It’s virtually impossible for a remodeling firm to survive by taking the business the market hands it, which is why most if not all remodelers do some kind of marketing. There are those that do the basics, and there are remodelers who go all-out with proactive marketing efforts that stake claim to...
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It’s virtually impossible for a remodeling firm to survive by taking the business the market hands it, which is why most if not all remodelers do some kind of marketing. There are those that do the basics, and there are remodelers who go all-out with proactive marketing efforts that stake claim to their market, and their survival; these are the market makers.
Qualified Remodeler interviewed four successful market-maker remodelers to learn about their strategies, tactics and the message behind it all. Following is Qualified Remodeler’s 2014 class of Market Makers.
Des Moines, Iowa
Remodelers first must understand their prospects and clients before marketing products and services to them, says Zak Fleming, owner of Fleming Construction in Des Moines, Iowa. It’s a simple concept that’s not always followed. Fleming Construction’s target market is at the same time the largest group that needs remodeling work, and specifically prospects with kitchen and bathroom projects, Fleming notes.
“It’s pretty simple. We target those projects that are most profitable,” he says. “After more than a decade in business, we know the neighborhoods and income brackets that sell well, not that we won’t work for people outside of that market demographic, but that’s where we target.”
As a design-build firm, Fleming’s customer service is hands-on. “Our overall business plan isn’t about high-volume sales; it’s more about high-margin sales, which is a different animal than a volume-based business. In design-build you have to earn people’s trust and it takes time to do that. When they’re investing $90,000 on a kitchen, that’s different than spending $10,000 on a roof. We’re holding their hands for six months. Therefore, my business and my marketing strategy are all about relationships.”
In Des Moines, clients like to know a business owner is involved in the remodeling process. Being “hands-on” isn’t just a marketing slogan on Fleming’s website. “Every day I answer phones and follow through and follow up with clients. I’m not an absentee owner. You’ll see me on the job sites; clients expect me to be there,” he says.
“Here in Des Moines, bragging is not well received. Relying heavily on public relations is a big shift from traditional marketing efforts like advertising; we favor PR in which someone else – not us – says that we’re good,” he says.
Public relations marketing
Fleming’s basic marketing strategy is based on press releases that promote its good reputation. For example, any time Fleming obtains a new position within the National Association of Home Builders, or volunteers for a community project, a press release is distributed to local media outlets. “The articles that result from these releases produce leads and keep Fleming Construction front-of-mind with clients.”
There’s more to Fleming’s marketing strategy, but public relations is what’s working best. The strategy includes elements such as website SEO, social media, a referral program, a tour of remodeled homes, in-person shows and limited print advertising. Fleming is the only officer in the company so he works with a marketing firm, which helps build and execute the strategy.
Lead generation, for now, comes mostly from the company’s web presence, which surprises Fleming. “It’s the simple web searches that seem to turn up the most leads.” Sites such as Houzz.com also surprise Fleming in terms of their ability to generate leads. He’s happy to work within any platform that delivers, so his simple rule with leads from Houzz is to reply every time, and quickly.
Fleming believes no remodeler can survive without marketing of some kind. “People who say they survive only on referrals from past clients don’t realize their business is slowly dying. Their existing client base is slowly moving away at roughly 10 percent a year, so if you’re not generating more customers each year your business is dying.”
One of Fleming’s best practices is answering the phone. “It sounds simple, but all the marketing dollars in the world won’t convert a lead unless you follow up and follow through,” he says.
The marketing strategy for Levco Builders in Boise, Idaho, is really more about relationship/reputation management than marketing, says Joe Levitch, president. His strategy is to engage with prospects by imagining himself in their shoes, thinking about what they’re looking for then becoming the answer to their problems. “I express clearly that I am spring-loaded to do the right thing for them. I feel the remodeling industry has a bad reputation for blowing in, getting a project done and leaving people hanging by doing things to clients rather than with clients. I let them know I’m here for the long haul and am trustworthy,” he says.
“I use the analogy of buying a car to explain my strategy. All cars carry people from one place to another, but what makes someone want to buy a Mercedes rather than a Chevy? It’s because of the reputation Mercedes has for doing a great job and taking care of the client after the sale. I’m building my reputation in the same vision,” he says.
Through all of Levitch’s marketing efforts, the message is the same; he’s a problem solver. “I brag about my results on my website, and I also brag about my failures and how I turned them around. Problems happen, and a business is measured by how it responds to those problems. Therefore, part of our marketing strategy is to celebrate our successes. The magnitude of success is less interesting to me than the story behind it, and that’s what I try to share through my marketing,” he says.
Levco Builders casts a wide net by sending weekly communication in the form of blogs to past clients, prospects and anyone else interested in receiving it. He also teaches a “Remodeling 101” community education class. Other elements of the marketing strategy include community involvement, home tours and the obligatory trifold brochure, he says.
His newest marketing effort has only just begun, but shows promise. “It’s called the Contractor Café, or ‘Joe with Joe;’ I’m not sure which it will end up being. On Saturdays I will set up shop at a coffee shop after setting up appointments for people to meet me there. They get 30 or 45 minutes to discuss remodeling issues and ask me questions. They can be anybody; past clients, neighbors – anyone. It’s an informal meeting where they can meet a remodeler on neutral ground and have undisturbed time with me while under no pressure,” he explains.
