What better way to showcase your work and market to future clients than to let them visit some of your success stories. Home tours can accomplish that and more. Jud Motsenbocker talks with Jill Liptow and Laura Calfayan to learn about the pros and cons of tours.
Jud: The subject today is the pros and cons of house tours. How do you decide to go into a tour?
Laura: I had been dreaming about it for some time. It made a lot of sense for us because we had six properties that were nearly within walking distance of each other in really lovely neighborhoods, and then we had an open-air pavilion that we built for a nonprofit art center in one of the towns that we do a lot of work in. So that was the perfect place to end the day with a little luncheon. I spoke about it with a marketing consultant that I was working with at the time and she encouraged me to bite the bullet and get it done. Each site was so close that I thought it was doable. I thought people would come because it would be easy.
Jud: Was this a private tour — not with a large group like a home builders organization?
Laura: It was a private tour — just Calfayan Construction.
Jud: I want to get to that a little bit later then. Jill, why did you want to go into these?
Jill Liptow, Owner
Jill: One of the reasons we are in them currently is that they are a great source of new leads for us as well as it assists us when we are in a design process — bringing a client through finished projects just to be able to see our workmanship. If they don't come through a referral, which the majority of our clients come through, this is really for new people looking at our company. I'm the second owner of the company so we started these tours even before I owned the company, and so it's become a custom for our company to be in these tours and our clients kind of expect it. We do get a lot of new work through them.
Jud: Are you doing tours with just your company or are you doing it with an association?
Jill: We are connected with an association. We do two tour projects a year; one is through the National Association of the Remodeling industry, our local chapter which is Milwaukee, and I also chair the Remodelors Council for our local chapter of the NAHB, and so that would be the other tour that we're involved in.
Jud: What are the benefits of having your own house tour versus participating with other remodelers in a larger one? We have both sides of the fence here so let's pursue that.
Laura Calfayan, President
Laura: I did this home tour, like I said the circumstances were perfect for me — there is not another home tour established in our area. We are also very involved in NARI; our NARI chapter as of that date did not have an organized home tour. There is not a Remodelors Council in our area so there aren't any other opportunities.
Jud: But you commented that you had a lot of them right there together. If you didn't have that situation and maybe had them scattered over a larger area, would you still do it?
Laura: I'm considering it. I'm a little afraid of the marketing end of it and if I can get the wide-scale draw that I would need to get the project viewed by a large group of people. I don't want people to ignore one house because it's too far away. I'm not sure yet.
Jud: Jill, what's your thought on doing your own tour compared to being involved.
Jill: I think, like Laura said, she had the perfect situation. Typically we find that our projects aren't close together — there could be a 35 to 45 minute drive time in between projects, and I think that would put a burden on people coming to the tour to make that drive. The benefit to our local organizations offering a tour is that people coming to the tour would be able to see the projects and view other remodeling. A disadvantage is that you do put yourself in direct competition with the other projects on the tour, although I think there's plenty of work to go around. I think people pick the companies that they want to work with because of a particular feature or benefit of that company or maybe the personalities within that company work better with theirs. To me it's not a detriment — it's a disadvantage but it can also be an advantage. There is definitely some pooling of marketing dollars to be able to promote the tour, so more people get to know about the tour because of the advantage of more companies being involved and it being supported by NARI or NAHB. There's a bigger dollar amount for marketing the tour — getting more people to the tours — so that would be a great benefit. Also being that it's connected with a builder or remodeling organization puts on a little bit better professional level.
Laura: It would be a greater expense to me to try to reach that greater audience, whereas when I had this little hub of an area, I could target the direct neighbors in that one little area. I was able to afford to do that. If I was trying to reach out to a much broader neighborhood — well, it would be multi-county — it would break a reasonable marketing budget.
Jud: What does it cost for you to produce and to participate in that house tour? Laura, can you relate to what it takes to put this together on an individual basis?
Laura: I'm thinking it cost me about $8,000. I would do it differently if I did it again.
Jud: That included advertising and incidentals that you gave because of the people you were involved with. I'm going to ask you some questions about the homeowners themselves. What else would be covered in that $8,000?
Laura: I needed somebody to develop the invitation — so that was an expense, the printing of the invitation, the postage. Yes, I did offer a little gift to the homeowners, and we had a luncheon. And then we had our employees at each location and I needed to pay them for that time. Any other kind of incidentals that I may have created for the day — I made up little binders for each job, for instance. I lied, it was about $7,000.
