As a means to seek different ideas and to share insights for today's remodeling industry, Lebanon, Indiana-based Festool USA recently hosted a round table discussion with four professional remodelers from around the country. Moderated by Festool's vice president of marketing Michael Williams, the conversation included: Blue River Cabinetry Kitchen and Bath owner Annette Mercado, custom carpenter Dan Rush, expert remodeler and builder Mike Sloggatt and sustainable designer/builder Joshua Weir.
Powered by Festool, and published by Qualified Remodeler, this is the first in a series of quarterly round table discussions.
Michael Williams: First and foremost, I'd like to thank everyone for participating today. In a roller-coaster economy like this, how do you differentiate your business?
Dan Rush: We're a small shop now — a "lone wolf" out there. We primarily focus on high-end cabinet and carpentry, and the way we've kept busy over the past few years has just been service, service, service. We didn't lower prices; we don't advertise; but we provide the best service possible. Our success has been based on that. That's how we differentiate.
Joshua Weir: I don't really compete with contractors because I do all my design work. I do all of my own plans — everything from permitting through welding and fabrication. It's a really hard thing for my clients to understand, so I show them why it's less of a headache. I have yet to find one outfit that is a package deal like ours. And that's where our selling point is. We haven't had a day off for the past three years as a result.
Mike Sloggatt: First of all, we do higher-end jobs. We're a lot faster than our competition because of what we use. We keep a clean job site; we pay attention to the details, and that's really been the way we've gotten our reputation.
The most important factor is customer satisfaction. We've been in business for 30-odd years, and I have zero complaints against us with the consumer affairs department.
Annette Mercado: About three years ago, when we noticed the economy was changing, we took a look at everybody in town that did what we did, and we created a way to really differentiate ourselves. We'd go on to talk radio and the home shows, giving presentations about how to fix something. Pretty soon, we were the experts in town. When you do take the time to differentiate yourself, and when you see a change in the marketplace, you can avoid it hitting your pocketbook hard.
Michael Williams: How do you do that? Are you doing that just at the home shows and on the radio or are you doing this through the Web or just one-on-one when you engage with the client?
Annette Mercado: We do it every time, one-on-one, when we engage with clients. But we go on the radio about once a quarter between two local stations. You have to establish a relationship with them. You become the go-to person for questions, whatever your field is. And it makes a really big difference.
Mike Sloggatt: I did the same thing years ago. I used to write an ask-the-contractor column for a couple of local papers. It was very time-consuming, but I did get a lot of recognition as an expert. So, I agree with Annette's method; it can be a very effective way to differentiate your business. People know your name. They know who you are. They trust and respect you, even if they've never met you.
Dan Rush: When I first got started, the local library had a program where experts would come in and give a seminar, and, just like Annette and Mike, I found that by doing a presentation three or four times during the summer, I got a lot of calls. That turned into a cable access program that I did for a couple of years, and it legitimized us. There's value in setting yourself apart from the competition and not competing on your competitors' terms, but competing on your own terms — whatever they may be.
Michael Williams: Have any of you had any negative experience with any sort of advertisement or promotion or outreach?
Mike Sloggatt: I advertised in the ‘70s in the penny-saver publications, and they were more trouble than they were worth. The type of client you got from them was just looking for price. Maybe in the early ‘70s, when I was really hungry, I'd do a roof that I really didn't want to do for a good price. But I got out of that quickly.
Annette Mercado: One thing we realized early on is that you have to know where your clientele is coming from — what they're reading, watching and listening to — in order to advertise to them. If I'm trying to sell a $50,000-plus kitchen, I can't go into the penny saver. Now, if I was trying to repair a door or something like that, that's a different story.
All the mass marketing that comes in the mail — those things are targeted to people who are looking to save money, not necessarily get the best quality product or service. But what we're trying to sell is quality — quality craftsmanship and products — at a great price. If you advertise in the correct places for the customers you're looking for, you'll see it. We actually put out an ad campaign this year, and we're up 75 percent as of now.
Michael Williams: And where did you place the new ads, Annette?
Annette Mercado: It's about advertising to the right people through the right channels. I write down everywhere calls come from so I can go back and look at the source. If I do advertisements that don't generate a response, I stop it. It's not worth the money. Now, that's not saying I won't try it again. But when we actually figured out which stations our clients are listening to, which magazines they're looking at, and just targeted those areas, I mean ... our business ... we're doing great right now. Over the past four years, we've grown our business because of a targeted advertising campaign.
Michael Williams: Are there niche approaches you've taken that have seen the biggest impact? Is it by doing the radio shows or ...?
Annette Mercado: We try and make our commercials funny so that listeners remember them. Before, we would have commercials where they used the radio station people reading the copy. Then we switched to 60 second commercials that told a story. We produced and pre-recorded these ourselves. And it's very targeted. We keep track of what station they hear us on.
Joshua Weir: I have a question regarding that: What's the demographic, the size of the community that you're advertising in?
Annette Mercado: Well, we're in Bakersfield, which is basically in the middle of California. We also reach out to outlying areas, so our market includes about a million people.
Michael Williams: Dan or Josh, do you have anything to add regarding advertising and how you guys go about it, if you do it at all?
