Customer loyalty is much more complicated than it ever has been. No longer do consumers stick with one product or service provider. They may choose based on price, perks, speed, or even the way a brand or provider makes them feel.
In today’s economy, as homeowners do more research before making a large investment, such as home improvement, remodeling companies have to do more to set themselves apart from their competition and often to be considered in the first place. Some remodelers have found success by aligning with complementary businesses and services to reach new niches and/or provide a one-stop shop for homeowners considering different aspects of a remodel.
The following three remodeling companies are of various sizes, have different focuses and service different locales. Each of them has created partnerships that complement their businesses with a goal to make the remodeling experience easy and memorable for the consumer while creating a lifelong customer.
Cale Kliethermes, general manager of Kliethermes Homes & Remodeling, Columbia, Mo., recently recognized more of his clients were inquiring about energy-efficiency improvements. The full-service design-build remodeling firm’s team was installing many trusted green materials and began to consider also providing energy audits and efficiency upgrades, like air sealing and added insulation.
“We started exploring that business model,” Kliethermes says. “If we opened an energy division, what would that look like? We pretty quickly realized we didn’t want to go beyond our current business model to do energy audits, but we knew it was a hot topic and something we wanted to help provide.”
The decision not to open an energy division had a lot to do with the way Kliethermes’ business currently is set up. His typical job size is around $20,000, and an energy-efficiency improvement project runs about $3,000; Kliethermes’ business processes weren’t well-suited for smaller jobs. The idea of partnering with a company that provides energy-efficiency improvements was a good solution. Kliethermes, who leads a 13-employee team, came across Energylink, a small, local home-performance company established in 2010 by Scott Schnelle and Chris Ihler. Energylink completes energy audits and the energy-efficiency improvements recommended by the audit.
“We just started a conversation with them,” Kliethermes remembers. “They’re very service-oriented and ask a lot of questions to really understand the motivation behind people doing energy-efficiency retrofits. That was important to us because we want to understand why people do their remodeling projects, too.”
The vetting process also was important to Kliethermes because his 35-year-old firm has a good reputation in Columbia, which has a population around 100,000. “We didn’t want to link with a company that isn’t from the same mind-set as we are,” he says. “We asked them a lot of questions—things we would find important for our clients to know. Whenever we enter into an agreement with a trade contractor, we have very strict requirements for them. We’re basically holding Energylink to similar standards.”
The verbal partnership between the entities is entirely referral-based at this point. The businesses have discussed what the next steps will be should the partnership become a bigger part of their businesses. “We have talked about whether there would be a more formal agreement or any type of compensation,” Kliethermes adds. “We’ve left it open that there could be possibilities in the future of becoming more aligned.”
Although the partnership is still new and hasn’t led to any projects, the positive experience so far has motivated Kliethermes to look around for other partnership opportunities. His advice to other remodelers considering partnerships is to just do it. “I think you have to be willing to take a little risk. It’s no different than just about anything you do in business,” he says. “However, I’ve learned you don’t let a bad decision go on for long. If it doesn’t work out, we’ll stop the partnership instantly.”
Networking = Partnerships
Andrew Shore, CGP, CAPS, president of Sea Pointe Construction, Irvine, Calif., has entered into two successful and yet very different partnerships that were the result of networking. The design-build company, which has been around for 26 years, specializes in kitchens, bathrooms, room additions and whole-house remodels. About three years ago, Shore began looking for ways to increase business through new marketing channels, which led to a partnership with Costco.
Shore explains: “One of the lines of cabinets we carry is MasterBrand Cabinets. We started talking to our cabinet sales reps about alliances or partnerships, and MasterBrand happens to be a company that is partnered with Costco throughout the whole country. Our reps put us in touch with the division of MasterBrand that services the large and national clients, and Costco was one of those.”