Stretching the Marketing Budget

How a remodeler is using co-op marketing to get more bang for his buck

January 31, 2009

Stretching marketing dollars

The fatal mistake a lot of companies make when the market is down is cutting back on marketing.

Elite Remodeling in Frisco, Texas, is instead partnering with other companies to make its marketing dollars go further. The full-service remodeler, located outside Dallas, has embraced co-op marketing for its postcard programs.

Each postcard the company sends out includes not only Elite's traditional marketing message, but also a small section of “Elite Business Partners.” These are four other companies that Elite does business with that might be of interest to the firm's clients or potential clients, such as appliance dealers and mortgage providers.

Each of the companies pays 20 percent of the cost of the mailing to be on the postcard. Even if one of the partners drops out, the other companies' share won't increase. In that case, Elite will pick up the additional cost, says Elite's president, John Todd.

The advantage for Elite is that the company either gets the same amount of marketing for less or increases its marketing without spending more, Todd says. For the company's partners, it's a chance to be recommended by a trusted source.

The first postcard under the new program went out in December. Elite sends one or two postcards a month to about 150 to 200 people, targeted by geography or demographics. The company also sends out quarterly mailings to a larger group of several hundred past clients.

Elite doesn't ask for any long-term commitment from the marketing partners, taking it month-to-month. The cost is minimal — probably less than $1,000 if somebody partners for the entire year — but that equals another $4,000 a year Elite can spend on marketing, Todd says. This means the company can create higher-quality mailings more often without spending more money. 

NARI members get the word out

Marketing agency Biz-Comm is helping remodelers reach editors and reporters through a new online article database.

The Asheville, N.C., firm, which has many clients in construction and also manages some local NARI chapters, has created a new Web site where remodelers can post articles or story ideas, and journalists can search out information.

The service is currently only available to NARI members, but Biz-Comm owner Patrice Olivier-Wilson says it could be expanded to other remodelers if there is enough demand.

“We're just trying to get the name out there, trying to get the word out,” she says. “Hopefully it will just take on a life of its own and everyone can use it for their benefit.”

The idea for the service came from the Washington, D.C., NARI chapter, which Biz-Comm manages. The chapter was looking for a way to reach local news outlets. After that, it was a natural fit to expand it to other NARI chapters, Olivier-Wilson says.

The site launched late last year, so it's difficult to say how successful it will be. The biggest problem so far is that remodelers aren't really aware of the site, Olivier-Wilson says, something she hopes will change as more NARI chapters get the message to their members.


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The Sweet Spot Blog

A dead-end in sales

It's no secret that foreclosures are making up an increasingly larger portion of home purchases, especially in Southern California. DataQuick reported that home sales were up from a year ago in Southern California for the fifth consecutive month but that 55 percent of sales were foreclosures. But here's the interesting part to me:

“Many first-time home buyers are, understandably, cheering as foreclosures dominate sales, tugging down prices and raising affordability,” said John Walsh, DataQuick president. “For home sellers and the industry, though, one concern over foreclosures representing half of all sales is that those transactions simply repay lenders. They don't trigger a move-up purchase.”

It's a dead-end for purchases. And that means it's a dead-end for remodelers. The buyers of these foreclosed homes are probably bargain hunters who aren't going to be purchasing remodeling. The real money is in the move-up buyers, and they just aren't there.

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