The remodeling industry has a growing problem on its hands that must be addressed immediately.
The Perfect Time to Grow Market Share
Professional Remodeler columnist Bruce Case Explains Why Remodelers Need to Grab Market Share Now
If your sales have shrunk by 50 percent in the last 6 months, are you a bad business person? It depends. How many remodeling projects are being done in your service area within that niche? Have the total available opportunities for remodeling also shrunk by 50 percent?
This is called market share, and it really matters. Market share is determined by dividing the number of your company's projects by the total number of projects done by all homeowners in your target market, i.e. kitchens and bathrooms for upper-middle-class households. Market share tells you what percentage of the total market you have captured.
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It seems sort of philosophical to bring all this up now when we are all fighting for the same jobs, dancing with the temptations to lower margins and trying to hold on to our team members. We should be beating the streets, trying to get every nickel we can and not worrying about data crunching or statistical analysis, right?
But now is precisely the right time to bring this up. Now is the time to gain market share on our competitors so we can help pay the bills in the short term. Competitors have cut back on their marketing budgets, our team members are more eager to participate in their communities (think home shows, parades, seminars, etc.) and we need to be as competitive as possible.
In the mid-term and long-term, market share will rocket our business to new heights. In the short-term, there is less demand for remodeling. Regardless of how much market share we garner we are still shrinking. In the long term when the economy bounces back, any increases in market share we gain now will multiply our revenue exponentially as the pool of remodeling demand grows.
Cash and corporate energy is tight. So if you buy into this concept of market share, what can you do about it? Here's a sampling of our initiatives:
- We spend some of our marketing budget on branding. These efforts, which typically are spent on more traditional forms of marketing (radio, print advertising, etc.), are not expected to generate direct leads. With these we want to build our brand; we want to plant the seeds that grow into future market share.
- We spend some of our marketing budget on lead generation. These efforts have evolved as traditional marketing avenues have proven ineffective for lead generation. Today, our efforts include home shows, community events, open houses, seminars and, of course, past clients and referrals.
- We want to hear how we are doing in the eyes of our customers and potential customers. We have surveyed past clients for many years. Three to four years ago we stepped up these efforts by investing in a third-party surveying firm to gather the feedback of our past clients and give it back to us in easily understood and indexed forms. About three months ago, we started surveying leads as well — clients who have not proceeded. It is not to try to change their minds; it is because we are committed to gaining market share. We want to know if we left a good impression even through they did not proceed with Case.
- A focus on market share means a focus on clients, not on projects. Our handyman services give us the ability to get our foot in the door with a prospective client, show our worth and earn that client for life. Our breadth of services (handyman, kitchens, baths, remodeling, design/build) gives us the ability to capture the majority of remodeling dollars spent by that client, assuming we exemplify excellence each step of the way.
We are constantly fighting for market share. With more market share, we have more of a base of clients. With more clients we are more stable. With stability comes more income potential — short-, medium- and long-term — for our entire Case team. All that means our business is truly a business; it has a brand, and it is valuable because of the awareness customers have about it.
Give your input and continue the dialogue on Bruce's blog at www.housingzone.com/brucecase.
|Bruce Case is president of Case Design/Remodeling and COO of Case's national franchise organization, Case Handyman & Remodeling. He can be reached at email@example.com.|