Home improvement professionals should not be confusing a struggling housing market with a lack of opportunity in today’s tough economy. To the contrary, home remodeling has actually been pushing forward the past few years, and is expected to continue the push well into the future. But it is definitely not the same market we knew 10 years ago, and the ability to adapt to the tsunami of change will directly impact the future success of any home remodeling business.
If you are a contractor in the residential home renovation business and you’ve been a little down on your luck, then you need to consider this. In March, the Commerce Department said new-home sales had fallen 1.6% in February 2012 to a seasonally adjusted annual rate of 313,000 homes, representing a drop for the second straight month in a row. But at around the same time of the Department’s announcement, the Kitchen Cabinet Manufacturers Association stated that cabinet sales for February 2012 increased +5.7 percent compared to sales for February 2011. Why? It seems the reality of a depressed housing market, underwater mortgages and less spending capital has many homeowners looking at home renovation as an affordable option to selling and buying.
But it is a different world in 2012 and a strong buyers market is giving consumers the upper hand. Today’s cut throat home improvement industry has Americans looking for the best possible deal and contractors bidding against myriad estimates. And unfortunately, many of today’s talented home improvement professionals are doing business like it was the turn of the century and failing to adapt to their current environment. Operating Superior Kitchens and More, a wholesale kitchen cabinet business in Miami, I personally know how cut throat home improvement can get. Here are is some general tips based on what customers are saying in America’s toughest market of Miami.
Lowering your own operating costs is essential to compete and survive in today’s market. Homeowners are looking for rock bottom prices on the best quality they can find, and they are willing to see 10 individuals just like you to find what they are looking for. And the truth is so should you. In my business, the term “custom built kitchens” meant big profits in the times leading to the housing crisis. Many of my clients had specialized and flourished in cabinet door manufacturing and custom builds, and although profitable at the time, this kind of operation required significant time and costly overhead expenses. Today, many of those same clients are flocking to high quality Ready-to-Assemble or RTA cabinets, which not only saves them on cost, but a faster turnaround time on each kitchens means more time securing your next project.
It’s important to understand that today your average consumer is finding contractors one of 2 ways. Either offline through word-of-mouth or referrals from neighbors, family and friends, or online by throwing a quick question out on Facebook and checking Google reviews. Today, the internet has become a consumer’s best friend, and a good way to check a contractor’s reputation well in advance.
First thing to always keep in mind is that there is no business like referred business. Treat every single customer as you would your top customer, even if it means bending over backwards every once in a while. You will not believe how going that little extra mile to keep your customer happy can quickly turn into your next job or two. For homeowners, getting the right guy or girl for the job is 75% of the battle, and referred is always going to be preferred. There is never a shortage of home improvement nightmares caused by bad contractors, so even if you’re estimate came in a little higher than the next one, the piece of mind from a referral could be worth those few extra bucks.
Second, there is a reason why the internet was invented, so use it. If you are not leveraging the World Wide Web and the powerful tools it has to offer, then you might as well pack your bags and move to Antarctica, because no one is going to find you in this digital age. For the most part, you’re target market, is going to be “Googling” this and “Facebooking” that, a lot. Apply a little time to each day to your online efforts, because if not, you’re losing out on potential new customers, big time! More importantly, you can do a lot of good online advertising and marketing, like social networking, with little to no money.
Bottom line, a little research on emerging consumer demands and 21st century marketing strategies can go a long way.