At Windowizards, a $41 million window, door, and floor installer in suburban Philadelphia, “the Internet has become our best lead source,” says vice president David Goodman. Windowizards’ Web site produced less than 5% of its leads in 2005. Today that exceeds 15%, driven by TV and the company’s monthly investment in PPC advertising.
DIVERSIFICATION STRATEGIES Last year, at a time when many home improvement companies saw a fall-off in leads, Windowizards increased its lead flow by 20%. Now the 53-year-old company, a synonym for windows in the Philadelphia area, is set to broaden its traditional menu to include awnings and garage organization systems. “We’re open to anything that doesn’t require a permit,” Goodman says.
Increased attention to database marketing — Windowizards has a full-time computer tech on staff — has put the company in a position to cross-sell to its thousands of customers.
Many companies are searching for the product that will jump-start static sales. In the past, it was often gutter protection. Now companies have broadened their search. “When I started here, we did windows and siding,” says Tim Acri, vice president of Premium Home Products, in Milan, Ill. In 2002, the company added roofing. Last November, Premium took on a bath liner. Now the company is offering, as an add-on, a laminated flooring product that ties into its window installations. “We’re getting into cabinet refacing a bit, and full-blown room additions, instead of just sunrooms,” Acri says.
New products are a way to resell old customers. At the beginning of 2007, Renaissance Exteriors took on a bath refinishing system that Pattison says provided a $1 million-plus uptick in company sales just in the first six months of the year. An additional attraction is the fact that Luxury Bath is a product that could keep Renaissance Exteriors crews busy in the frigid months of Minnesota’s winter.
Similarly, Full Spectrum Remodeling and Mark Four Enterprises both elected to begin offering a basement finishing system this year. “By being more diversified, you’re a bit more insulated,” Full Spectrum Remodeling’s Schneider says. Marc Leen, co-owner of Mark Four Enterprises, in Fairfield, N.J., says that the company has done well with the gutter protection product it began carrying a year and a half ago, and, in the face of softening sunroom sales, it has also elected to take on basement remodeling. Many New Jersey consumers are having their basements waterproofed, Leen observes, and once that happens, they often want to finish out the basement for additional space. “So why not have the opportunity to capture some of that?”
BONUS ME Sixty-four percent of the Replacement 100 report that their sales reps are all company employees; 18% use independent contractors to sell; and 10% use a mix. More companies have moved toward an employee relationship with salespeople to avoid tax headaches and to aid in recruitment. “It’s simpler for the sales reps in the long run,” says Carmen, explaining the sales model at American Design and Build. “We have more control, and we make sure they’re using our system.”
Nearly half of the Replacement 100 offer cell phones to sales reps, with 87% supplying health insurance in some form, and 69% a 401(k) or similar retirement account. Eighty-six percent pay a sales bonus over and above commission, a figure little changed from last year. Fewer pay bonuses to installers, though the number is growing. Last year 53% said they paid installers a bonus. This year, 58% did. Often these programs are aimed at installer employees. But not always. Mark Four Enterprises, for instance, offers subcontractors an incentive for recruiting new installers. The company also rewards them for new jobs they bring in. So, “not only will you get to install it but you’ll be paid a referral fee,” Leen says.
LEADS: BIGGEST CHALLENGE The year 2006 saw the market for home improvement sales slow down in many areas, offering companies additional challenges. For Mid-Atlantic Waterproofing, the biggest difficulty, Tullio says, is “managing growth,” a challenge that more home improvement companies would no doubt have cited three or four years ago. Others note the need to adjust to a slowing economy.
“The everyday consumer may not pay attention to what happens on the stock market,” Leen says. “But they may curtail their spending.” And that, coupled with eroding home values and tightening credit, Leen says, is “a concern.” But, he adds, the biggest challenge is how to become “much better, on a daily basis, at generating cost-effective leads. Referral and self-gen are the most cost-effective ways to generate business. But it’s a continuing struggle.”
