The remodeling industry has a growing problem on its hands that must be addressed immediately.
Selling the Difference
Why me? What did I do to deserve this? Sometimes, as with accident or illness, these questions have no answers. But they're still worth asking after each business success or failure: Although life delivers unavoidable situations, luck is not a viable business strategy. Creating a steady stream of qualified leads and closing profitable jobs requires two things: providing products and services wo...
Why me? What did I do to deserve this? Sometimes, as with accident or illness, these questions have no answers. But they're still worth asking after each business success or failure: Although life delivers unavoidable situations, luck is not a viable business strategy.
Creating a steady stream of qualified leads and closing profitable jobs requires two things: providing products and services worth buying and communicating that value to the customer. Communicating your value may seem the more difficult task, especially in a business populated by hands-on doers who may or may not be smooth talkers. However, good sales and marketing aren't built on spiels but on thoughtful verbal, written and visual communication and action that show customers how good you are as well as telling them so.
Sunvek’s sales team includes sunroom sales manager Gabriele Assour, sunroom sales consultant Jim Larcher, remodeling sales manager Chuck Clemens, project coordinator William Crowley and vice president Dave Reinert. Photo: © Edward McCain
Full-service remodeling firm Sunvek is celebrating 20 years in business in Phoenix, a lively market that saw a 36 percent increase in remodeling permit activity from 2002 to 2003. President Greg Donahue bought Sunvek in 1994, when the company provided HVAC installation and service, roofing replacement and repair, and general remodeling. Since than he has added countertop and cabinetry manufacturing and installation, installed services for Home Depot and a sunroom division. With 100 employees, Sunvek plans to hit $12.5 million in sales this year.
"In our marketplace, there are more and more competitors all the time," says Donahue. "The little guys are always there, but when I bought the company, Home Depot basically did not exist as an installation vendor for the public. They've become a big competitor of ours, especially in kitchen and bath remove and replace jobs that don't involve moving walls or changing plumbing."
The strength of Sunvek's "need" business — roofing and HVAC work — carried the firm through the post-Sept. 11 tough times. Now that the firm is in growth mode, both Donahue and director of marketing Nancy Ozga want Sunvek to be in the best possible position to sell remodeling to consumers who are back in the "want" mode.
Their long list of answers to the "Why me?" question (more like "Why us?") makes for instructive reading on setting your company apart — and above — the rest.
“We’ve had experience with guys that have come out of the trades to do sales, who are very personable but had a tendency to get too technical. They talked their way out of sales as opposed to closing sales.” — Greg Donahue
Remodelers know the difference between a job done by a professional remodeling firm and the work done by "a guy" who works weekends, only takes cash and doesn't return phone calls. Homeowners don't, unless they've already worked with both types. Even so, some customers are willing to put up with delays and poor communication in exchange for a significantly lower price.
Your sales job is not simply to tell them that it is an unacceptable trade-off but to prove it. When you ask "Why me?" the answers should include:
- Meeting all state and local licensing and bonding requirements. Hang licenses and proof of bond in your office; give salespeople copies. Some remodelers put their actual license numbers on business cards, letterhead, advertising and direct mail pieces.
Sunvek's Web site lists its residential and commercial license numbers for general contracting, building, roofing, electrical, HVAC and plumbing.
"We use all the licenses that we have," says Ozga. "It's especially desirable to a homeowner that does an array of work with us."
- Having the necessary general liability and workers' comp coverage. Display these certificates and include proof of insurance in the presentation book. Homeowners may not have thought about the need for insurance.
- Offering a signed contract. Showing prospects a sample contract shows that this is a professional business transaction, and might make them think twice about moving ahead on "the guy's" handshake agreement or initialed scrap of paper.
- Ability to inform the consumer about right to recision, EPA lead standards and other remodeling basics. Taking the time to inform and educate makes you an advocate rather than an antagonist. Both NAHB and NARI sell brochures that explain to consumers how to choose a contractor and what to consider during the remodeling process.
Sunvek produces and distributes its own spiral-bound booklet, "The Homeowner's Survival Guide to Remodeling." Branded with the company logo, the book opens with a letter from Donahue. It includes a description of Sunvek's process, a list of steps for homeowners to take if living in the house while remodeling, answers to questions homeowners frequently ask and a list of Sunvek's own concerns (late payments, disrespectful language, homeowners working directly with trade contractors, etc.).