Jud: Jill, you do it on a bigger scale with the association.
Jill: We gift our clients approximately one percent of their project up to a total of $1,500 for letting us use their project on the tour. It's a two-day tour so they're usually displaced from their homes for essentially an entire weekend. So we do gift them that one percent to kind of ease the pain. The rest of it, we use our vendors and subcontractors to help co-op our advertising that we're required to sell — about $1,000 or $1,500 depending upon the tour. And then we have some small flyers where we do our own promotion of our tour project as well along with the other marketing that is done through the association. So we generally would spend anywhere from $800 to $2,000, depending upon the location of the project, the type of the project and so on.
Jud: So that would be individually — your company.
Jill: Right. We look at our expense per project — could be at most $3,000 to $4,000.
Jud: Laura, you said you sent out invitations. Was this not open to the public?
Laura: No, I did not advertise broadly in local newspapers. I think I would do that differently if I were to do it again.
Jud: Where did you get your list of names for those invitations?
Laura: I reverse-mail every location that I work on and then I picked a few addresses that I happened to know also in the area and reverse-mailed those. I got a pretty dense covering.
Jud: Jill, in your case, you did public advertising — newspaper, radio, whatever. Correct?
Jill: Through our association, they probably have about a $40,000 marketing expense through radio, TV and such.
Jud: On this tour?
Jud: Did they charge you to be in the tour?
Jill: Yes, that's the $1,500, but we use our vendors to help us co-op that.
Jud: And sponsors probably also.
Jill: And then we sell advertising.
Jud: How do you track leads from this?
Jill: All of our leads are tracked. One of the things that we do with our tour projects is that we self-promote them, so if we have a client that's currently in design or we're courting for design for a project, we would invite them to our project. That's where we do some marketing aside from the other association marketing. So those particular people that we're courting, they may have come to us through another type of lead — a Web site or a direct mail or a referral of some sort. For tracking, we just have a database for tracking where the leads come from. We do use our tours as a courting technique as well.
Jud: Laura, how do you track your leads from this?
Laura: We also have a tracking system. It's one of the first questions we ask. A couple of weeks ago we received three calls within days and every one of them remembered that we had done a home tour. One of them attended and the other two did not but they remembered us and when they had a need, called.
Jud: Do you keep the leads from your tour separate from your other leads?
Laura: I do. I have a database of who those invitees and attendees were. If one of those people move into my other database, then I duplicate them so that I know they were at least on that mailing list and whether or not they attended.
Jill: We do the same thing — keep them separate. Our leads are very well tracked so we know what money to spend on what type of marketing.
Jud: How many annual jobs do you get from these house tours? A percentage would probably be a bigger help to us.
Jill: Since we use ours as a courting tool, it's a harder percentage to come up with because it's something we look at pretty intensely. I would say we do 30 jobs a year; I would say three of those projects come from what would be a new lead to the show, somebody who didn't know about us and came through one of the organization's marketing. But I would say a good five to six come from our using that project to court them further.
Laura: I can't report that same type of success. We did one — we did have an immediate contract signed right after the home tour. She called us because she received the invitation, and we had a very nice project with her. I'm unsure that the home tour resulted in any other sales for that year.
Jud: Compared to other types of marketing that you do, how does this compare in terms of return on investment?
Jill: We continually are in them because we do find them to be beneficial. I think the biggest thing is we're looking to have growth in our business. This is one way for us to tap into new clients. We don't look at this as marketing to past clients. That's a very different type of marketing that you're going after because in order to have some additional growth, you can tap into your existing client base, and we really pride ourselves on the amount of referral work we get. But this gives us a new source of leads outside our referrals.
Jud: But dollar-wise return on investment per lead cost; is this in line with your other marketing items?
Jill: This is actually less.
Jud: Laura, what did you find?
Laura: Well, because I did one, I didn't exactly have the results I had hoped for. Not that I can say that I'm disappointed necessarily. I appreciate Jill's distinction between who she's marketing to. She is marketing toward new clients. What we did on the invitation is that we included names of the architects that we worked with — four different architects. I did not ask them for a contribution but I would if I were to do it again. They pushed up quite a few notches. They respected what we did. I think they saw us differently and we continued to work with the architects. They all came, they were all incredibly supportive and remain supportive and that's also important.
