The home improvement industry 2013

Examining the good, the bad, and the ugly

January 29, 2013

You may have built your business by understanding and constantly improving your comprehension of what it takes to be a good remodeling contractor. You may have “branded” your logo and trade name in your market. You may have developed a reputation for creditability and trust, and yet you may have succumbed to many of the myths, which surround your industry, using them as guide points.

You also may have overlooked major factors, such as, how do you increase your business by creating more ways to propose your services to consumers? What do you really know about lead development? Or the intricacies of lead management in this changing marketplace? What do you know about creating a database for recording every lead, every inquiry?

Then supplementing the basic information with data regarding the project in question, then following up if you didn’t get the contract —or—did you assume that because you didn’t get the project that someone else did or that the property owners had abandoned the project completely?

Are you an intelligent manager?

How do you examine your competition? Do you see it only from the standpoint of those who perform similar services, or do you recognize that in many cases it is competition for the consumable dollar? Will the home improvement project as you perceive it make it to the top of the list, getting past a new car, boat, SUV or RV, a vacation condo or timeshare?

Marketing and selling, the role of the Internet

The Internet plays a dominant role in marketing and selling. The prospect is probably Googling the information they receive from you which will also lead them to information (and misinformation) about you, your product, and your competitors.

Here is a partial list of tactics utilized in the more successful organizations:

  • Stop telling. Selling requires a lot of questions.
  • Listening and processing information equates, in the prospect’s perception, as helping and caring.
  • Great selling success comes about when the buyer is convinced that it is his/her decision. Notice that the satisfied customer usually says “I bought it from—” and seldom says “What’s-his-name sold it to me.”
  • Make an inventory of the 5 unique factors of your company and the 8-10 unique factors about your product or service. Present these only after you have built rapport.
  • Don’t leave your prospect’s presence without asking for the order (sometimes more than once). If you give a fulfilling (to them) presentation, you’ve earned the right to ask for their business.
  • Remember, there is no such thing as a cold, rational, dispassionate buyer who buys solely on merit.
  • Remember, no new idea/method can be sustained without reinforcement and spaced repetition.

It takes a lot more than an understanding of construction, design, engineering and similar skills to run a home remodeling business today. You and many of your contemporaries may perceive that it takes an intelligent person to run an established and profitable home improvement business in today’s economy. However, don’t confuse intelligence with creative and imaginative thinking. Examine what others in your industry are doing. Thinking is a skill, not intelligence in action.

Consider this—is your thinking more successful when dealing with technical matters than it is when dealing with the behavior of customers, installation crews, or those in your organization having the responsibility to sell contracts to your customers? If your answer to the latter is yes—you are normal. However, if you perceive many of the modern marketing techniques as perverse, anti-ethical, or contrary to your business model, therefore unworkable, you are probably being blind to means and methods by which your business can expand.

The marketplace has changed, have you?

The prospect who calls or inquires about your services who is in the age bracket of 35-50 is usually computer savvy. While they’re talking to you by phone, they may be doing a Google search acquiring information about you, your company, and your competitor.

When visiting “the project,” they may possess information as well as misinformation and this has to be a preparedness factor for you/your business in this changing marketplace.

In today’s business environment, it is the more successful home improvement company who understands the marketplace has changed. The interests and buying methods of property owners has changed. The practices by which you once built a business on referrals, word of mouth advertising, mailing pieces and “print media” ads still exist. However, many of these are less effective, many are more costly and are thus less profitable. Appearing at shows and events, while still an excellent way to build business, is highly competitive and calls for a much different approach than even that which you might have used in the past.

What are you doing to create more leads?

The lead is a very precious element of a business management plan. At some time, almost every remodeling/home improvement business owner will complain about the lack of leads, to which we respond—so what are you doing about it?

In many home improvement companies, the cost of lead production represents more than 10 percent of their annual expenditure. The average lead when issued to a salesperson may cost the issuing company between $200 and $300. The lead [inquiry] is the lifeblood of your business. They are the consumer’s response to your advertising, promotion, branding, and the customer satisfaction image you are striving to establish. No lead should be overqualified or second-guessed.

A major ingredient in running a successful home improvement business in 2013 is changing your “mindset.”

As an example, a person doing lead intake in even the smallest company has to be scripted with a series of questions that build interest and the feelings of the caller as being “cared for.”

Understandably, the caller has an agenda. They saw your ad, know of your company, met you at a home show, whatever. Now the proper primary questions asked build up a “profile” of this caller and their property.

Acquiring leads and creating a database

E-mail addresses are key. They will aid you in replacing advertising methods, which may have become too costly.

E-mail reminders to past prospects, solicitation for referrals from completed jobs and similar tactics are used by most creative marketers.

Acquire e-mail addresses on every incoming call—every contract and all field contacts—in fact, wherever and whenever you solicit for prospects.