Joshua Weir: I'm putting my resources back into my photographs. If they don't get to see me, hear me and shake my hand, and I don't get to look into their eyes with integrity, I'm at the mercy of what they stumble across. I want [what they do see] to be my website and any images of my work that they might see.
If someone approaches us, or if it's a project that we actually want to do, we'll send a flyer [to potential clients] each week with a photograph on it, and we'll talk about one of our five core values. And we keep that going. And when we finish with a project, we'll include it in this design manifesto [portfolio of project highlights] that showcases a few projects — it's basically a small press book.
Dan Rush: It all comes back to word of mouth on our end. I'm trying to build up a custom shop. I'm getting older — I'm not really sure how many more installs I have left in me — so I am kind of looking forward to developing a portfolio like Josh was talking about. I'm probably going about it the wrong way —I 'm sending my daughter to college for a photography degree, so hopefully that works out.
Michael Williams: Maybe she'll throw you some free photography and design work.
Dan Rush: [Laughing] Yeah, college isn't free!
Annette Mercado: I agree that photography makes a big difference. We upgrade our camera constantly. Facebook is awesome for letting people see your photos. We put the project on Facebook, and often our customers will tag themselves in the photos. Then it goes all over their page and more and more pictures get out there. People remember the picture. If you've taken a good picture, they remember it. If you take a crappy picture, they'll remember that, too.
Dan Rush: Annette, I've wondered, what are the responsibilities on our end of taking pictures of a client's home or project? Do you need to get a written authorization or a release, or do you consider that your product so you can take pictures?
Annette Mercado: I actually asked my lawyer about that. Here in California, I can say with confidence that on your project, when you take a picture, that's your picture. You can use it in your marketing however you want. Now, if your customer says, "I don't want any pictures taken of the job," you can't use those photos for your portfolio. We still take them, basically as insurance in case anything gets damaged. But basically, we can post pictures to our sites so long as we have taken them. Now, if you didn't take them or if you're having your daughter take them as a family member, even if you pay her to take the pictures, you have to get written consent releasing her as well.
Dan Rush: Really? Okay, thank you.
Annette Mercado: I would definitely talk to your lawyer about it. When you publish somebody else's pictures, you do need to make sure you're on solid legal ground.
Dan Rush: Yeah, that was my understanding. I take boatloads of pictures, and I just catalog them to keep track of the job. I want to show that when I put it in, it was clean. But I think I can probably use a bunch of those in a promotional brochure of some type.
Michael Williams: Annette, when you post them to your Facebook page, do you tag your clients in those? Or do you allow those photos to be tagged?
Annette Mercado: We ask them to "like" our page. Obviously, we want everybody to "like" our page, but when you have a business page and you have people that "like" you, it's not your personal friend. You cannot tag them in the picture, but you can allow tagging on the page.
Michael Williams: Okay. Mike, Josh, do either of you have anything to add? Do you do much on social media for your business?
Joshua Weir: I take site photos, a lot of progress photos, just to show the process. I like showing what's going on so people understand how we craft.
Mike Sloggatt: I have a private gallery on Smug Mug, where I can showcase my work. I can make it unlisted, a private gallery, or a password-protected gallery. I can share a link with my customers, and they can see progress pictures of their job. I've found they like to share their pictures with friends. I would get a call saying, "Hey, I saw you did the Burns' residence; can you do that for us?"
Michael Williams: Speaking of tracking, how do you normally track certain things? From your contact list and customers to budget and timelines? How do you rate everything in terms of customer satisfaction?
Mike Sloggatt: I'm a terrible tracker. I'm just not organized that way. It's never been anything that I was really interested in because the work came in. You ask a customer, "Where'd you get my name?" And they say, "Oh, Mr. Smith gave me your name; I saw your job; or I saw your truck."
We're not allowed to use job site signs in the village of Garden City, so that's why I had a big trailer with my name on the side of it. But I just wasn't good at tracking. In 30 years, we've never been without work, but where it all came from, sometimes I have no clue.
Michael Williams: How do you follow-up with your clients? Is it when the project is complete? Do you follow-up a month later to see if the sentiment has changed?
Joshua Weir: I send out a questionnaire. It looks at our budget and asks a lot of questions: Did we meet the budget? Did we meet the design scope? Were we clean and efficient? We'll ask for their perception of the team that was there. Was the family comfortable around them and with the process? Basically, it's an itemized list of all service-related items. I've also been looking into setting up maintenance schedules, where homeowners can buy a maintenance schedule for a year. Maintaining a project afterwards keeps the relationship going; it keeps us in the forefront of their minds. That keeps the neighbors aware too — that we're there and taking care of things; caring for people is part of our program.
Annette Mercado: Instead of collecting the last payment when we're done, we wait a few weeks and go back with the camera and a bottle of wine to give them as a gift. Then we sit around and talk about what they liked best about the project. We get more feedback from everybody when it's all of us sitting in a group talking rather than waiting for a questionnaire to come back.
Dan Rush: I offer a lifetime warranty on kitchen tune-ups, or cabinet tune-ups, or whatever it is.
In the end, I think it really goes back to what I said at the beginning: it's all about service, service, service — the service of developing a relationship with your clients.