Is generating remodeling leads harder than it used to be, or does it just seem that way? Asked about their most effective lead generating source — such as canvassing, direct mail, TV and radio, home shows, telemarketing, websites and social media — 50 percent of Qualified Remodeler readers responded: None of the above, or at least none of the above in overwhelming numbers. Instead, they rely, it appears, on repeat and referral business or some variation of networking — as they traditionally have.
Repeat business and referrals still must be working, or many more remodelers would currently be employed in some other industry. But times have inexorably changed, like it or not, leaving remodelers to wonder how long repeat and referral business will continue to sustain them. Should they be doing something in addition to hoping past relationships will make the phone ring? If so, what might that be?
The good news is generating leads isn’t as complicated as it might seem, says Tim Musch, director of business development at LaCrosse, Wis.-based MarketSharp Software. Remodelers, however, are confused. “They’ve gone through a transition from getting traditional media leads, and all this Web stuff is confusing the heck out of them; they don’t know if traditional media just doesn’t work anymore or if they should put all their resources in online strategies,” he says.
6,000 Marketing Messages
“If they’re still using marketing strategies that were working for them back in 2005, they’re probably finding it to be a struggle,” Musch observes. Things have changed a lot. “First off,” Musch says, citing statistics from the U.S. Postal Service, “American consumers are subject to nearly 6,000 marketing messages per day; 52 of them get noticed; and four are actively acknowledged. Our challenge as a marketer is to figure out how to get noticed in this sea of clutter.
“Lead generation is a different animal today than it was just a few short years ago,” he continues. “The Internet has really changed the way people buy and shop, and we have to be sensitive to that in our industry.”
However, that doesn’t mean all sales leads are generated by the Internet and none of the traditional methods will work. After all, not every potential client is a twenty-something — and twenty-somethings aren’t buying too many home improvements — yet.
“When people ask me what’s working today, the best way I can answer is what will work for you is what you get really good at, and those could be things like direct mail and more traditional ways of getting business, even canvassing, where the industry got its start. There are companies doing great with methods like those because they became good at it and figured out how to make it work,” Musch says.
“But using the old traditional means is a little different now; you had better have those strategies connected to your Web strategy. Make sure that if you’re using direct mail you’re just not using the typical appeals and calls to action of saying, ‘Hey, free estimate; here’s the phone number; call me,’” he says. “You have to tie that direct mail piece into a very sound Web strategy that’s going to drive them online, and then you hold their hands throughout the process. It must be more than just having a website; it must be a very specific, systematic path you take them down to get them converted, first off, and set an appointment.
“Lead generation nowadays is really about the proper balance between your off-line and online strategies. I don’t think one or the other in most cases is adequate by itself anymore. Off-line is going to include some of the traditional like canvassing, direct-mail, newspaper ads, radio and TV, but you have to get good at making your online strategies cohesive so the message is clear,” Musch says.
One important Web strategy is speed of response. A study done by the Massachusetts Institute of Technology, Musch says, shows that after just five minutes chances of reaching someone who submitted an online request for information dropped off very quickly, even at 10 and 20 minutes. “After spending a lot of money on Web strategies, make sure you have a mechanism to respond to these people in a very timely basis; otherwise you are going to lose a lot of leads,” he says.
There’s Still Life in Old Leads
Lead generation, too, goes beyond generating the initial inquiry. A remodeling company may generate 10 leads at a cost of $3,000 based on an average cost of $300 apiece, not an inconsiderable investment. The initial conversion rate traditionally has been about 30 percent. What many remodelers don’t take into account is that of the seven that don’t buy right away, 60 percent end up buying a similar product from someone within a year. “That means there are 4.2 more sales left in those original 10 leads, which is more than you originally had when you sold the first three,” Musch says, “if you do a great job on your sales presentation and your marketing follow-up.”
He advises “multi-channel” follow-ups, maybe 10 or 15 marketing touches throughout the next year, whether that is phone calls, direct mail or email — all of which are relatively low-cost items. He suggests an automated system to manage those touches in an organized fashion.
Failure to pay attention to those leads that don’t immediately result in sales means you’re going “to have the percentage you spend on marketing begin to approach 20 or 30 percent, and that’s when your profits aren’t there anymore and you go out of business,” Musch warns.
Another tactic is to do a little micromarketing in neighborhoods where you have existing jobs and a happy customer or two, rather than shotgun marketing. Musch suggests direct mail or maybe a little door-to-door canvassing as a way to reach neighbors in similar homes with similar incomes and tastes.
Canvassing Isn’t Dead
Tony Hoty, a Cleveland-based home-improvement sales consultant with clients in the remodeling industry, feels that canvassing can still work. He warns, however, that remodelers can’t bully or nag someone into making a sales appointment. “People keep their appointments and allow a full demonstration as a result of a true desire and a true need,” he says.
Like Musch, Hoty is an advocate of micromarketing in neighborhoods where jobs are taking place. He mentions granite countertop companies that find neighbors down the street — with similar homes and similarly aged countertops — are eager to have a conversation about their countertops once they hear about a nearby installation.
Canvassing allows a remodeler to get results the same day, and the cost is reasonable. Plus, it’s predictable, Hoty says: “Once you have your group trained, you can predict you’re going to get X results on a daily or hourly basis based on your investment.”
Canvassing has changed, however, from the old days of aluminum siding “tin men,” Hoty acknowledges. “I think companies that are successful have a very sophisticated approach at the front door — everything from the ID badge to the brightly colored safety vests. The companies that are most successful do what I call ‘customer care canvassing,’ where they visit the installation first, making sure the yard signs are posted and the site is clean, asking the homeowner if they’re satisfied, possibly asking for referrals.”
Some remodelers have taken the approach to an extreme by posting custom-made, bright-orange construction-like signs in the neighborhood: Caution — ABC Remodeling Crew Ahead, for example. That way, Hoty explains, when a canvasser knocks on their doors, homeowners already know someone is working in the neighborhood and is supposed to be there.
Be More Professional
Hoty also notes many more wrapped vehicles are being used by remodelers — vehicles that have prominent graphics and signage identifying the company working in the neighborhood. “No more of those ‘free candy vans,’” he says. Law enforcement and permitting issues related to canvassing are more likely to be prompted by a call from a suspicious homeowner, Hoty advises, “so the more professional the approach the better. With uniformed individuals, decorated vehicles and the signage that says you are working nearby, the tactic is much more of a public service announcement as opposed to a sales pitch. You really have to be more professional than ever and upfront about it.”
Canvassing isn’t the only thing in the lead generation arsenal, and, in fact, both Hoty and Musch advise against a single-focus lead-generation campaign. Having a variety of lead sources, both inbound and outbound, is important. Hoty mentions traditional direct mail, radio and TV and home shows as part of that mix, as well as in-store programs in partnership with local big-box stores or other local retailers. Mall marketing is still working for people in the kitchen and bath arena. Sweepstakes marketing is another avenue remodelers might consider exploring.
“The biggest missed opportunity in the remodeling business is the inability to nurture small jobs into larger jobs,” Hoty continues. “Most remodelers have job minimums of around $1,500, below which they would never dream of sending someone out on a project where they weren’t going to make their margins. But there is a huge opportunity in going out on handyman-type repair and then turning it over to your sales department to develop a much larger scenario. The entire plumbing and HVAC industry operates in this fashion,” he says.
“There’s a big opportunity in upselling and nurturing clients, but if contractors are so concerned about serving themselves, they don’t have the serve-the-customer-and-you-will-be-rewarded mentality,” Hoty concludes.