Far-Flung Success

Steve Shanton, age 30, operates a roofing, siding and window company that operates in several states (primarily Florida and Illinois) that he started from scratch in 2000 at age 23. In 2006, his firm, Alpine Exteriors, billed $9,450,000 up from $4.1 million in 2005.

How is it possible that a young man was able to build such an operation in only seven years? And how is it possible that this same youthful home improvement professional talks about explosive growth in the years ahead in competitive markets like California and Nevada?

First, it is clear that Shanton is smart beyond his years. Second, he’s got a working-partner model the enables him to quickly establish branch locations in far-flung locations while at the same time maintaining a level of quality control over the work that is done. Lastly, Shanton and his team are storm chasers. When big storms hit and damage gets done near one for their offices, they zero in on high-damage zones and begin canvassing for possible insurance-related projects.

“In Florida, the hurricanes (of 2004) helped our business a great deal,” explains Shanton. “In Chicago we deal with floods, tornadoes, hail storms, fires, etc. so that when people are in those bad situations, say there is a tornado in Kansas, we have the knowledge to work with those insurance companies. And we also have the ability to work with the insurance companies to develop a scope of work and help people get their coverage.”

During a recent visit to the Chicago office of Alpine Exteriors, located in northwest suburban Vernon Hills, Ill. sales manager Tracy Massenburg and a team of five sales representatives hunkered down for a morning meeting. There were details of projects in production to be attended to, and there was a lot of canvassing and selling to be done in storm damaged areas.

This small team of sales representatives cover huge swaths of northern Illinois and southern Wisconsin. But their approach is highly focused. Using maps provided by the U.S. Weather Service, they pinpoint areas where big thunderstorms, high winds and hail have done damage over the past several months. On the wall, they have a U.S. Weather Service map of the areas hardest hit by a March 21, 2007 hail storm. The map shows concentric rings of hail-stone sizes. At the center of the map is a highlighted 10-square-mile stretch of densely populated surburbia, where hail stones of an inch in diameter fell. The sales representatives are trained to go block-by-block to spot hail damage on roofs and to knock on doors explaining how their roofs can be repaired by their insurance companies.

“When people realize that their homes have indeed sustained damage and that the insurance adjusters would rather pay to replace a roof than fix subsequent interior water damage, the homeowners really see the light,” says Allen Beers, an Alpine sales representative who has been on the job less than 12 months.

Thirty minutes later, in a car approaching on a jobsite in an area hardest hit by the March 21 storm, the same sales rep points out several homes where hail stone damage resulted in Alpine reroofs paid by insurance firms. It is an area of tightly packed small ranches and bungalows. Each reroof requires only three or four squares of shingles, so the jobs, in this location are small and uncomplicated.

Once at the jobsite, a team of five workers from a subcontracting firm, begin tearing off three layers of asphalt shingles from a single-story ranch occupied by an elderly couple with a fixed income. Had the sales rep not knocked on their door and shown them the potential damage, and subsequently contact their insurance carrier, the home would more than likely gone unrepaired. As it turns out, the hail damage on the home was marginal and probably not enough for the adjuster to approve a claim, but while on the roof, the rep spotted an area where squirrels or raccoons had gnawed off a portion of the flashing and created a hole. On further inspection, a family of raccoons was found in the attic and the adjuster had no choice but to order a reroof and to contact an animal control firm to remove the raccoons.

“When it comes down to it — and this may sound corny — our success so far and our success going forward is really dependant on hard work. My brother (Midwest V.P. Derrick Shanton) and I get very involved in the details,” says Steve Shanton. “Other contractors I know in the business will make comments to me to the effect that I am too involved or so involved. But in my opinion, that is how I can maintain that customer service level that I want. Homeowners get upset, but if you immediately go over to the house and quickly address their issue, and you fix their problem, you are going to get referrals.”

Managers and working partners operating offices in Kansas, Virginia, Maryland, Georgia, Wisconsin as well as Illinois and Florida, are responsible for handling customer complaints very quickly. Customers are instructed to call their local manager first, but also to contact a toll-free number that goes directly to Shanton in the form of an e-mail if they don’t hear from a local manager quickly. Shanton says his guys know better than to let customers wait long enough that they are prompted to call him. “They don’t want that to happen,” says Shanton. The net result is a corporate culture of quick action. “We have a huge referral business in Chicago. If someone asked for 15 or 20 people that would talk highly of us, that would not be a problem.”

A Large Commercial Component

Broken down by geography and job-type, most of Alpine’s book of business in 2006 was completed in Florida. Nearly 70 percent of the revenue came out of the state where Steve Shanton spends most of his time. Shanton personally spends much of his time cultivating and bidding larger jobs on churches, offices and schools. “Schools, we feel are a particularly good opportunity,” Shanton explains. “We will get our foot in the door by offering maintenance so we are in there when it comes time for a reroof.” About $1 million of the company’s 2007 revenue will come from a large commercial job in Florida. They have bids out for about $4 million to $5 million more in commercial work.

Approximately 21 percent of the company’s 2006 revenue came from the Chicago office, 5 percent from Kansas City, 2 percent from a Wisconsin office, and 2 percent from northern Virginia and Maryland. In all, the company employs 15 to 20 full-time sales representatives, and 6 to 8 managers. From that group, the company will do between $3 million and $4 million in residential work on 250 reroofs and 70 to 80 other home improvement jobs like siding and windows. Shanton expects that the company will also turn in a very large commercial number this year of over $8 million.

All of this success for Shanton is somewhat surprising given where he started. In college, he studied computer programming, but soon after college went to work for a couple of college friends who had started a construction firm in Northern Virginia. When they opened an office in Chicago, Shanton was given the job. Shanton spent approximately two years establishing their Chicago office before the company ran out of money and, towards the end of 2000, he found himself in business on his own out of necessity. “I was literally knocking on doors alone,” he says.

In 2001, he incorporated Alpine and did about $300,000 in business. The following year that figure grew to $500,000. Then in ’03 he spearheaded an effort to get jobs in Columbus, Ohio, following the trail of some storm damage there. As a result the company did $2 million in revenue in ’03 and he was able to bring his brother Derrick into the business. In ’04, the company grew to $3.25 million. And in ’05, $4.1 million.

“When I started Alpine, I had a management background and a computer background. I was really good with spreadsheets,” says Shanton. “I learned the sales portion by having to train the sales reps in Chicago with my previous firm. So when I opened up Alpine, I was not the best salesman. I have to work that much more to do the sales. I am not one of those guys that can just walk in and sell anybody anything, like my brother. So when I started Alpine, I had to rely more on my technical background and I had to work harder.”