Levco’s marketing strategy also includes efforts such as the Wish Granters, and a pay-it-forward campaign, through which people in the community can spend an hour or two with Levitch doing something nice for someone else. “It makes my employees feel proud to work for me.” The remodeler also participates in tours of remodeled homes with help from the local chapter of the National Association of the Remodeling Industry. Levitch recalls his all-time favorite comment any remodeler would love to hear, from someone touring a home he remodeled; “Where does the old house stop and the new one begin?”
Gutterman Services Inc.
Chris Pauly is proof that an old-school marketer can learn new-school tricks, and succeed. A balance of proven marketing tactics and newer, alternative efforts is what works for Pauly, who is president of Gutterman Services in Sterling, Va. “If you don’t know about the newest marketing strategies, you’ll get eaten alive, so you’d better learn them or hire someone who’s good at them. I found somebody who is awesome at new-school marketing and hired them as a consultant. We’re already on the third version of or website in only a few years,” Pauly says.
Pauly lists the top five elements of his marketing strategy (in no specific order) as follows: print ads for service work; jobsite signs and branding of vehicles; newsletter to client base, both print and e-mail; web site; and youtube.com informational videos.
Leads from these marketing elements are tracked using Call Source services. The Gutterman website is the greatest source of leads, followed by Google, then print advertising, postcards, Valpak and Money Mailer. “The postcards and mailers are commodities but they’re necessary evils for volume remodelers like me. If I were a design-build guy I would not spend a penny on a print ad.”
Overcoming brand strength
When a remodeling firm is named Gutterman, the name can suggest to some that it’s a one-trick pony, so Pauly’s team must work hard to familiarize its clients with everything else the company can do. This begins by getting a foot in the proverbial door with its gutter services a few times a year, which places his people in position to promote its more substantial remodeling capabilities. “Gutterman is such a powerful brand around here, in a way we’ve marketed ourselves out of a lot of work we must fight to get back. It’s strange, but in a way we’re a victim of our own success,” he adds.
“My brand is strong,” Pauly continues. “I compete against a guy who has to buy my name. It’s nutty. The catch 22 of being called Gutterman is customers asking, ‘What do you know about roofing and basements?’ When they say that, we point them to Houzz to view our work.”
The evolution of Gutterman’s customer relationship management system has helped its prospect-to-client conversion rate. Until recently it had been using a CRM platform that performed well, but was a little old. “We recently stepped into the Jaguar of CRM systems and the change is significant. The new CRM has fueled the evolution of team selling. A team consists of a sales person, an estimator and admin support working together geographically. Now, men in the field come back with ‘needs more work’ all the time.
“I believe, in general, that remodelers don’t know how to close, and specialty remodelers don’t know how to take care of clients. So, if you can find multiple people who know how to do all of that, you get them to work together and make them codependent on each other for results, and they don’t let leads slip through the cracks. Before, when we were thinking specialty-minded, we would not convert all of our leads. Now we have a nice lead funnel being fed through our service work. As long as we don’t burn the bridge we can keep the funnel going,” Pauly explains.
American Home Design
The unofficial marketing plan at American Home Design in Nashville, Tenn., is to keep marketing costs low; today costs are roughly 10 percent of revenue. The real marketing strategy, however, is to employ all forms of marketing and get prospects to respond. “I say we’re a sales company that sells remodeling services,” says Don Bruce, owner and CEO. “A lot of remodelers are successful doing it this way. It’s a timing issue, really; clients have projects to do and money to spend, and we give them an opportunity to take advantage of our products the moment they decide to spend that money.”
Many home improvement companies have marketing costs in the 20 to 30 percent range, so he’s proud of what he accomplishes with a lower percentage than that. “We put 30 to 40 leads on the street each day, and to do that you have to put a lot of data into the system. That means a lot of investment in television and internet advertising. Unfortunately it’s not always easy to convert prospects with today’s busy lifestyles when everyone is always on the go. Getting two homeowners to sit down at the same time in the same place is a hard thing to do,” Bruce explains.
Marketing efforts don’t stop once a prospect is converted to a client; success must be measured, he says. “Don’t advertise if you can’t measure its effectiveness,” he insists.
Since launching his business 20 years ago, Bruce’s marketing budget, and strategy, have remained steady. Then, ten years ago he opened a showroom. “I was thinking, ‘I can’t sit back waiting for people to call me because I’ll go broke,’” he recalls, and marketing efforts since have evolved.
The list of marketing tactics Bruce uses to accomplish his goals includes print ads, internet ads, the showroom, a mobile showroom and sweepstakes contests. “By keeping in touch with clients, inviting them to dinners and events at our showroom, and in general staying in front of them, they’re ready to refer us when the time comes.” Roughly 30 percent of AHD’s business is from referrals, Bruce notes.
The 8,000 sq. ft. showroom exists within a 20,000 sq. ft. combination office and showroom facility. Interest in the showroom took off, thanks partly to the 80,000 to 100,000 cars that pass by each day on the nearby highway. “We’re pushing that showroom all the time,” Bruce says. “We’re hosting Saturday events for the public. All of our referral parties are held there. Clients can come in and see the product before they buy it. It’s about an 80 percent sell rate for those who go to the showroom.”
AHD’s marketing arsenal includes a mobile showroom which caters to the aging-in-place client who can’t get to the main showroom. Another marketing weapon is a $50,000 remodeling sweepstakes launched almost 10 years ago. It is the main source of leads for the year, Bruce says, most of which are converted to clients.
Ultimately, Bruce says the biggest challenge is getting people to sit together for any period of time. “Once you can do that, you have to move quickly because if they don’t buy home improvement services they’ll buy a boat or something else, because they have money to spend. So, the key is to be there the day they call and respond quickly.”