Stacey Freed

In December, Stacey Freed of Remodeling Magazine profiled four remodeling companies of different sizes and strategies to identify how some are navigating the murky marketplace. Freed participated in a live chat Tuesday at the Integrity Facebook page to share findings about what the best remodeling companies are doing not only to survive, but thrive.

When you look at the four successful remodeling companies profiled in your piece, as well as other remodelers you’ve recently interviewed, what seems to be the special sauce? What are successful remodelers doing to make themselves better?
Freed: One thing I learned from my interviews was the importance of marketing. The companies we featured all had either increased their marketing during the downturn and/or better focused it.

There’s no real “special sauce,” per se, but successful remodelers said “No” to the recession. They just didn’t give up. They may have had to lay off employees, move back into their home office, return to working in the field, or canvas neighborhoods house by house but they maintained a positive attitude — and kept getting their name out there.

Take Anthony Slabaugh, who was featured. He determined where his real target market is and stopped advertising/marketing to a broader audience. He reached out to his specific target market. Ken Spears Construction knows that KSC sports fans are their bread and butter. They advertise on the JumboTron during games and sponsor a “Coach’s Corner” TV show.

Anthony Slabaugh Remodeling & Design, the smallest business you profiled at $500,000 in volume, has invested in smartphones for its employees with iPads supposedly on the way. It seems an odd time to invest in personal technology, but what’s the payoff for a remodeling business?
Again, Slabaugh refuses to back down. He’s moving forward and knows that the personal technology for employees will help them better interact and service clients.

Slabaugh also mentioned his company had “re-focused” marketing efforts in the past year, focusing advertisement on a single upscale town instead of 10 surrounding cities. It seems counterintuitive to traditional marketing strategy. Why should remodelers consider focusing their efforts to smaller audiences?
You really want to market to your “ideal” client. If you’re sending a postcard to everyone in your state it becomes hit or miss. You need clients who are a good fit who will buy from you. How do you determine a good fit? Go back and look at all your successful jobs. Find out what the clients had in common. All doctors? All teachers? Many live in the same housing development? High or middle income levels? Figure out who you work best with and focus advertising/marketing dollars on them.

Another company you mentioned, Ken Spears Construction (KSC), claimed it earned six jobs valued at $200,000 in work simply by sending letters, knocking on doors and leaving door hangers – a very traditional marketing approach by today’s standards. What can remodelers learn from KSC’s humble approach?
People want connections. KSC returned to neighborhoods where they were working or had worked and introduced themselves to people. If you have a chance to get in front of a homeowner and introduce yourself and your company, it’s a great soft sell. No pressure to buy. Just let them know you exist. Maybe point out some of the projects you’ve done in their neighborhood. Leave your contact information. Ask if you might have their email address.

In your article, Kathy Spears, treasurer at KSC, said her firm is “hunkering down for a long siege.” KSC chose to boost its marketing budget from 2 percent to 5 percent – a considerable hike. With fewer jobs out there, would you encourage remodelers invest more in marketing or spend smarter?
You’ve got to do both — invest in marketing AND spend smarter. I think that’s what the four featured companies are doing. Again, marketing doesn’t have to be expensive. Kyle Hunt, a marketing consultant, has a blog post today telling people about a video he saw on Pinterest that shows a remodeler giving an outdoor faucet protector to clients — it will help keep pipes from freezing. It costs about $2, takes half a minute to install, and it gets you in front of people who know, like, and trust you but who may have put you on the back burner.

 NAHB Builder Confidence Index increases in October
Calculated Risk
“The National Association of Home Builders (NAHB) reports the housing market index (HMI) increased in October to 18 from 14 in September. Any number under 50 indicates that more builders view sales conditions as poor than good.”

How new energy codes could affect every remodeler
Professional Remodeler
“A home is an investment. The value of that investment is determined by the housing market. Energy efficiency equates to lower operating costs. Lower operating costs means savings and that savings makes a home more desirable to potential buyers, thereby increasing the value of a home as an investment.”

