ARTICLES

Homeowners are desperately seeking a source they can trust for home improvements.

 In last month’s overview, we discussed the basics of the Installed Sales industry. This month we want to begin our discussion of more specific information. We’ve given you a "taste" of the meal; now let’s get to the main course.

Please don’t take our comments concerning remodeling contractors, builders and contractors in general to be disparaging remarks made in an effort to cast doubt on their abilities. Quite the contrary: We recognize that these individuals are the backbone of our industry and that without them and the projects they undertake, we wouldn’t have any opportunity. But let’s be realistic. Some problems within the industry have helped fuel the increased demand for installed services; we’ll address them in a future column. For now, let’s look at some related issues.

Today’s homeowner has changed from the profile of the recent past. They lack the skills, time and inclination to do many home-improvement projects themselves. This, coupled with the negative publicity given the remodeling industry by investigative news shows like 20/20, Primetime and Dateline, has left the homeowner with some frightening options: "Do I deal with an unknown and hope for the best, or is there a single, reputable and known entity that I can turn to?"

You have become that single source.

Most of you face the same issues with your customers each and every day. Someone comes into your store and discusses a replacement window, entry door system, deck, kitchen or other similar project, and as soon as he gets the pertinent information on price and availability, the next question becomes: "Will you install this for me?" The number-one concern is, who will take care of the project? In an overwhelming number of instances, if you don’t—or can’t—arrange installation for customers, they simply will walk down the street and find someone who can, be that a specialty window and door company, custom kitchen company or a "box."

What types of projects/products do they want installed? Our sources tell us that the following is a relatively accurate breakdown of the types of projects that made up the approximately $130 billion spent in 1999 in this industry.

Clearly, Maintenance/Repair is by far the largest segment, and includes most handyman items. In fact, Walt Stoepplewerth recently discussed in one of his columns that the handyman and small-job market alone was approximately $50 billion annually. And that’s just for small, "fix-it" type jobs! In addition, he also states that you can take your market and multiply the number of its owner-occupied homes by a $1,500 potential per year, or the total population multiplied by $400-$500 per year, which includes rental property and condominiums.

Okay, so we understand that Installed Sales is big business, but where do you fit in? Is there a demand in your market? Look around your neighborhood. What is the average age of a home in your immediate area? How many homes in your community are 15 years old or older and starting to need repair? Now, go outside your immediate market area, maybe as much as 20–30 miles. We use this number simply because most retail lumber and building material operations have a market penetration, or sphere of influence, that typically extends 7–10 miles from the store. Now, with an Installed Sales program, that market penetration will grow considerably, because people who want something done by a reputable source will drive this distance. Your store provides a credible image, offers trust and peace of mind and eliminates the fear of dealing with the unknown.

Let’s take a quick look at what homeowners want. Fully 65 percent today place the following issues over price when selecting a home improvement project provider: guaranteed work, reliable service, quality workmanship, honest dealings, good communications and minimal inconvenience. Now, who are those discriminating customers? They are better educated, more enlightened and demanding of a higher level of service quality than they have received from independent remodelers and contractors.

Now that we’ve looked at the market, and at the customers that drive that market, how can you get to them? Good news: They are already in your store. They come into your store every day searching for answers to home-improvement questions. All you have to do is capitalize on the image you’ve been building over the years. You and your store can provide the "brand equity" that today’s homeowner is searching for.