With a sputtering economy and crashing home prices, it's not an easy time to find new remodeling clients. But it is a good time to take a back-to-basics approach to marketing and work on mining your most lucrative lead source: past clients.
This isn't exactly a cutting edge idea, but it's something many remodelers got lazy about over the last few years as business boomed.
If you've done a good job, past clients offer a wealth of advantages over new clients.
“No. 1 is instant credibility,” says Dale Nichols, president of Artisan Remodeling in Granite Bay, Calif. “People know exactly what we're capable of doing.”
It's also much less expensive to land new business from old clients than it is to grab new ones, Nichols says.
At the same time, it's easier for a remodeler to work with a client she knows because you know all their idiosyncrasies, says Patty McDaniel, president of Boardwalk Builders in Rehoboth Beach, Del.
“We're familiar with the house, we're familiar with the client,” she says. “We know what it's going to take to make them happy and we can be more comfortable putting a number together.”
The most important part of getting referrals is doing a good job in the first place, but even after that, it's important to reach out to those clients to make sure you stay top-of-mind.
Here's how several remodelers across the country are reaching past clients and rewarding them for their repeat and referral business.
Black Diamond Builders e-mailed all of its past clients asking them for testimonials. Anyone who responded got
their name entered into a drawing for a dinner for two at a local restaurant.
It offered several benefits for the Lake Forest, Calif.-based firm, according to owner J. M. Steele. Besides giving Black Diamond fodder for its marketing efforts, it also makes sure the company is on the minds of past clients for referral or repeat business. Giving them a chance to relive their successful remodel brings them positive vibes and memories, Steele says.
Lots of companies give out gift cards to thank past customers for referrals, but Thompson Remodeling in Grand Rapids, Mich., wants to make that reward last a little longer.
Instead of giving out a $50 or $100 gift card for an expensive dinner somewhere, Thompson spends that money on cards for the local coffee shop. That way, says President Ben Thompson, the client will get multiple uses out of the card and think of Thompson every time they use it.
Like many remodelers, Larry Murr tries to keep in touch with his past clients through things such as Christmas cards and periodic letters. What makes the approach Murr uses for his company, Lawrence Murr Inc., so striking is how honest and open he is with his clients about his company, the market and the current business environment.
Consider the most recent letter from the Jacksonville, Fla., design/build firm: “First of all we are still in business, but business has been very slow,” he writes. He goes on to discuss decisions in the company to reduce salaries and cut staff as the company adjusts to the market. He also talks about the challenge the company is facing from new, low-price competition.
Murr has received a positive response to the letter, with many clients calling about jobs and saying they were glad to hear he was still in business. Clients were reassured that the company was taking steps to survive the downturn, Murr says.
But it's not all negative. Murr also uses the letter as an opportunity to keep clients informed about his recent CGP designation from NAHB and the opportunities afforded by the new energy tax credits.
Every homeowner has little projects that need doing, so Synergy Builders decided to capitalize on that by offering handyman services in exchange for referrals.
Any referral that leads to an appointment is rewarded with two hours worth of labor. Once the homeowner has accumulated at least half-a-day they can redeem that for work on their home.
The West Chicago, Ill., design/build firm sends out mailings promoting the program to not only past clients but also to any other homeowner the firm has had contact with over the last few years — even those who didn't hire them.
The program not only drives referrals, but often also leads to additional business from the referring clients who may need more work done, says CEO John Habermeier.
East Meadow, N.Y., remodeler Alure Home Improvements has a PartnerPoints program that allows clients to earn points toward a Caribbean vacation. Homeowners earn a point for every dollar they spend on remodeling, plus a point for every dollar referred customers spend on their first project with the company.
Clients can also earn additional points by attending events at Alure. With 200,000 points, they get a free trip, this year to Puerto Vallarta, Mexico. So far, the company has already sent 58 couples on vacation. Points never expire, so clients can earn their trip over time even with smaller projects.
Gehman Custom Remodeling uses a variety of methods to get face time with its past clients. The Harleysville, Pa., company calls past clients on the anniversary of their project to arrange a walk-through to make sure there are no warranty issues during the five-year warranty period.
