Stimulus Gets Credit
Dale Brenke, owner of Schmidt Siding and Window Co., in Mankato, Minn., describes 2008 as “the most difficult year” he has had managing a company in his 30-year career. He concedes that he was blindsided by the events of last fall and their effect on sales and especially on consumer spending attitudes. “Sales were poor and profits nonexistent,” he notes. For many, in the bleak beginning of 2009, the American Recovery and Reinvestment Act (ARRA) ? with windows and roofing as its biggest product beneficiaries ? couldn’t have come at a more opportune time. “If nothing else, it got the phone to ring,” says Shane Schuckman, co-owner of Renewal by Andersen of Las Vegas/Phoenix. “It gave us a foot in the door, and that’s all we can ask for.” In a local economy particularly hard hit by the housing market meltdown, one where “people were literally not doing anything with their houses,” Schuckman estimates that the stimulus lifted his company’s sales 20% to 25%. “I often wonder where we’d be without it this year,” he says, noting that when the company opened in Phoenix three years ago, “there were 18 pages of window replacement companies in the Yellow Pages.” In the most recently published edition, there were two. “Though that may be because they’re not advertising in the Yellow Pages,” he adds.
At Southwest Exteriors, siding sales were so-so, but the company ended up hiring an additional sales representative mainly, Barr says, because of increased window business due to the stimulus program.
Chris Cardillo, president of Castle Windows, in Mount Laurel, N.J., guesses that tax credits lifted his company’s sales 5% to 10%. He had hoped they would “flood” the company with customers. For Castle Windows, where lead costs and marketing as a percentage of revenue are both up, the tax credits became a great closing tool. “When we leave, [customers are] 100% educated on what it is and how to get it,” Cardillo says.
Closing Challenge
Tax credits have proved a powerful closing tool for many companies, especially those selling windows. At a time when consumer spending was falling month after month, beginning in September 2008, persuading prospects to buy was becoming increasingly difficult. Many Replacement 100 companies were faced with the challenge of keeping a smaller salesforce motivated when “my job situation is uncertain” joined the list of sales objections most frequently voiced in the living room. The key, managers say, is to provide salespeople with the responses they need and to manage closely and constantly through trying times. Marketing and sales metrics must be attended to daily.
“Before, if a guy didn’t sell so many jobs in a row, that wasn’t a big deal,” Cardillo says. No more. “[Now] you have to stay on top of every little fluctuation.” Doing that gave him the idea to introduce a companywide bonus system, which Castle Windows did last year. It’s based on hitting revenue targets and includes not just sales reps but admin and installers as well. “The goal is to get the people inside to provide more support,” Cardillo says.
Though it’s been a rough ride for many companies ? even those whose sales have grown or held steady would concede it’s not easy ? most see a somewhat improved selling environment this fall, especially as compared with the dark days of a year ago. “We started to see things pick up about two months ago,” says John Aurgemma, vice president of Rhode Island Home Improvement, in Warwick. “We’re seeing a lot more positive attitude in the marketplace. And more customers apt to say ‘yes.'” Brenke, who cut back Schmidt Siding’s media outlays, has instead hosted a series of four open-house events at the company’s downtown Mankato, Minn., showroom. On Oct. 24, he is hoping to entertain 1,000 people.