Jill: And that's harder to track.
Jud: What suggestions do you have for others considering a house tour?
Laura: The biggest thing that I would do differently, I would have acquired the co-op from my vendors and sub-contractors so that I could have afforded to advertise in the local papers. And my tour was done very quickly. I would not do a tour that quickly again. I would be sure there was ample advertising time, and I would make sure there is somebody in the office who has the time to manage the organization. I did it myself and found it overwhelming (if you're doing it yourself). You have to make sure there's somebody prepared to take on the task of managing the tour.
Jud: If it was the right association, Laura, would you go with an association?
Laura: Our association right now is in the midst of trying to launch its first home tour. My hesitation is our territory is huge and if the majority of the participants are an hour away from me, I'm not so sure I would be as interested in participating. It just happens to be because of the size of the territory. If there were a few of us down here, I'd do it, but if I were the only one, I probably wouldn't. I'm not fearful about the competition — I think it would come down to making sure that project is the perfect project because all of our companies are so similar. I would need to really consider which project is going to appeal to my potential client.
I would probably be a little competitive about what they are putting out there and weighing my chances against what the other companies are going to present.
Jud: Jill, what suggestions do you have if you're considering a house tour — good or bad?
Jill: If you are in a tour put on by an association, I would not rely just on the association for marketing to get people to your tour project. We do direct mail to our past clients and to the neighborhood around our project to get them to our project and to get them to our project first. If there is a sponsor of the tour, one of the things I have the luxury of is that I have the certainty that most of the projects on the tour are going to be beautiful projects to look at. I would be more wary of a tour where the consistency of work or the type of contractors would be very varied. I have the luxury in my market area that there is definite consistency — there's the same contractors year after year with a couple of new companies coming in and out.
Jud: You're both saying that you would want to make sure that the right people are involved in this. Could be a situation where there's not the right mix of contractors.
Jill: I would not want to be on a home tour where my project would be seen where at the same time a project would be seen that would have inferior carpentry — quality of work wouldn't be up to par.
Laura: It speaks to the whole value of the tour if there's sub-par work. That's one of my hesitations. I would hesitate to participate until I saw it running proficiently, professionally and until I experienced it from a potential client's point of view. I would do the tour, and I would make sure that the other sites would complement mine.
Jill: Then the other thing that I would recommend is that there's a lot of variety on the tour. The variety of the types of projects is exciting to potential clients to see. We've always found that the more projects that are on an association's tour, the greater the attendance. The more projects closer together, more attendees.
continuation of the discussion from the magazine article:
Jud: Laura, how long ago did you do this tour?
Laura: One year ago.
Jill: We've done them consistently for the last six years. We have a really good understanding of how many leads — it averages three new leads: People who maybe didn't know about our company but saw the project on the tour and decided to consider us for a design agreement and followed through to construction. And in the past three years, we have used them to court the clients further. And most of those people have been in the design phase and we've taken them through the project, and that seems to be enough to just say, yeah, I know exactly what you're talking about in terms of quality. It seems the design agreement to construction goes a lot quicker when you're able to take them through a project.
Jud: So you don't have this imaginary thing you're building out there — you at least have something to put hands on.
Jill: With design/build, you don't have a showroom, and one of things that we do with our projects is we take a very core project to our company. In our 30 projects a year, more than 25 of those will have a kitchen in it. Our tour project has to have a kitchen associated with it because that's a core project to our company and it's the project that we build the best; our clients are happiest at the end of those projects and we build those the most profitably consistently. So when we're taking somebody from the design to the construction phase, it's really easy for us to say, "Let's go over and take a look at that project. We'll walk you through it and you can take a look at some of these things we're talking about."
Jud: Laura, did you have a problem getting the projects done in a reasonable amount of time before the tour?
Laura: It was not a problem at all. Most of them had been done in about a year- to two-year time span.
Jill: That's not a problem for us either because as soon as we finish the tour, our objective is to establish which project we have in design that is going to be finishing prior to the following tour. We're continually thinking about what the projects are going to be. What we want them to be is not just completed with our work, but if there's landscaping that comes in after us or interior decorating, furnishings, we want that to be completed as well. That's one of the things, a criteria that we look at when we're considering a project to show on the tour. We are also hopeful that the homeowner who built that project with us is going to use a professional to do landscaping or decorating if that's required. Because I think that those projects show better.
