Asset Database All this can make a contractor’s database his most valuable asset. Database leads are more productive than fresh leads and the additional cost of working them is insignificant next to the original cost of obtaining the lead.

“When you get back into those rehash appointments, the demonstration rate, the close rate, the average sale, and the net business rate are all substantially higher,” Schulz says.

This virtual gold mine is close at hand, yet most contractors don’t tap its potential at all or, if they do, they just scratch the surface. The reasons? Some contractors don’t think their business is sophisticated enough to do data mining. Some aren’t comfortable with computers. Others have been burned buying software in the past. A lack of management expertise is a fundamental obstacle to many, Yoho says. The average remodeling contractor, “spends most of his day thinking 48 hours in advance. They don’t plan,” he says. “[Data mining] is so easy to do but almost no one does it.”

Deep-rooted ideas about selling hold back others, says former home improvement contractor Tim Musch, founder of and now director of business development for Advanced Marketing Concepts, La Crosse, Wis., developers of the MarketSharp direct marketing, lead tracking, and business management software system.

“Old-school home improvement trainers used to teach the sales guys to do anything they had to do to sell the homeowners,” Musch says, “even if it meant staying for dinner or staying overnight — whatever you have to do — because if you don’t sell them the first night out, you’re not going to sell them at all.”

But that’s just not true, he says. His experience working with contractors indicates that, on average, a contractor sells 3 out of every 10 leads in the initial selling period, whether it requires one call or more. Of the remaining 7 leads, some 60% will buy a similar product from someone within a year.

“That’s 4.2 more sales that are available to anybody,” Musch says. Stay in touch with those customers by mail and/or by phone, using information in your database, and those sales can be yours.

Product of Experience The experience of contractors who systematically mine their data bears this out. Weather Tight got more than 36% of 2005 net sales from mining its database, Schulz says. That amounted to more than $3.5 million generated from rehash, referrals, and “old customers,” all of which Schulz considers the result of data mining and obtained simply by maintaining contact with customers in the company database through periodic mail and phone calls.

Database marketing can be simple or complex. It’s a flexible tool that the contractor can tailor to his business model, style of selling, and marketing preferences. Ohio Energy/Improveit Home Remodeling uses a combination of phone contact and direct mail —more than a million pieces a year go out — to maintain contact with the nearly 300,000 names in the company database and to generate new sales. Leader says that the company generates more than 22% of sales “just doing more work for existing customers.” He adds, “We’re making those sales happen because those customers aren’t calling us.” Another 12% comes from rehash, and 15% more is gleaned from working “existing database leads,” i.e., leads gathered at events, from advertising, or through promotions such as sweepstakes, which never, for whatever reason, become an in-home presentation. Instead of falling through the cracks, “you’re doing contact management, working them through your database, and continuing to call them,” Leader says.

Interested Parties Steve Rennekamp, owner of Energy Swing Windows, Murrysville, Pa., approaches database marketing a bit differently to generate what he estimates is half the company’s total business. Energy Swing fills its database — now consisting of 250,000 contacts — primarily with names gathered at events. “These are all people who at least have raised their hand to say they’re interested in our product,” Rennekamp says.

At the event itself, Energy Swing demonstrators try to set a lead immediately. But if that doesn’t happen, they’re instructed to tell people upfront that the company will not call them. The entire database marketing outreach is by mail.

From its lists of homeowners, Rennekamp selects prospects on the basis of location, income, and the age of the home. Energy Swing sends three “rapid fire” mail pieces during the first month. The company will continue to mail what Rennekamp calls a quarterly “very soft” newsletter, generally in conjunction with an open house.

Rennekamp says that continual, low-key contact enables him to build rapport with contacts. Consumers are wary of home improvement contractors because of the industry’s dubious reputation. “Mailing them over a period of time builds trust and confidence,” he observes.