LBM Journal February 2010 : Page 25
of sales managers for one of the industry’s largest and best-known window makers. My task was to help this group better un- derstand the buying preference of remod- elers and to perhaps shed some light on the service traits they admire most from all of their suppliers. J It goes without saying that, for decades, remodelers had not been the key target sought by building product suppliers and distributors, including LBM dealers. Builders are the clients that building sup- pliers historically understand best and cater to most. It took a peak-to-trough decline of 74% on the new construction side of the market to put the needs of remodelers front-and-center. Suppliers have known for years that remodelers were an impor- tant part of the housing market; it was just more efficient to focus sales efforts on reaching builders who tend to do a greater volume of purchasing in a given year. At roughly $300 billion annually, the re- modeling and home improvement sector is now bigger than home building and that trend is likely to continue even after home building recovers. Yes, remodelers are smaller and tend to purchase smaller amounts of building products but they are more loyal and less focused on price. The upshot: if you de- velop a way of going to market that satis- fies remodelers, you will put your firm in a position to develop a steady base of busi- ness that will be an annuity for your busi- ness for many years to come. First, Understand the Types of Remodelers To prepare for my presentation to this group, we sent a short survey to our readers in order to get a handle on the service traits they valued most from their window sup- pliers. The first question, however, was more basic—they had to choose the type of re- modeling business model that best described their own. Remodelers come in many dif- ferent flavors, but at Qualified Remodeler, LBMJournal.com ❘ February 2010 ❘ LBM JOURNAL 25 ust prior to the opening of the International Builders Show in Las Vegas in January, I had the opportunity to address a group we boil them down into six basic buckets. In assembling our Top 500 list of the in- dustry’s largest firms, we use these buckets to get a general understanding their opera- tional setup. Here are the choices they were given: Full-service remodeler This type of firm handles a wide range of project types from room additions and kitchens and baths to handyman and replacement services. Exterior or replacement contractor These firms are engaged primarily in mar- keting, selling and installing windows, roofing, siding, gutters and/or decks. Design/Build remodeler This type of firm designs and builds large remodeling and renovation projects including kitchens and baths. Insurance Restoration These firms are involved in restoration work paid by insurance carriers for clients who have experienced property damage or loss. Kitchen & Bath specialist This type of firm specializes in only kitchens and baths. Other specialty These firms are engaged in a specialty home improvement business not related to the exterior or kitchens and baths. Many basement finishing system companies fit into this category. If you will be focused on growing your business with remodelers in 2010, you will want your team to be able to quickly ascertain the types of remodel- ing and/or home improvement profes- sionals that they are dealing with because there are important distinctions to be made between them. The primary dis- tinction between these six types of re- modelers has to do with the way they go to market. Exterior/replacement firms and other specialty firms tend to “make” a market, where as all other types of re- modelers tend to “take” a market. “Make” marketers tend to come from the home improvement side of the busi- ness. They focus on a single line of prod- ucts. And most importantly, they tend to spend up to 10% of their revenue on mar- keting to drive new leads. In fact, they are very disciplined marketers who tend to know the relative cost of each of their lead sources from Yellow Page advertising, to booths at home shows, to radio and tele- vision advertising. “Take” marketers are firms that tend to rely heavily on repeat and referral busi- ness. They are set up to be the first call that people make when they feel the time is right improve or remodel their homes. Yes, they spend money on marketing, but it tends to be under 2% of their revenue. Their ads also tend to be brand-building endeavors versus the call-to-action type of ads used by “make” marketers. ➤ OPPOSITE PAGE) REMODELER: iSTOCKPHOTO.COM; RIGHT) REMODELING MAN: KARINA TISCHLINGER/iSTOCKPHOTO.COM
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