It’s the same with remodeling. Of course you want your customers to love the job, and it might make sense that the way to do that is to offer them every choice available. But the Daily 5 Remodel has an interesting post that points out that this is probably not the best way to go about the remodeling process.

As a building professional, you deal constantly with building and remodeling decisions — it’s second nature for you. But for your customers, all this is new. Remodeling is a major investment of their time and money, and for many, the fulfillment of a long-time dream. If you present them with too many choices, it can delay the project and add confusion.

Now, we certainly aren’t advocating ignoring your clients’ wishes. But as building professionals, it is important  to use your best judgement and experience to present your clients with reasonable choices, so they can actually make a choice.

What do you think? Do you like to give all options to your clients, or offer a carefully curated selection?

9 tricks for creating a super model
HousingZone.com
“Believe it or not, if you look closely, you’ll see that some of the world’s most enduring super models have a few things in common with successful model homes.”

Summering in Style in Scandinavia
Wall Street Journal
“From the spectacular setting of Max Hansson’s seaside estate to secluded clearings in the middle of the forest, Gotland has become a prime destination for Sweden’s high-end second-home buyers and builders, who want to personalize their vacation settings.”

The New Customer Isn’t Different
Qualified Remodeler
“Everywhere you turn these days there is advice about how to handle the new (post-recession) customer. Be on your toes, on your knees, between your ears. But are they—the same folks you did business with before the recession—really that different? I wish the proponents of this new, improved customer handling would explain how and, more importantly, why these same people are somehow different now.”

A well-written scope of work ensures the service provider and the client — and even any specified subcontractors — are all on the same page, she says, and helps ensure clients are comparing apples to apples when shopping around. That might sound like a bad thing — enabling shopping around — but really, you’re doing yourself a favor by being clear about your service offering and making sure no questions go unanswered. Ricchi writes:

Like any endeavor, the success of a construction project depends on a clear goal and a well-defined path to reach that goal. If your plan is inadequate, your project will be disorganized, take longer to complete, and end up costing more money. But a clear and detailed game plan, called a scope of work, can prevent these problems and help to keep your project on track.

A scope of work refers to documents that describe the project objective and specify the activities and materials that are needed to complete that objective. If you are bidding a small project (replacing a broken water heater, for example), the scope of work may be simply a one-page written document. Larger projects will require a larger and longer scope of work. If plans or drawings are necessary, they too become part of the scope.

More details and a simple but helpful example can be found in Ricchi’s original article on FineHomebuilding.com.

ULI Chief: Inner ‘Burbs the Best
WSJ.com Developments blog
“The near-term future of real estate development isn’t downtown or in the far-flung suburbs. It’s in between. That was the message of Patrick Phillips, chief executive of the Urban Land Institute, to several dozen journalists gathered in San Antonio on Wednesday for the National Association of Real Estate Editors annual conference. ‘We think there’s a huge opportunity over the next 10 to 15 years in what we call the inner-ring suburbs,’ Mr. Phillips said.”

Certified Homes Outperform Non-Certified Homes for Fourth Year
Earth Advantage Institute
“Existing homes with a sustainable certification sold for 30 percent more than homes without such a designation, according to sales data provided by the Portland Regional Multiple Listing Service (RMLS) to Earth Advantage Institute. [...] Better sales prices were also seen for newly constructed homes with a sustainability certification. As a group, new homes with a sustainability certification in the six-county Portland metropolitan area sold for 8 percent more than new non-certified homes.”

Daily Deal or Ordeal? In Minneapolis, Going Back for Seconds
Daily 5 Remodel
“Think of daily deals sales as a long-term relationship-building investment rather than delivering a quick ROI — comparable to that of hosting homeowners for educational seminars (which Schirber’s company also holds). Also, he said, ’99.99999 percent of remodelers are not set up to handle the volume of so-so leads these daily deals generates. They should think twice about it.’ “

Housing Zone has an in-depth article that lists out examples of builders fined for not following these practices. Did you know that the highest fine for violations is $37,500 for every violation, every day. Can you afford to be fined?

Luckily, there’s something you can do to prevent it: get certified and follow the rules. Housing Zone recommends LeadPaintProfessor.com to get educated.

