Sell the Sizzle Home improvement salespeople are truly dedicated to their craft. They engage in role play, often daily, as a way to hone and sharpen their selling skills. They attend conferences to learn new techniques from sales teachers and trade tips with fellow salesmen. They listen to selling tapes and CDs in their cars on their way to and from each appointment.
Of course, we’re all familiar with the stereotypical roofing or siding salesman: A fast talker who pressures clients into signing a contract for a project they don’t need, don’t want, and can’t afford. Indeed, contractors of all types battle this image every day, trying to earn their customers’ trust. However, if you sit in on a specialty contractor’s sales call, you’re likely to notice that it differs quite a bit from the norm for full-service remodelers.
Some contractors work from a script, while others teach their salespeople a process. But the presentation is almost universal: A conversational feeling-out period, followed by a discussion of the company and goods being sold, usually accompanied by a demonstration of the product.
At the conclusion of the presentation, the home improvement salesman launches into the “close,” a variety of final tactics that ultimately ends with a very clear request that the homeowner do business with the company. Dial One’s salespeople are trained to anticipate potential objections — “We need to get other estimates” and “We have to think it over” are two of the most common — and how to lead the customer through a logical thought process to dispel their fears.
“Asking for the sale,” as this technique is called, is extremely important. The presentation could be perfect, the demo could have the client excited about the product, but if the salesman doesn’t ask for the business, then the opportunity goes begging.
Some full-service remodelers may protest that asking for a $10,000 window replacement job is different from asking for the sale of a $300,000 addition. True, but the principle still applies. How many of your leads are still open after a year or more because the prospective client wanted to “think it over” or didn’t want to “make a rash decision”? Asking for the sale gets the homeowner off the fence and brings objections out into the open, where you can address them.
If you’re still worried about the great difference in scale and cost, listen to what Joe Davis, tactical operations task leader for Chesapeake, Va.-based replacement contractor Mr. Rogers Windows, has to say. “Whatever product you’re selling to customers, you’re selling the sizzle, not the steak.” Mr. Rogers’ salespeople are given strict procedures to follow when first contacting a customer, and selling their product is pretty far down the list. Step one: sell the appointment, to convince the homeowner that it’s worth spending time with you. Step two: sell yourself, to develop a rapport with the potential customer. Step three: sell the company, by explaining why it’s different from others and why it’s been successful. Then, and only then, start to sell the product. “If you don’t open and close those first three doors,” Davis says, “you have no chance of getting them to sign the contract — regardless of the price.”
Produce for Profit As important as marketing and sales are, production is what makes or breaks a company. Although profit margins are larger for replacement contractors than for full-service remodelers, replacement jobs are usually much smaller, so the actual dollar figure for profit is quite a bit smaller. A 10% net profit on an $8,000 window job earns the contractor $800; a 5% net profit on a $100,000 remodel fetches $5,000. Replacement contractors make up for this discrepancy by doing many more jobs —Swimme says she knows full-service companies that complete 20 projects annually at the same volume garnered by her company’s approximately 650 jobs.
Such a small dollar amount of profit means that there’s no room for error. At Mr. Rogers Windows, they take that to heart. Once a sale has been made, one of the company’s two tech measurers/ estimators visits the site and writes down — on one of several pre-printed forms designed to cover any situation they might run into —how much material will be needed for the job, how long it will take, if extra scaffolding will be needed, etc. He then passes that information off to the company’s warehouse personnel who, at the beginning of each week, “pack” each job, meting out the precise number of screws and the exact amount of caulk needed for the job. When the crews arrive at the warehouse Monday morning, they simply pick up their package and head out to the jobsite.
At the center of it all is Kenny Lowe, Mr. Rogers’ sole production manager. The process is so streamlined and so efficient that Lowe oversees, depending on season, weather, and backlog, 11 to 14 crews completing 22 to 25 projects per week, with a total weekly volume upwards of $225,000. Lowe says the key to running a production department that will preserve the bottom line is to plan in advance, anticipating problems and resolving them before they happen. “We’ve learned that if you’re trying to fix it while the job is going on, you’re never going to succeed.”
Mr. Rogers generally works with a backlog of anywhere between 10 and 14 weeks. Lowe and the company’s scheduler plan jobs for Monday through Friday, leaving Saturday open in case foul weather wipes out a day of work. All projects are scheduled to be completed by the end of the week; if they have an eight-day project, they’ll schedule one crew to work on it all week, with a second crew doubling up on the job on three of those days, effectively squeezing eight days worth of work into just five days. “I’ve been doing this for seven years,” Lowe says, “and there have been maybe 30 times when we’ve had to carry a job over to the following Monday” — a big storm at the end of the week being the culprit each time.
Inventory control is another way Mr. Rogers preserves its margins. Recall that the company’s crews are given the exact amount they need at job start, no more and no less. However, each truck is outfitted with what Lowe calls an “overdraft box” full of extra materials, and if something gets lost, wasted, or broken, crew members may dig into that cache for whatever they need to keep the project moving. They are further responsible for keeping that box full, filing a form with the warehouse department when requesting fresh supplies.
“I don’t think people realize the amount of money you can save” by tracking your inventory, Lowe says. “If you’re paying 18 cents a screw, then five lost screws is one dollar” — and those dollars quickly add up.