Caution: Some restrictions exist on the indiscriminate use of e-mail addresses in many states. E-mail use is so abundant that it requires you to narrow the opening “text” of your e-mail letter—to differentiate your message from hundreds of other unsolicited messages, which may be received weekly by your prospect. However, with a proper plan and script writing, this e-mail format can be achieved for less than 20 cents per contact.

New innovations such as programmed e-mail enables you to confirm the lead received or the sale you made today with a brief message. You can introduce your referral system while the job is being completed and even follow up after completion by soliciting around your completed job.

Keep it legal, make it “customer satisfaction” oriented

All leads deserve a follow-up. If they are sold, they become the source of referrals if you create a “referral marketing program.” If they are not sold, they are certainly worth a follow-up contact. As you build a database and utilize it as a method of increasing your revenue, here are some cautions/reminders:

Once you get a lead and make a presentation without a sale, you can only follow-up for 90 days without violating the provisions of the federally monitored “do not call” list. Check your local and state laws, they may be more restrictive [if you sell and install a product, the extension is longer but contact is still limited by law]. Each time you visit a prospect, ask them to sign a form with verbiage similar to this:

Thank you for visiting our project and for the information provided. In the event that in the future you have access to new product innovations or changes in your pricing formula, please contact me with information. My phone number is ____, my e-mail address is ____, my fax number is ____.

You can follow-up with direct mail, e-mail, or by constructing a newsletter, and even phone calls [with permission]. The seller who does not “follow-up” on an unsold lead because it appears pushy or over-aggressive also misses the point.

In our surveys of prospects that didn’t buy after showing interest, it is not uncommon to hear the phrase “the contractor or salesperson never called back.” The “big box” theory is—they walk through our store, if they don’t buy today they’ll be back tomorrow. Small businesses cannot adopt this laissez-faire attitude for prospects. The prospect’s interest is truly the life-blood of your business and any actions which threaten this life-blood stream eventually will lead to a contamination of the business.

Are sales skills helpful?

Having observed the “persuasive communication” scene for many years and perceiving the subtle yet dynamic changes in selling methods and, moreover, buying habits,

remodelers should rely on the following statement to make others aware of what interaction communication skills are necessary:

“Whenever an interaction between two or more parties takes place, for the purpose of establishing new ideas, exchanging goods or services, or the development of a relationship, some form of selling will occur and the skills of the communicator will determine the outcome.”

Many architects, designers, and contractors do not believe that “selling skills” are a necessary ingredient in a sound business plan. However if you believe this, your thinking may have you trapped in a world that no longer exists. Selling is not an art. Selling is not the sole domain of charismatic people. Selling is a science. It is the science of understanding what prospects say and what they mean. It is a science that may require you to rethink your presentation methods, your methods of comprehending what the prospect says and certainly your response techniques.

Do you understand what your customers are saying and what they mean?

The customer is the key ingredient in any sales or marketing plan. How that customer feels and thinks is important for you to understand. Often, the statements made by customers are received as confrontational or resistant when in fact they are open invitations to understand what is behind a statement.

An observation and overview of customers having invited someone into their home to examine a project and make a proposal produced the following information.

Here is the criteria that they were using to evaluate that salesperson/contractor and the possibility of doing business with them:

  • Credibility of the salesperson/contractor, aka “the seller”
  • Rapport with the seller
  • Consideration of their (the prospect’s) value system
  • Unique quality product/service tailored to their needs
  • A product/service which appeared superior to other options
  • Ease, simplicity of purchase
  • The seller was a knowledgeable specialist
  • The seller exhibited real care and concern

If these criteria are not met, would it be fair to label the seller as weak or having undeveloped skills?

Several years ago, the author Jim Collins wrote a book entitled “Good to Great.” The prevailing thesis is: If you think you’re good at what you’re doing, you may obviate the possibility of doing what is “great.”

The changing marketplace and the changes in the buying habits of our customers demand that we in turn change, that we improve our skill sets and learn more about the function and language of customer satisfaction.

The home improvement/remodeling industry is a $350 billion dollar giant. It is fragmented and made up of a lot of small to moderate size businesses, all possessing some common goals.

We encourage you to examine your skill sets and find those things that can provide you with the ability to improve those skills, and in 2013 make your commitment to effecting those changes to give you the opportunity to run a “great” remodeling business rather than just a “good” one. PR

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David Alan Yoho and Brian Smith are both Senior Account Executives with Dave Yoho Associates in Fairfax, Va. (www.daveyoho.com). Their client base consists of large and medium sized companies who manufacture, distribute, and sell retail home improvement projects to consumers. Both are popular speakers at industry functions and have authored numerous articles on the subjects of marketing and selling. Both Yoho and Smith are featured in an easy to use web-based training program entitled Super Sales Training (http://supersalestraining.com).

 

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