One thing that remodelers who are succeeding in a down economy have in common is they rarely talk about the economy being down. Certainly they acknowledge economic reality, but they don’t obsess about it or let it daunt them. If anything, they use it to their advantage. They fine-tune their businesses, making adjustments to their sales and marketing efforts, controlling costs and reevaluating priorities.
“I’ve never used the term down economy in almost 30 years in business,” says Bruce Pinsler, president of Galaxie Home Remodeling, Lincolnwood, Ill. “I just don’t buy into that, especially in my business. If homeowners can’t sell their homes, they have to work on them. The difference is we focus more on needs than on wants. If your roof is leaking and you can’t sell your home, you have to find a way to fix your roof. I’ve had my biggest growth spurts in what others consider down economies.”
Despite reports of an unfavorable climate for kitchen and bath remodeling, Galaxie Home Remodeling’s kitchen business was up nearly 100 percent in 2010 compared with 2009, Pinsler relates, and the company’s bathroom trade was strong, as well. Bathrooms are a necessity, Pinsler explains. “If water is getting behind the walls and you have a mold problem, the bathroom must function. A lot of times, instead of just putting a Band-Aid on it, people are going to invest in their future, knowing they’re going to be staying in the house for a long time,” he says.
Customers may have lost 40 to 60 percent of the equity in their homes, depending on the neighborhood, Pinsler acknowledges. “We’re all in the same boat when it comes to that, but for most of my customers, their home is still the single biggest investment they’ll make in their lives.”
"Branding and credibility are important, but nothing happens overnight. If you start a marketing campaign make sure you have the finances to see it through."Bruce Pinsler, president, Galaxie Home Remodeling
Pinsler notes he has aggressively marketed Galaxie Home Remodeling during the past several years, explaining the company started out as a marketing company with a lot of print advertising. That gave way to nearly 100 percent telemarketing with a dialer room and more than 30 people working six days a week. “The no-call list wiped out almost 80 percent of the phone numbers,” Pinsler says. “And of the other 20 percent, 80 percent had caller ID.”
With telemarketing no longer a viable option, Pinsler recalls he went back to what he was familiar with—print. For nearly three years Galaxie Home Remodeling has been running full- and half-page ads almost daily with the Chicago Tribune and Chicago Sun-Times. More recently, he has expanded to the Daily Herald, a newspaper with circulation that covers a wide suburban-Chicago area.
Newspapers aren’t dead, Pinsler has found. “If you had asked me three years ago, I would have told you the Internet would be driving my company today. When my daughter or sons [who are in their late teens and early 20s] are running the company, that may be true,” he says.
Pinsler says he’s aware newspaper readership is dropping but contends people still trust newspapers. “Don’t get me wrong; I get nowhere near the response I got 20 years ago, but newspapers are still a vehicle for my business,” he says.
In September 2009, Pinsler started a television campaign with two local stations, WGN and WCIU. Although Chicago is a major media market that gives advertisers a great deal of exposure and credibility, Pinsler says, “It took almost a full year before the phone really started to ring from the TV ads.”
Not one to let opportunities pass him by, Pinsler is talking with Chicago radio stations to include that medium in Galaxie Home Remodeling’s growth plan
Another avenue that Pinsler has chosen to follow in sports-minded Chicago is sponsorships with the Chicago Bulls basketball team and Blackhawks hockey team. As a sponsor, Galaxie is allowed to identify itself as the “official home remodeler” of the Blackhawks and the “chosen home remodeler” of the Bulls.
Pinsler’s advice to other remodelers is to have patience with marketing. “Branding and credibility are important,” he says. “But nothing happens overnight. If you start a marketing campaign, make sure you have the finances to see it through.”
"One of the important things is making sure clients know we are strong and have weathered the storm very well.”Peter Michelson, co-owner, Renewal Design-Build
Weathering the Storm
Peter and David Michelson, owners of Decatur, Ga.-based Renewal Design Build, likewise are remodelers who have weathered the economic storm of recent years and who see the importance of keeping their name in front of customers through good times and bad.
“One of the important things is making sure clients know we are strong and have weathered the storm very well,” Peter says. “When I hear about a lot of remodelers going bankrupt and closing their doors, I want to make sure our constituents know we are not in that category. We have really nice jobsite signs and we put them out earlier than ever so anyone driving in our market area is sure to
Also important, he says, is maintaining Renewal Design Build’s advertising presence in the local print publications the company has been in for several years. “If they’re used to seeing us on page 2, we’re still on page 2 of those magazines. It’s a confidence builder for homeowners,” he says.
"If people don’t see you, they’ll just assume you’re not around anymore.”Peter Michelson, co-owner, Renewal Design-Build
Another way the Michelsons have kept Renewal Design-Build in the public eye has been seminars, which include free design consultations.
“What is nice about them is it isn’t like being at a festival where people just walk by. These are people who come to us because they know the service we are providing and want to hear from us directly,” David says.
“This is the first time we’ve done seminars at the office,” he continues. “We had done them at public libraries and at home shows but never on-site. We have a really nice office and selections room, and we wanted people to see it. One of the confidence boosters is knowing where your contractor works—that he actually has a physical presence.”
The seminars were valuable to the company and “brought in a lot of great, motivated people who wanted to know how we could help them,” Peter says.
