We've been focusing on homes that have been around for 25 to 35 years," Gallagher says. The firm's geographic area includes many newer homes, but owners of those are less likely to commit to a major remodeling project. The company makes sure that its marketing outreach — mailings, advertising and invitations to events — thoroughly covers neighborhoods with homes in the desired age range.
Much older homes are a promising segment for Riggs Construction, and the company has made a concerted effort to woo owners of the stately mid-19th Century structures found in its area. Riggs is touting its EPA certification to remove lead paint to this clientele.
Homeowners who are a little skittish about opening their checkbooks for a remodeling project can be persuaded to stretch their budgets, given the right approach. Presenting multiple options with graphic aids is invaluable.
"If you help people visualize what they want, they will up sell themselves," Thompson says. Many times, presenting an option on the low end of the price scale and showing what can be added to enhance this option will inspire the customer to say "yes" to additional choices.
This is a new approach for Thompson Remodeling. In the past, customers would often respond well to a single design within a desired price range, but the company, like many others, is finding that what used to work doesn't resonate as well with today's post-recession client.