They’ve also found other products to take the place of the volume once generated by their sunroom sales. “We saw the writing on the wall,” says Rob Levin, president of Statewide Remodeling, in Grand Prairie, Texas. The company, which did $8 million sunroom sales at the peak of the market, now sells about $3 million in sunrooms. Anticipating that decline in sunroom sales, Statewide Remodeling (number 18 on the list) effected a strategic change that focused on “a needs product,” Levin says, adding that every survey done by the company showed that homeowners were most interested in renovating kitchens and baths. “It’s obvious that those are the things people want,” Levin says, “especially since the housing market has slowed down so much and people aren’t moving.” Using its ability to do sell-furnish-install marketing through home centers and to sell larger projects on a first call, the company shifted into not just cabinet-refacing and bath liners — short-cycle projects that can be installed without subcontractors — but into full-on kitchen and bath remodels. “We’ve gone from being an exterior company — windows, siding and sunrooms — to full remodeling mode in kitchens and baths,” Levin explains.
Creating a process that involved an expanded time frame and site inspections was the biggest challenge in making the transition. Statewide Remodeling created a field manager position and found that there were plenty of qualified people interested in those jobs. “I get five résumés a day,” Levin says.
NEW PATHS It may be that the most successful companies are the ones that, like Power Home Remodeling Group, found new ways to sell new products to old customers. Or those that reached new customers with tried-and-true marketing and selling methods. Take New Bath (number 66), a New Orleans (and now Houston) company that has grown steadily since its 2004 launch by owner Larry Closs.
Closs was an ad agency owner and salesperson who counted a number of home improvement companies among his clients. On the strength of his success as a bath liner dealer and installer, he recently opened a separate company selling windows and radiant barrier. He also took on the bathroom step-up product, walk-in tubs, for two reasons, he says: “It was a natural product progression, and you’ve got the aging population.” Closs says it’s far easier to target potential customers for a niche product such as walk-in-tubs — those aged 65 and over — because there are more lead sources, (specialty magazines, for example). “When you start targeting 65-plus, you know what they’re watching and reading,” he says, “so it’s a lower cost per point.”
The new challenge, Closs says, is taking liners and walk-in tubs a step further and finding a way to offer gut-and-pull bath remodels that can not only be turned around quickly but can be sold on a first visit.
Roughly one in five Replacement 100 companies offer bath liners. More than a quarter of the companies on the list offer insulation — a product that few companies bothered with four or five years ago when window and siding sales at three times the price of a typical insulation job were there for the taking. In the last year or two a number of window and siding companies on this list have reinvented themselves as energy companies, that is, contractors who specialize in helping consumers lower their heating and cooling costs.
One way to do that would be the way that Franzoso Contracting (number 64) did it: by launching an Energy Solutions division; separating the sales and installation of air sealing, insulation, and radiant barrier products from roofing, siding, and windows; and incorporating “green” into the company’s marketing.
AGE OF ACCOUNTABILITY With a continuing soft economy and lead costs mounting each year, home improvement contractors find that generating referrals and selling previous customers new work is a greater priority than it’s ever been. “Referrals are our biggest lead source,” says Wolfgang Wirthgen, president of WinDor, a California company that both makes and installs window and door products out of its 76,000-square-foot factory. Finding ways to engage an estimated 55,000 to 60,000 previous customers in its database is a marketing priority for WinDor. Ensuring that customers are satisfied or more than satisfied with the job the company did is critical to getting that referral or repeat work. It also helps companies avoid online bad-mouthing by unhappy or disputatious customers on Internet complaint or review sites.
Companies such as S&K Roofing, Siding and Windows, in Eldersburg, Md., and Newpro, in Woburn, Mass., have added personnel — the job is called “customer concierge” at Newpro — whose job it is to ensure customer satisfaction through on-site visits, inspections, and consistent phone and e-mail contact, among other things. Four years ago Appleby Systems shut down for a day, Kalian says, while employees listened to a customer service expert. The company then recalibrated all its systems to make sure customers come away satisfied. Today Appleby Systems offers a Platinum Customer Service Pledge, and a customer care representative is assigned to each job.
“People are better negotiators now that they have less money,” Kalian says. “And they expect more.”