- Proof of successful past work. Before and after job pictures are a good start. So are copies of letters from satisfied customers. Even better: the ability to provide phone numbers of past clients who are willing to talk to prospects and even let them come over to look at the job.
- Warranty policy. Any kind of written warranty policy — on your services as well as your products — puts you a step ahead of the "guy."
“Everybody needs a roof and plumbing. Not everybody’s doing a $100,000 kitchen remodel. Clients range from lower middle class to high upper-middle class. It’s laborious to make marketing appealing to everybody.” — Nancy Ozga
Even if you make the case for the professional remodeler, your firm may not be the only established, reliable, quality firm in town. So ask again: why me?
Years in business: The higher this number, the better. Take advantage of milestone anniversaries to grab attention with a special anniversary logo and a public relations campaign. For Sunvek's 20th anniversary year, Ozga commissioned a logo that reads "1984–2004. 20 Years of Excellence. Sunvek." In addition to adding the logo to company vehicles, letterhead, contracts, invoices and advertising, she had stickers made to put on already printed materials.
"Many people, when they realize we've been in business for 20 years, that speaks volumes," says Donahue. "Coupled with the fact they have been referred, it provides a level of comfort."
Size of firm: No answer is the right one. The owners of a small firm may emphasize their hands-on management style and the personal attention given to clients. A big firm, however, might be able to claim the ability to schedule jobs sooner or complete them more quickly.
Specialized services: Some consumers, especially those with a clear picture of their "pain," want to see a specialist. Anyone with an HMO knows the story: It's frustrating to go through a primary care physician and an additional doctor's visit when it's absolutely clear that your foot is what hurts.
Niche offerings such as energy-efficient or green design and remodeling, universal design, accessibility services or historical renovation also make you stand out. Pointing to specific training and experience in these areas helps.
Full service: On the other hand, some homeowners want a little bit of this done, plus a bit of that, and maybe a whole lot more down the line. They want to establish a relationship with a company that can take care of all their needs now and in the future.
Sunvek strives to walk the line, emphasizing both its specialty work as well as its full-service capabilities.
"We are a multi-trade contractor," says Donahue. "We do our own plumbing, electrical, carpentry, drywall, painting and most of our own tile. We hang windows and doors, we manufacture as well as install cabinetry; we have our own laminate and solid surface shop." About all that gets subcontracted out is granite and concrete work, plus framing on large additions.
"We are the only kind of business in the valley that offers everything under one roof," seconds Ozga, who has been with the firm 15 years. "We are a one-stop shopping center. One call does it all."
Providing financing or in-house design services will also appeal to customers looking for one-stop shopping.
In-house field staff: Some homeowners feel that subcontractors don't care about the project and home as much as the employees of the firm they hired do.
"The most common comment we get from customers is that they like having our employees in their home as opposed to a bunch of subcontractors," says Donahue. "I think it's a sense of security, where they can leave us in their home and it will be taken care of, be respected. There is more attention to detail, to making the job run smoothly. You don't have finger pointing among the trades."
For Sunvek, that message of service and care ties in with the wide range of services. "The owners of the company before I bought it created a little jingle: 'Sunvek, we take care of you.' In essence, that's what we're trying to convey. You don't have to worry with Sunvek."
Community service: Service work demonstrates a firm's stability and commitment to the community, factors that can give you an edge against both weekend warriors and national retailers. Promote your good deeds to local news outlets.
Building on the "Extreme Home Makeover" craze, last fall Sunvek planned its own version by remodeling a residential center for adults with physical and developmental challenges. In one weekend, about 30 Sunvek employees and family members upgraded the living and dining area, kitchen, pantry and foyer. The work included replacing the popcorn ceiling; installing new cabinets, countertops, vinyl flooring and lighting; and painting walls and ceilings. Some suppliers donated or discounted materials.
The Scottsdale Republic, 101 North magazine, Scottsdale Airpark News and Scottsdale Views all picked up the story, with some of them tying it into a profile of Sunvek on its 20th anniversary. The project received television coverage as well, adds Donahue.
"We've gotten some leads from it," he says. "We're trying to tabulate if it will turn into business." Whether it does or not, "this was a perfect fit for us."
Though this large project cost an estimated $75,000 in time and materials that a smaller company couldn't afford, smaller efforts and contributions also make an impact.
Showroom: If you have a highly visible location, a showroom can be a marketing tool in and of itself, drawing in prospects and even convincing some to buy on the spot. But even if a prospect hasn't seen it, knowing you have a showroom can make a difference by appealing to a desire for convenience or a dislike of shopping. For some homeowners, half the fun of remodeling is driving all over town looking at different products during the design and selection process. Others will appreciate being able to do all their selections in one place at one time.
