In 2005, Home Improvement King, Inc. of North Hills, Calif. posted a record year. The perennial Top 500 company did $24 million in sales of windows, patio covers, texture coating and kitchens. Then came news that its single biggest source of business, Sam’s Club, was pulling out of the home improvement business nationally. Overnight, company executives David Alan and Mitch Wittenberg faced the daunting challenge of how to replace an estimated $6 million in lost business for the current calendar year.
Half-way through the year, the company now plans to not only correct the potential loss but to grow 10 to 15 percent in 2006 and even more in 2007. The key, says Wittenberg and Alan has been aggressiveness in seeking out new leads from existing sources and focus on the core professionalism of their business.
Until 2004, Home Improvement King operated under its original name Kitchen King, which it used for almost nine years from its founding in 1995. The core business at the beginning was kitchen re-facing. Then it expanded to texture coating. By 2001 Kitchen King had also expanded into vinyl windows. And two years ago the company started a division to market and sell patio covers.
In 2006, the company expects to double its patio cover business, which represented 10 percent of its revenue last year. Additionally, the company’s replacement window business will be up 25 percent over last year, when windows accounted for 38 percent of their total sales. Kitchen refacing will also grow by 25 in 2006 up from the the 57 percent of the company’s total revenues in 2005. So how did the company do it? Wittenberg and Alan make it sound easy.
“One of the things we do is get a lot of window appointments off of our kitchen leads because of the quality of the kitchens that we are putting in,” says Wittenberg. “Each of our customers get assigned their own customer service representative who holds their hand throughout the entire process. And, at the end, we do ask for referrals, which we get. This year we will do 2,400 or 2,500 jobs complete and that is a great base to work from for referrals.”
But the company has also made key investments in its effort at numerous home shows. Alan says the company spent approximately $200,000 to have an professional exhibit company build its booth for local home shows. “When you go to a local home show in Southern California,” says Alan, “it is impossible to miss us.”
Alan estimates that the company will exhibit at as many as 40 home shows within 100 miles of its Van Nuys, Calif. manufacturing facility. This basically includes a region with a population in excess of 15 million people spread out over L.A., San Bernardino, Orange, Ventura and Riverside counties. Though Alan and Wittenberg did not get into specifics about their lead sources, the home shows have clearly been the key. Their other lead sources include Internet, a small amount of television, and some direct marketing. Nowhere to be found in their budget is radio or billboard advertising.
Wittenberg says another key for their continued growth has been long tenure and overall professionalism of its 24 member sales team. “We train them. We support them. We give them paid vacation, 401k and medical on top of solid commission and bonus structure,” says Alan. “Our guys don’t leave.”
The long-tenure also translates to a high closing ratio. Their closing ratio is now 37 to 40 percent. Says Wittenberg: “our success this year will be based on the professionalism of our team.”