Jud: Do some people show projects that are not totally completed?
Jill: I think that they show their project and they think that where their project ends is the end of the project, and there are contractors that do that. But I think the project shows that way as well. We really pride ourselves on overall design and not just what we're providing but what it's going to look like in the end and what the homeowner is going to live with. In the end, aesthetically we want that to be what's presented, not just what we can do.
Jud: Laura, what about you. Did you have projects that had other things to do — decorating, landscaping?
Laura: I think I had one project that was a little stark because the family had just moved in. I thought that it was a good translation, however; it matched the mood. It's an older house and it worked well anyway. I know that there are other tours that exist and the contractor spends a good deal of money having it professionally propped, so that is an option if you feel that perhaps the client's décor wouldn't translate well to your general audience. This is a touchy subject. It sounds like Jill's company has a little bit more flex in choosing the clients than I did because I had this tight little circle. So there is an option to get around it if need be.
Jill: We have an agreement that we sign with our clients when we do put their project on tour, and it can be very touchy because you're showing something that people have generally been living in for a little while, and we want to make sure that it's shown to the best of its ability. We want to make sure that the children's toys are put away and things like that so it's not detracting from the project. Ultimately we're there trying to sell projects, work and design and we want it to show well. But I think they're appropriately taken care of in terms of that we will generally give them up to $1,500 for us to use their project.
Jud: Laura, how long was the tour?
Laura: It was one day.
Jill: Two days
Jud: Let me move on to the client themselves. How do you handle working with the clients, the homeowners, people walking through their houses? Do you have a signed contract, and is there an extra insurance policy?
Laura: That was my biggest hesitation. Just because of my personality, I don't like asking people for things. It was very hard for me to go to those clients and say, "Would you do this?" What I found before the first sentence was out of my mouth I heard, "Anything, we would do anything for you. We'd love that — that's great." They immediately were on board. And I had little script prepared about what we would do — we would clean the areas and the house would be manned and we would limit the access to only the areas that we worked in. If I were to do it again, I would have something written up and signed. I think I might have been lucky, but I haven't heard of any major disasters about home tours. It may have been wise to have something signed and have an agreement. But it was very casual.
Jud: But these people, they didn't hesitate to let you put this on then?
Laura: No, not at all. They trust us. I was equally surprised.
Jud: Jill, I know you have a signed contract, is that right?
Jill: We do have a contract because we have expenses going into it. There was an occasion when another contractor in one of the tours had a client back out on him at the last minute and at the meeting he was telling us he had $5,000 into this and it was pretty devastating to him as the contractor. At that point, I just knew that I didn't want to be in that situation so I just wanted to make it clear with the client what our expectations were of them and what they could expect of us. Us protecting the home, us carrying the proper insurance for people coming to the tour if they were to get hurt or something should get stolen or whatever the case may be. As far as getting people to be on the tour, that is probably one of the easiest things that we have right now. We have more people that have met us at a tour and their question was, "Is this project good enough to be one of your tour projects?" So we actually have people now asking us to be the tour projects. That's a little bit different problem to have.
Jud: Jill, you've made the comment that you do give them a gift. Laura, did you give them anything special?
Laura: I simply sent them a thank-you and a big floor plant. Of course, they were invited to the luncheon as well. And this was not a two-day tour. It was a few hours in the late morning, early afternoon.
Jud: Jill pointed out that she gave one percent of the project which is up to $1,500.
Jill: We may have a project on the tour that's $70,000, like a kitchen remodel and then it would be $750 or $600 or whatever.
Jud: Are these people home at the time?
Laura: All but one chose not to be home. One couple chose to be home, and I was at that house and that was fine. As the day went on they seemed to get more and more excited and they started showing people around. They had just moved in and I think they were just so proud. It worked out very nicely.
Jill: Remarkably, I think people are very excited to be on the tour. It is a proud moment for them. They're very happy to know that their project is one that you would want to show. I think 95 percent of clients will say, "Absolutely! We'd love to help you out!" There's a small few who are private and fearful.
My people are not home. We don't ask them but they don't choose to be home. A lot of them choose to go on the tour themselves and see the other projects that are on tour at that time.
Jud: What kind of projects do you put on the tour? Are there projects that you would probably not put on the tour?
