Mark Richardson, CR, is an author, columnist, and business growth strategist. He authored the best-selling book, How Fit Is Your Business? as well as his latest book, Fit to Grow. He can be reached at email@example.com or 301.275.0208.
Remodeling has always been an important indicator not just of design trends, but of the country’s overall economic health. Most remodelers can tell you a month before the next consumer confidence index comes out whether it will rise or fall.
If you’re like most remodelers, you’re overwhelmed by a rapidly changing market. That makes it even more important for you to keep your ear to the ground and listen carefully for clues as to where things are headed. That will give you the opportunity to make directional tweaks before this fast-moving train passes you by. Here are a few things you should listen for.
Changing client demographics. In a recent five-city tour with Professional Remodeler, I asked remodelers to compare the number of “30-something” clients they have now with the number they had 10 years ago. Consistently in all markets, remodelers said that the number has increased from 5 percent or 10 percent to about 30 or 35 percent. Most economists would consider a shift of that magnitude to be headline news. Thirty-somethings buy differently, care about different things, and communicate differently from the over-50 group. Are you addressing these differences in your marketing, your processes, and your product?
Shifting lead sources. The rate of growth for digital marketing is impressive. I recently talked with the owner of a top remodeling firm on the West Coast that said even though he continues to focus on his existing client base, digital leads have increased 10 to 20 percent each year for the last several years and now make up a third of total leads. Clearly, it’s important to look great on the internet. You only have a few seconds to grab the eyeballs of prospective clients, and they may never see your company if it’s buried on page two or three of their search results. Digital marketing is no longer an optional “good idea,” it’s a “must do.”
Online reviews. At a recent meeting of Harvard University’s Remodeling Futures Program, it was reported that homeowners today place more value on online reviews than on personal referrals—even refer- rals from friends and family. That’s a game-changer. For decades, remodeling businesses have heavily relied on word-of-mouth recommendations. But today, getting great reviews can super-size your lead flow. Negative reviews are a fact of life, but with enough positive reviews, you can project an overall good impression. Be proactive in getting positive reviews, and you will see a big return.
Talent turnover. Going with your gut may not be reliable; you need to look at the numbers. Check the tenure and retention rate of your team over the last three to five years. If you see that turnover has increased by more than 10 percent, that’s significant both in terms of lost productivity and the effort required to bring in talent. There could also be generational issues that may result in future workplace environment changes.
Client questions and comments. Listening to what your clients’ concerns are can be revealing. Take a minute to think about whether you are hearing these questions and comments more often:
• Can you give me a breakdown of the project cost?
• Can I buy this product myself and you install it?
• Can we do the meeting online vs. face to face?
• I don’t need to see your company presentation because I’ve spent some time on your website.
If so, consider it a trend. Unless you become masterful at addressing these items, you will lose ground.
There have always been changes in the remodeling industry, but the pace of change is faster today. Proactively keeping your “ear to the ground” will help you prepare for the coming tidal wave of change.