Additionally, Housing Zone also recommends scrupulous record-keeping. The EPA might be reviewing your records, and will most certainly do so if a complaint is made against you, so it is important to be able to produce records from the job that show you have complied with lead-based paint regulations.

According to Housing Zone, “This is just the beginning of EPA’s enforcement of lead-related issues within the residential construction industry.  More reports of violations are being released constantly. Remember, the Toxic Substances Control Act Section 402(a)(3) directs the Environmental Protection Agency to establish and implement a fee program to recover, for the U.S. Treasury, the cost of administering and enforcing the lead-based paint activities requirements. The EPA is highly motivated to find violators and is actively doing so.”

Have you had any experience with the EPA and the Residential Lead-Based Paint Regulations?

• Outdoor living areas: Are you paying more attention to things like porches and patios? An outdoor kitchen (from simple to grand) and a fireplace can add a whole new dimension for homeowners. Who doesn’t love an extra room in the great outdoors?
• Green features: Green is hot right now, but homeowners are demanding practical things like energy efficient windows and water and electricity-saving appliances. Showing that products meet federal ENERGY STAR standards will be important in attracting and informing consumers.
• Open kitchens: If the hearth is the heart of the home, it makes sense people want to be in it. Open kitchens allow that cozy feeling while allowing the cook some additional space to maneuver.
• Smaller homes: To go along with the green theme, smaller homes are easier to heat and cool, easier to clean and discourage the mindless filling of rooms.

Do you see these trends when you are building and remodeling?

7 radical energy solutions
Scientific American
“The failure rate may be 90 percent, but if any of these exotic technologies succeeds, it could significantly improve energy security and efficiency.”

Are solar panel manufacturing component prices falling fast enough?
Green Beat
“The price of polysilicon, a key component in manufacturing solar panels that capture sunlight and convert it to electricity, fell 5.1 percent to $74.4 per kilogram from $78.19 last month. Still, the decline is smaller than expected and the current prices could hurt profit margins for solar panel manufacturers that rely on crystalline silicon panels.”

How remodelers use LinkedIn
Daily 5 Remodel
“The predominant way remodeling pros use LinkedIn is to increase visibility and search-engine ratings (73.9 percent), followed closely by ‘connect and discuss with my peers’ and ‘be introduced to new prospects and business partners’ (65.2 percent for both), according to a survey of our readers.”

2035: The Home Energy Forecast
Daily 5 Remodel
“In its 2011 Annual Energy Outlook, the Energy Information Administration projects a number of changes in residential energy use in U.S. homes between 2009 and 2035, including: Per capita energy use will decline by at least 17 percent, thanks largely to more energy-efficient technologies along with population shifts to warmer and drier climates. However, these gains will be offset by a 26.7-percent increase in population growth, resulting in relatively constant delivered energy use.”

BUSTED! A True Story
Fine Homebuilding
“While researching my new book on in-law units, I heard many stories of units that had been or were illegal, hence my book’s title, In-laws, Outlaws, and Granny Flats. No doubt you’ve heard of similar situations—or perhaps have run afoul of zoning codes at some point during your building career. … Many homeowners create second units that, though compliant with current building codes, are outlaws (illegal units) because a permit was never issued for construction. Stiff permit fees and red tape are the reasons most often given for not getting a permit from city hall. But I think a case can also be made that our patchwork of zoning codes—many of them enacted in the 1950s or 60s—are badly outdated.”

The State of the Kitchen & Bath Industry
Remodeling Magazine
“At the recent Kitchen & Bath Industry Show (KBIS) in Las Vegas, Karen Strauss, president of the Masco Cabinetry Group (which includes KraftMaid, Merillat, and Quality) in Ann Arbor, Mich., addressed a group of professionals about the state of the industry. Strauss offered suggestions on how designers and remodelers can survive in today’s tough market. First, she urged professionals to face reality. Kitchen and bath sales are down 30% since 2006, she said, but even with a few small rises in consumer confidence, the market is still “bouncing along the bottom.” Though the unemployment outlook has improved, professionals need to pay attention to the quality not just the quantity of new jobs on the market.”