Laura: I would put something that represented the majority of the jobs that were the most profitable and the ones that we know we do very well and the client is very happy at the end. I would definitely include additions with kitchens, for instance — that's a typical job for me. I would love to include some of the bathrooms we do because they're beautiful. Sometimes I feel the bathrooms are a little bit harder to get the client to consider because you might have to walk through the home and walk into the master bedroom to get to a master bathroom suite for instance. But I would definitely want the ones that are most representative of the work that we do. I had a combination of projects on that tour — one happened to be a really lovely mudroom and made a huge difference for the family that lived there. A lot of people have referred to it ever since. Of course, kitchens are on that tour. The pavilion. A whole-house renovation. Anything that is representative of the work that my crew likes to do and can perform well.
Jill: We try to pick one of our core projects: A kitchen with an addition, something challenging where we've solved a design problem. What we wouldn't show — we've done some rather large whole-house remodels but typically that would not be a core project for our company. Although it's something we enjoyed to work on but I wouldn't want to show one of those on a tour. If you show a $600,000 project, people coming to a tour may think, "Oh they don't take just my little kitchen." And since we do a lot of those little kitchens, I wouldn't want to show a whole house because I think that would detract from what my company is and what we're best at providing.
Laura: If I do another one, I would make sure that the project spoke to the majority of the people who come. I don't want them to get afraid of my company. We get that regardless; "do you do projects this small?" It might be an $80,000 to $100,000 kitchen and they think that's a small project for us somehow.
Jill: With us, we're doing something different this year; we're showing a lower level this spring in the tour. The difference is that this lower level is filled with cabinetry. It has the equivalent of a kitchen, it has a bathroom, so it has elements of our core projects. The jury is still out on this one because we've never done it before.
Jud: Do you use signage? Laura, did you use a lot of exterior signage?
Laura: We had a map on our invitation and every site had a site sign on it. They were huge so it was easy to spot.
Jill: The tour sponsors have signage and they develop all the maps for us. We also have our own job-site signs out in front of our projects. The maps are published in the local newspapers and when you purchase tickets you are able to pick up a map as well.
Jud: Jill, how many people do you have working the tour at the home that you have?
Jill: My employees in the company. Typically we will only have one project on tour. We have one person that will be collecting tickets and the food donations and the things that we typically do. We also a traffic cop because when we have a tour we require that anybody going through the tour is escorted through. We pride ourselves on the fact that that's one of the things we provide to our clients is seamless modeling. So in order to show off our work, we like them to have guided tour. Then, the size of the project would determine but we can have anywhere from two to three other people taking people through the project.
Jud: You had somebody guide them through — they just didn't go off on their own?
Laura: We had one person at each site. It would have been handy to have more because it did get hard. Most people appreciated the guided tour, and I think there were a few that didn't get the personal attention that I would have preferred for them to get. But I didn't have that kind of manpower available. That is something I would do differently — I would have a minimum of two people, if not four, at each place.
Jud: I like the idea of the guided tour. First of all, it's a way to get names and find out what they're interested in doing maybe.
Laura: We had a sign-in sheet as well. Sometimes people don't know where the work started and where it ended if it's done well. It's nice to point out even the smaller specialty items that you put in to make it extra special that may have been overlooked had it not been pointed out.
Jud: In the future, would you give people any sort of discount if they're going to be on the tour?
Jill: We haven't in the past but it is something that we're discussing. If there are people who are willing to sign up at our tour project that day, we would provide some sort of complimentary design service — maybe a couple of hours — or maybe a free upgrade. But it's very important to maintain our profitability on projects, and if you start giving away free things and we have to work that and co-op that with some of our vendors. We're considering it for future projects.
Jud: Laura, would you talk about any discounts to the client whose home you're showing or to the prospective clients?
Laura: I don't think I would. I have mixed feelings about discounts. I think they are incentives but I would have to be creative and think of another incentive.
Jud: Maybe incentives is a better word than discounts. Two more things: Was parking a problem for either one of you?
Laura: No, some people walked. Maybe we were lucky. If the volume was higher, it would have been a problem because these particular homes — and it something you really have to consider — I'm not sure of how we would have handled it.
Jill: We have had a project in the past where parking was an issue because it was a house very set back into the woods, and in order for the cars to get back there and turn around, it would have been an issue. What we did was hire two high school kids to drive golf carts from the end of the drive so people just parked on the road and we golf carted them to the house.
Jud: The logistics of these things can sometimes be a nightmare.
Jill: You have to be conscientious about the other neighbors.