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Marketing Plans a Matter of Survival for Remodelers
Generating more than 600 qualified leads a month, Joaquin Erazo, senior vice president of marketing for Case Design/Remodeling, told remodelers at the Oct. 27 to 30 Remodeling Show in Indianapolis that they need to have a written marketing plan as a matter of survival, not just during today’s hard times but as the industry moves into a recovery.
“A lot of good remodelers have gone out of business and there are builders who have become remodelers,” he said. “Nobody has a crystal ball. We might be close to the bottom, but it’s going to be a slow recovery.”
“The economy’s been tough,” he conceded, and Case has seen its leads decline by a third, from roughly 900 when the market was robust. And its cost per lead has gone up, averaging about $100 and going as high as $200 to $250 for some specialized jobs.
Past clients are the least expensive to turn into new buyers, followed by referrals and then neighbors, he said. There are some neighborhoods in Washington, D.C., the area in which the company is based, “that we can’t tap into because there’s another remodeler in there and they own those neighborhoods.”
But even when the marketing budget is tight, Erazo said, there is “grassroots stuff” the remodeler can do to drum up business. For example, you can knock on doors in the neighborhood where you are working on a project and introduce yourself by saying, “I’m doing a job across the street. If there’s any noise, please let us know.”
“It’s difficult to generate a lead if you don’t have a brand,” Erazo said. “In your branding, you want everyone in the neighborhood to know who you are and what you do and how you do it.”
Remodelers who truly are in a survival mode shouldn’t spend money on branding, he advised. But for those who are in better shape, now, while the economy is weak, “is the best time to spend money on branding. You will sling-shot ahead when the market rebounds.”
Remodelers who are steering their companies toward a growth path should be spending 1% of their gross sales on the brand, he said.
The brand needs to present the right value proposition and help convey the history that the company wants to be recognized by. Everything in the branding materials should match, he said. “It all needs to look and feel like it’s coming from your company. Testimonials can be included, and it can all be done in house.
The simplest branding can be a yard or truck sign. To remind its previous clients of its brand, Case sends them a slick remodeling trends calendar, at $11 a pop and $5 in mailing costs.
Erazo said that six easy marketing steps can succeed in getting the phone ringing again:
- First, identify your ideal client. “You really need to know who you’re going after,” he said, “even the neighborhood,” and that effort can begin by taking a close look at your current customer base. “Your past clients are the best indicator of who your future clients will be,” said Erazo. “Learn about the past customers; the deeper you get into it, the more that jumps out.”
Microsoft MapPoint can provide a good indication of where leads are coming from geographically and can even zoom into the street level. Studying these maps, Erazo was able to determine where his business was concentrated, and seeing that jobs in far-outlying areas were too thinly scattered to be worthwhile, he decided to shrink Case’s market footprint.
Using quantitative research from Claritas, Erazo said he was able to define his company’s ideal client. For example, he found that 64% of those who were influential in choosing to sign up with Case were women, so he emphasizes safety and peace of mind in his marketing materials by mentioning that Case conducts a drug and background check on its workers before hiring them and that it hires workers who are experienced. Statistics from past jobs showed that clients were predominately white-collar, so it is a safe assumption that they won’t be able to put up crown molding. The mean age of customers was 51, suggesting that the company should focus on baby boomers. While still the best target generationally, Erazo said that boomers are plateauing, have been hard hit by the current downturn and are being replaced in importance by Gen Xers, “the most overlooked sector,” who are roughly in their 30s and motivated by instant gratification.
“If you don’t know who you want that client to be, you are just using a shotgun approach,” he said.
- A complete market analysis, Erazo said, includes checking up on the competition — by mystery shopping them, listening to their sales pitch, getting into prices and job completion times. “Summarize the findings and see how you stack up compared to your competitors,” he said. “Share the results with everyone on your team” and repeat the process every six months.
Differentiating yourself from the competition should be a major goal, he said. Remodelers should look for something they can say about themselves that their competitors cannot. “You have to break through the noise,” he said. “You need something with teeth.”
- Identify a core theme and message — citing convenience, cleanliness, warranties and more.
- Use a wide range of communication approaches to acquire new customers and retain previous clients. Press releases, written in house, “are one of the best things working for us,” he said. Stepping up direct mail seemed like a good idea in today’s market, he said, because “it’s the opposite of what everybody else is doing. But there has to be a call to action, an offer, a discount.” He said he killed participation in local home shows because little business was resulting from it. Handyman-for-a-day auctions at private schools have been effective.
Previous clients receive four mailings a year, including a thank-you letter after a job has been completed, a courtesy call before the spring building season and holiday cards and gifts.
- Initiate a monthly marketing plan template. The strategy should be to drive everyone to the Web site, which is “your tangible storefront.” For example, postcard mailings can be geared to “teasing” prospects into visiting the site. The Web is one of the things that works for acquiring new clients, he said; his company is getting 150 leads a month from its site. Opportunities to sign up for a newsletter, download “10 things you need to know,” attend a seminar or schedule a consultation present opportunities to harvest e-mail addresses. “And look at the copy on the Web site,” he said. “It should be less about me and more about them,” emphasizing kitchens, ideas, trends, whatever would be of interest to potential customers. E-mail addresses can also be sorted into groups, such as one for kitchens. When they get into the site, allow visitors to choose what they want to receive.
Advertising pieces should be included in the marketing mix, making sure everything matches. And face-to-face marketing can also be effective: a “noisy neighbor” flier can provide before and after photographs and a message that “this is what we’re doing in your neighborhood.” Conduct free home seminars, including lunch, and post construction celebrations at low-key open houses the company pays for.
- And “live and die by calendars,” he said. “The numbers will tell you what to do.”
“Marketing is an investment, and it works even now,” said Erazo. “If you build a plan, implement it. Don’t react emotionally, don’t be afraid.”
In today’s remodeling industry, “building a brand is more important than ever,” he said, adding that “if you are viewed as a commodity, consumers will shop based on price.”
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