One of the seminars, “Remodeling in Today’s Economy,” addressed homeowner concerns head-on. That topic may not be used in the future, but trends in kitchen and bath remodeling may replace it as homeowner
Presentation counts, as well. “I think it’s very important to understand you don’t just stand up there and read off of [Microsoft] PowerPoint. Practice with it; get some feedback; and make sure you use PowerPoint to support what you’re talking about and not be what you’re talking about,” Peter says.
Another way Renewal Design Build has devised to get clients involved is to offer a chance to win a free four-hour design consultation. Homeowners are asked to submit several photos and a brief description of their homes’ design challenges. “It’s really about getting people to participate; it’s interactive, and there is a call to action involved,” David explains.
Public service is a strategy that Renewal Design-Build has used successfully. Park Renewal Day is the company’s signature community-service event. Four months of planning goes into the event created in cooperation with two local governments to remove invasive species from local parks. Renewal Design Build is the sole corporate sponsor and puts up $3,000 in prize money.
"After 25 years I was pretty much out of ideas. The marketing agency provided a fresh take on the business with new logos and new ads.”Dan Thompson, president, DDK Kitchen Design Group
Teams from high schools, fraternities, local churches and service clubs compete to uproot invasive plants from specified plots in a short time. Celebrity judges have included the mayor of Decatur and a player with the Atlanta Hawks.
“We do a lot of marketing and press to make sure it’s a very well-known event,” David says.
“If we had pulled out of it this year, it really would have shown a weakness,” Peter adds. “Unfortunately, marketing is the first thing [remodelers] cut back on, but if people don’t know you’re out there they won’t know to call you.
It seems contrarian to spend money when maybe you don’t have it, but cut back in other places and keep your message out there. If people don’t see you, they’ll just assume you’re not around anymore.”
Networking on a one-to-one basis and “making sure the company owners are out there networking in the community, not just for creating sales but letting people know the company exists” is important to Renewal Design Build, David notes.
While other remodelers may have been waiting for the phone to ring, Dan Thompson, president of DDK Kitchen Design Group, Glenview, Ill., was having new phones installed in a second showroom he opened in late 2010 in the North Shore Chicago suburb of Wilmette.
“I prefer to use the term challenging times instead of down economy,” Thompson says. “We had a good 2008 and a decent 2009, although we cut our costs wherever possible like everybody did.
I really thought if we can make money even in 2009 when it was really rough sledding, we can expand. I have the horsepower and the designers, and we can really make a push.”
At the same time he opened the second location, Thompson hired a marketing agency to promote his business. “I’m spending more money than I ever conceived, but I can prorate that over two stores, so it makes it reasonable,” he says.
“I was responsible for designing the ads and coming up with new ideas, and after 25 years I was pretty much out of ideas,” Thompson recounts. The marketing agency provided a fresh take on the business with new logos and new ads. “There’s a nice buzz going on about the store,” Thompson says.
Thompson remarks his best business decision was to go with a high-deductible health-insurance policy with a health savings account benefit behind it. The expense reduction saved one job. “He’s a great guy; I didn’t want to lose him,” Thompson says.
“It was time to make some tough decisions and have some hard conversations with employees,” he continues. “I didn’t cut anybody’s salary, but they started participating much more on the health-care side. Not only was it a huge savings for 2009 but it is going to carry forward,” Thompson says. “It makes us a better company because the employees are involved in the system and know what to expect.”
In addition to opening a second showroom, Thompson has hired two designers. “When we went through the hiring process, I was getting the very best people looking to come work at DDK Kitchen Design Group, a place that was expanding. I’ve got two brand-new designers who are just amazing, and they hit the ground running. They’re selling kitchens even though the first year is usually a challenge for a new designer because they have no backlog of customers,” he says.
Thompson also has created a small profit center out of doing service calls. “It was part of salvaging one person’s position; he would take over doing service calls,” he says. “Now we are marketing kitchen tune-ups to former customers. It puts our name back in their minds.”
"[Internet] reports are a good barometer of how well we are doing, and we would be remiss if we didn’t take advantage of the comments.”Brian Kearney, chief executive officer, Neponset Valley Construction
Adding a Project Manager
Brian Kearney, chief executive officer of Neponset Valley Construction, Norwood, Mass., is another remodeler who has added personnel, hiring another project manager to better meet client expectations.
The company emphasizes exterior contracting work, such as roofing, siding, windows and decks. This segment of the market generally hasn’t been as hard hit by the economic slowdown.
Kearney was pleased by the 99 percent positive rating Neponset Valley Construction was getting from the consumer referral Web site, Angie’s List, but the 1 percent of clients who were unhappy troubled him.
“Those reports are a good barometer of how well we are doing, and we would be remiss if we didn’t take advantage of the comments to make adjustments,” he says.
Kearney determined that clients basically liked Neponset Valley Construction and the work the company did but some believed projects could have been better managed. “These were all people who seemed relatively happy throughout the process, so if it wasn’t for Angie’s List I may not even have known [about their dissatisfaction],” he says.
Kearney traced the displeasure back to the length of time a project took and how delays were communicated. “We set an expectation, and it wasn’t met,” he explains.
As a result, Kearney added a project manger to make sure communication was more timely and effective. Forums, like Angie’s List, he says, make it more important than ever to do a good job. “You can have one upset customer, and they can do a lot of damage because they have access to so many people through the Internet,” he says.