Gehman staff also ask if they can take after-photos of the project as another way to spend some time with the homeowners. Those photos are then used to produce photo CDs and albums that the homeowners can share with their friends and co-workers. Hand delivery of the albums also gives him more face time with the clients, says President Dennis Gehman.
These visits result in at least some small additional work for the clients about 25 percent of the time, Gehman says. It also reinforces the idea of the company as one that cares and keeps them in the clients' thoughts when people ask for referrals.
Quality Design & Construction in Raleigh, N.C., is publishing a high-quality, hardcover, before-and-after photo book of its past projects. The book will also include articles on tips and trends in remodeling.
The full-service remodeling company is going to send out copies to previous clients whose projects appear in the book so they can display them in their homes — and hopefully show them off to potential future clients
The firm is also going to try to drive more vendor referrals as well by customizing versions of the book, says Vice President Peggy Mackowski. For example, the local plumbing supplier will get a version with fancy fixtures on the cover. That way, when customers are visiting these suppliers, they'll get a chance to see the work Quality Design & Construction does, Mackowski says.
Myers Constructs in Philadelphia is taking full advantage of modern communication to keep in touch with its past clients.
The company sends monthly e-newsletters, each focused on a single topic to keep it short and sweet. Besides that, employees send occasional “hello” e-mails to check on clients, ask how their pets or kids are doing and generally keep in touch. They also send messages anytime there is press about the firm.
It's all about contacting past clients regularly, Menke says.
It may be simple, but you can't argue with the value of money. Atlanta Design & Build has a Referral Rewards program that gives clients up to $300 when they refer a project. Rewards are given out on a sliding scale of $100 for projects less than $20,000; $200 for projects $20,000 to $75,000; and $300 for the largest projects.
The Marietta, Ga., company is also reaching out to past clients, sending them letters telling them that now is a great time to remodel because suppliers and vendors have reduced costs in the face of declining demand.
Cipriani Remodeling Solutions recently launched a contest for the best “Before and After” project that encourages past clients to send their friends and families to the company's Web site.
The Woodbury, N.J., company sent out e-mails to each client that contain their before and after photos and asked them to forward those e-mails to everyone they know. Anyone who gets the forwarded e-mail can follow a link in the message that takes them back to the Cipriani Web site to vote for the project as the best “Before and After.” The top vote-getter will get $1,000 from Cipriani and Cipriani is exposed to potentially hundreds of new customers.
It's an extension of a program the company has been doing for years, putting together polished “Before and After” e-mails for all of its clients that they encourage them to share with their friends and families.
Everybody knows that you're supposed to change the batteries in your smoke detectors when you change your clocks for daylight-saving time.
Renaissance Remodeling wants to make sure its clients don't forget that and don't forget the company, so twice a year the Boise, Idaho, firm sends out batteries along with an update of what the company is doing.
Prior to starting this three years ago, the company had only completed a handful of projects for past clients, says Principal Chad Vincent. Now, the company gets calls and e-mails from past clients every time the batteries go out and repeat and referral business has drastically increased.
Advanced Kitchens in Atlanta has staged open houses at past clients' homes where the company invites neighbors to come see the completed work. This gives the company an opportunity to explain how they work and the clients a chance to talk about their positive experience.
In honor of St. Patrick's Day, the company also invited past clients to find the hidden pot of gold on its Web site. That helped increase site traffic as clients searched across multiple pages on the site. Everyone who found it was entered into a drawing for a glass vessel bowl.
Those actions, along with newsletters and other outreach efforts, have helped the company draw 75 percent of its business from repeats so far in 2009, says President Ed Cholfin.
Talmadge Construction owners Jeff and Adele Talmadge throw a barbecue every summer at their home for their clients, trade contractors and employees.
It's a chance to reward everyone for their business and good work during the year and for the clients to get back in touch with project managers they have bonded with during their remodel, says Adele Talmadge. The clients like to brag to each other about their project; how much they loved working with the company's architects and field staff; and how well it went, she says.
Senior Editor Jonathan Sweet shares more of his findings in his blog.