David Lupberger: It's about customer engagement

By extending homeowner relationships, you can introduce a recurring revenue model, building future equity in your company. A client-for-life business model builds company equity.

July 01, 2013
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Innovation creates value. There are some innovative remodeling professionals who are changing the remodeling marketplace. They are positioning their companies for the future so they can compete in the new economy. I recently participated in a program that Mark Richardson hosted on Positioning for the Future. Here are two key points he presented that address this strategic thinking. They address your product and your clientele:

Your Product

  • Is your product positioned for the future?
  • Is your product positioned for diverse economic conditions?
  • Is your product positioned as an experience and not just as a product?

Your Clientele

  • Is your client base positioned for the future?
  • Are you implementing consistent client retention practices/processes?
  • Are you growing your business through your existing client base?

In this post-recession marketplace, there are some time-tested marketing rules that still apply:

  • Service trumps price, so don’t compete on price. You will lose every time. Educate potential clients on the benefits of working with you. All contractors are not created equal.
  • The first sale is the hardest, so find ways to expand the service offerings to existing clients. They already know you, trust you, and have seen your work. Which other products and services can you offer to help them with their home?
  • Manage each homeowner relationship so that additional work will follow. Doctors, dentists, lawyers, and accountants all create relationships with clients by providing ongoing, annual check-ups and exams that provide them with a recurring revenue stream and a stable of long-term clients.

These relationships are not price driven. They are based on trust. Let’s introduce this “trusted adviser” role in the remodeling industry. Let’s build on these ideas and move this type of strategic thinking from theory into practice. What does this strategic “shift” look like, and how could this build your daily business?

Most remodeling professionals are now reporting increased sales activity. Homeowners are feeling greater confidence, and they are now beginning to consider the larger scale projects that were once put on hold.
Remodeling is coming back. As before, homeowners are contacting multiple companies for estimates. In speaking with remodelers bidding this new work, I am hearing that due to competition, margins are tighter and profits less. Simply, contractors are working harder for less money.

Let’s begin to change this game with potential clients. With three or more contractors bidding the larger projects, are there additional opportunities that we can find with every client we meet? The simple answer is “yes.” Continue to pursue the larger projects, but before you leave, ask one simple question: Are there any projects around your house that you have had difficulty getting done? Are there some small projects we can help you with as we complete the estimate you’ve asked for?

It’s about customer engagement

All homeowners have additional small projects they want done. They all have a “to-do” list, but they haven’t taken the time to get these additional projects addressed. They are focused on the “big” project, but there is additional help that they need. There is a successful contractor in Nashville, Tenn., who asks this question on every appointment he attends. He has told me he doesn’t always get the bigger job, but usually gets all of the smaller work as a result of this question. This allows him to engage the client and allows the client to experience working with him.

As the bidding process moves forward, he starts a relationship with the homeowner, assisting them with other things they need done. He gets his foot in the door. He is a full-service remodeling professional who does small projects so that he can respond to all homeowner needs. Why? Because small projects have higher margins and less competition. He is also initiating a relationship, positioning his company for the future by creating the possibility of recurring revenue through becoming their home adviser. He is building a “client for life” business model.

By extending homeowner relationships, you can introduce a recurring revenue model, building future equity in your company. A client-for-life business model builds company equity. I enjoy speaking with innovative contractors like this. They bring attitude, energy, and innovation. They are the future of the industry. PR
David Lupberger has been in the remodeling industry for more than 20 years and is author of “Managing the Emotional Homeowner, the Remodelers Turnkey Program, and the Home Asset Management Plan.” You can reach him at david@davidlupberger.com, or at 303.442.3702.

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