Sunvek's showroom, located on a side road, doesn't pull in a lot of drive-by traffic. Most sales calls take place at customers' homes, too, so the showroom serves as more of a design center, with samples of cabinets, tile, plumbing and countertops as well as vignettes.
Alliances with other brands: Never underestimate the power of brand. There's a reason why consumers think of tissue as Kleenex and copies as Xeroxes. When their minds head down the home-improvement track, big boxes with big budgets, big signs and big presence may be at the forefront.
If you can't beat them, join them. About 10 percent of Sunvek's revenue comes from installing countertops and cabinetry for Home Depot, according to Donahue.
Also, consider becoming a certified installer, fabricator or dealer for brand-name products with wide-spread consumer recognition and major corporate backing. In addition to fabricating and installing Samsung Staron solid surface countertops, Sunvek is a dealer for Temo Sunrooms and for KraftMaid Cabinetry.
Reward programs. Consumers have become accustomed to these kinds of programs through airlines' frequent flyer miles, hotel reward points, grocery store preferred card discounts and other such tactics. In remodeling, where the best business is usually repeat and referral business, a similar program can help to make your company a consistently preferred choice.
Implemented before Donahue bought the company, the Sunvek Homeowners' Plan, or SHOP program, offers customers the chance to acquire points that can be used to discount the cost of future projects.
It works like this: Five percent of the final cost of the job translates into SHOP dollars. After 30 days, those SHOP dollars can be used toward up to 25 percent of the cost of a new project. For example, a customer who paid $100,000 for an addition would receive $5,000 SHOP dollars. If she then wanted to do a $15,000 roofing project, $3,750 would come from the SHOP dollars.
Doing a program like this requires planning and budgeting for it, of course, to ensure that the deals don't eat into your company's own profit dollars.
"We calculate it as a marketing cost," says Donahue. "Early on when Sunvek got into trade areas other than roofing, it was a difficult transition. The SHOP program affords us the opportunity to get in front of customers with the other products and services that we do."
In addition to SHOP, Sunvek offers customers a reward for making a referral that results in a sale. The reward is 2 percent of the sale, up to maximum of $1,000.
For a remodeling company to grow or to prepare for succession, someone besides the owner needs to sell. With a dozen employees selling, Donahue doesn't need to do much of the sales, yet acknowledges that many of the larger remodeling jobs have come from his own acquaintances or personal referrals. That's changing as salespeople grow their own contact pools.
Rather than have one separate sales department, each division has its own salespeople, allowing them to specialize in one kind of work. To encourage sales across divisions, Sunvek provides internal "finder's fees." A salesperson who sells a new roof and then finds out the customer wants to remodel his bathroom refers the bathroom lead to the remodeling division. If the client signs a remodeling contract, the roofing salesperson would receive 2 percent of the sale, up to a maximum of $500. That applies in any direction across any two divisions.
Hiring and training a remodeling salesperson is among a remodeler's toughest jobs, says Donahue. "It's easier to teach the basics of remodeling than it is to teach somebody how to sell, though there are certainly very capable salespeople who come out of the trades."
Having an estimating department and outside draftsmen allows Sunvek's sales team to focus on the customer and the sale, not on technical detail. It's not the approach for every remodeler, but that's Sunvek's story — and they're sticking to it.
|American Demographics, www.americandemographics.com||American Marketing Association, www.marketingpower.com||Entrepreneur magazine|
|"Form Builder: Sales & Marketing," BuilderBooks||"If I Sell You I Have A Job, If I Serve You I Create A Career!" by Mike Gorman.||"Marketing Handbook for the Design & Construction Professional," by the Society for Marketing Professional Services, BNI Publications.|
|"Marketing Insights from A to Z," by Philip Kotler, John Wiley & Sons.||Marketing Plan Pro||"105 Essential Tips to Maximize a Home Remodel," by Erik Sundquist, www.remodelingtips.net.|
|"101 Power Strategies: Tools to Promote Yourself as the Contractor of Choice," Success Concepts Inc.||"PR Power: Public Relations for Building Pros," by Kathleen S. Ziprik, BuilderBooks||"The Remodeler's Marketing PowerPak," by Linda W. Case and Victoria L. Downing, Remodelers Advantage.|
|U.S. Census Bureau, www.census.gov|