When brothers Kevin, Craig and Chad Carpenter started Lino Lakes, Minn.-based Custom Remodelers Inc., or CRI, more than 20 years ago, they had extensive experience in the remodeling industry. All three worked for the same remodeling contractor: Chad in marketing, Kevin as a factory rep and Craig as head of sales. They decided to pool their experience and start their own company, building success by offering a full range of remodeling services, from foundation to roof and everything in between. But things didn’t work out as they planned.
Craig, who is CRI’s president, says success didn’t come easily at first; after reevaluating the company’s services, business took off. “We found you can’t be successful by trying to be a jack-of-all-trades and a master of none,” Craig says. “We simply didn’t have enough quality craftsmen to properly take care of our customers.”
Therefore, the Carpenters decided to standardize their services and focus on windows, siding and roofing. Craig explains: “We had to go back to specialty because we started out with too much volume to handle. We went back to what we knew best and that is where we’ve built a solid foundation for steady and continuous growth.”
Windows, siding and roofing remain at the core of the business today, occupying 44, 28 and 8 percent, respectively, of the company’s 2009 dollar volume. The brothers chose these services because they are services that provide acceptable margins, few problems and quick turnaround. The Carpenters still provide full remodeling services, such as kitchen remodels and additions, but that work typically is for repeat customers who use CRI as their preferred remodeler.
CRI operates out of a 32,000-square-foot building in the Minneapolis/St. Paul suburbs. The space is divided between warehouse (70 percent) and office areas (30 percent). CRI needs a large warehouse space because the business buys in bulk. If the best price for nails is by the pallet, then the company will store pallets of nails. But the real reason CRI needs that much warehouse space is because it has developed unique and very successful relationships with some regional manufacturers.
For example, CRI began buying direct from manufacturers because the business simply outgrew its local supply centers. “When we were smaller, we needed their support, but then it came to the point where they couldn’t keep up with our volume the way we liked,” Craig says.
CRI now buys nearly all its windows, siding and roofing products direct from manufacturers. In return, these manufacturers custom fabricate products exclusively for CRI. For example, CRI offers smooth-panel matte-finish vinyl siding in longer lengths and windows with certain glazing packages—features other remodelers in the area simply can’t purchase.
The notion of having products manufactured especially for CRI began in the mid-‘90s, when the Carpenter brothers sensed the vinyl replacement window market was going to radically change. Craig says customers were hesitant about the standard pop-in vinyl replacement products prevalent then, mostly because they were losing too much glass surface, daylight and view.
“We went to a smaller window manufacturer to get it to make a fusion-welded vinyl window with brick mould, nailing flange and extension jambs for retrofit purposes,” Craig remembers. The result was a product Craig says continues to sustain CRI’s business; window replacement has become quicker, easier, cleaner and more effective, and customers are no longer losing glazing area.
CRI has enough volume to make this symbiotic relationship attractive to the manufacturer. In addition, the manufacturer must be large enough to invest in new processes but small and nimble enough to appreciate added volume and adapt to new methods. Craig explains: “The [window manufacturer] bent over backward to make a product for us, and it’s been great for both our businesses. We’ve been able to offer superior products and it has been able to drastically increase its volume. We feel like we had a big part in revolutionizing the vinyl-window replacement market.”
Craig and his brothers give credit for their success to their sales force. “The biggest reason we’re successful is because our salespeople think they can. They are ‘the little engine that could,’ ” Craig says. The sales team meets daily in the office to go over leads and reports, address product questions, discuss new products and train. “The team likes it because it makes everyone more successful and makes the entire company stronger,” Craig notes.
Obviously, sales can’t be smooth all the time. For example, after the Do Not Call list went into effect, there was anxiety in the sales office as it transitioned to a mostly canvassing strategy. CRI’s sales team canvasses with a brochure and a set script, which consists of a very brief presentation that hopefully leads to an appointment for a more detailed presentation, focusing on increased home value, energy savings and reduced maintenance. Every lead is confirmed by a manager before a salesperson is sent for the appointment.
Focusing on the necessities, such as windows, siding and roofing, has been instrumental in keeping CRI successful through this lean economy. “We’re not pitching luxury items, like swimming pools,” Craig says. “We deal with necessities that improve a home’s value and performance and save people money on utility bills. That leads to sales success and happy salespeople.”
However, when times were better, Craig says maintaining focus and gathering reliable sales leads was instrumental to remaining strong. When many others were chasing the frenzy of remodeling work brought about by the refinancing boom and the housing bubble or the low-hanging fruit of storm-damage work, CRI stayed on the same track. “A lot of guys like to change the way they do things because that stuff can be like fish jumping into your boat. But we never veer into those arenas because then our core business suffers,” Craig says. “When those jobs dry up, so does that revenue.”
CRI also distinguishes itself by working closely with a professional photographer. Craig says the company first began using professional photography as the Internet came of age in the late ‘90s. “It’s a great way of controlling our image. We started with pictures and video of our projects on our Web site, and then we got into video testimonials. It has paid huge dividends when potential customers look us up on the Web,” Craig says.
CRI now works exclusively with one photographer for all its photo needs, including brochures, photos for trade shows and events, and CRI employee photos. “Having excellent photography is an effective way of building and protecting your image. And we’ve realized unforeseen benefits, as well,” Craig remarks. “Employee morale is improved because they’re proud to show their friends and family these beautiful pictures of our work, and they like to come to the lobby and find themselves in our huge group picture, as well. It’s great for us brothers to see that.”
Craig recommends hiring a professional photographer. He also says CRI has been fortunate because its photographer thinks like a marketer and brings a lot of good ideas to the table. “When you get the chance to hire top people, it’s just awesome,” Craig declares.
Craig says his biggest challenges are the same that every remodeler across the country faces: economic and regulatory hurdles. Although he does see some expansion and controlled growth in CRI’s future, he says even the businesses that are doing well may not be as willing to invest and expand as they might have been before the recent recession. “We’ve been very fortunate to not participate in this recession. It’s because we sell necessity items and we have a superb team in place,” Craig notes.
Craig constantly looks for ways to improve the business. For example, CRI is trying new software and systems to ensure its operation is streamlined. He says he has been fortunate CRI has only needed periodic tweaking to remain operating smoothly. “We’re playing around with a few things, but we’ve always believed in frugality and common sense. We’ve been a debt-free company and if we have anything to say about it, we always will be.”
Company Fast Facts
Custom Remodelers Inc., Lino Lakes, Minn.,
Services offered: Window, siding and roof replacement, as well as complete remodeling services
Incorporation date: Sept. 11, 1990
2009 gross sales: $17.3 million
2010 projected gross sales: $18.6 million
Number of full-time employees: 130