A Clear Vision Of The Remodeling Industry For The Upcoming Year
Move over Nostradamus. It’s time to peer into the crystal ball and see what 2014 holds in store for remodeling contractors. Marketing–wise, or course. Fortune telling can be risky business, but I think you’ll agree that these 14 predictions aren’t just bold—they’re spot-on.
6 Things That Will Go UP In 2014 (Predictions 1 through 6)…
Going Up: DVR Usage – Pay close attention if you do any television advertising (and you really should be). The TV reps will show you a hoard of data to convince you that the DVR trend is leveling off and that most prime-time shows are still watched live. Don’t believe it. If you dig into that data a little further, the trends—and ramifications of those trends—are devastating for remodeling companies. The overall DVR adoption rate is right around 50% of all households. That rate soars to over 70% for home with over $100,000 in income (read: your customers), and that same group watches the least TV anyway. Solution: Buy local network affiliate news—think about it: nobody records the news and watches it later.
Going Up: Home Show Attendance – The recession is clearly over, and the stock market is hitting all-time highs again. This means that most folks’ portfolios have bounced back, and the fear of investing major dollars in home improvement has gone down. This is all around good news, and will cause a surge in home show attendance this spring as pent-up demand continues to get released in the market. Skip this year’s home show at your own peril—it’s going to be a good one. Also expect more competition at the home shows; take proactive measures by contacting Monopolize Your Marketplace about our Home Show Package that can help you cut through the clutter and set more appointments than ever.
Going Up: Unsolicited SEO Analysis – As the importance of internet marketing for contractors continues to grow, expect more and more unsolicited invitations for “website reviews” and “SEO analysis” than ever before. They usually come via email with subject lines like “SEO strategy for besthomeremodeling.com” or similar. I’ll go out on a limb and say you’ll get 37 this year. First of all, don’t trust companies that use spam to advertise. Really, just don’t. Next, don’t trust non-industry specialists to handle contractor SEO. Not smart. Finally, realize that there is a lot more to good SEO results than just showing up on Google’s first page—you also have to have a home improvement website that can actually, you know, convert traffic into leads and sales. Very few of these so-called SEO gurus know anything about conversion. If you need help in this area (SEO or conversion) email me at rharshaw@mymonline.com and I’ll send in the cavalry.
Going Up: Advertising Rates – Two reasons: First, obviously, is the entire marketplace is getting more robust, which leads to a higher total volume of advertising, which leads to higher rates. The second reason is political advertising… look for the spike in rates to start in July or August and continue clear until early November. Depending on the races in your local market, the effect could be anywhere from barely noticeable to massively disruptive. Another reason to hate politics!
Going Up: Your Average Sale Price – With the market loosening up a little, you’re going to see consumers who are less price sensitive. The “Chuck in a truck” contractors will always have their place, but increasingly that place will not be competing with you. More and more homeowners are going to be willing to and expect to pay more for quality in 2014. Make sure that your contractor website, your literature, and your sales presentations are all double checked to make sure that your value proposition (IDENTITY) shines clearly through. If you want the bigger bucks—and they are available—you have to earn them by demonstrating you’re worth it.
Going Up: Your Marketing Budget – If you’re fortunate enough to grow, don’t give into the temptation to simply stuff more of the extra money in your pockets. Instead, invest (key word: INVEST) a portion of profits back into your contractor marketing budget to make sure the gravy train keeps coming in 2015, 2016, and beyond. If your historical marketing budget has been 12%, make sure, at a bare minimum, that you keep it at 12%… and if possible, bump it up a point or two. You’ll never regret it in the future.
4 Things That Will Go DOWN In 2014 (Predictions 7 through 10)…
Going Down: Ad Response Rate – Funny thing, right? Ad rates are going up and people are more willing to buy than in recent years… yet response rates are still going down? Yep. You can thank Steve Jobs for this one—when he put the internet in your pocket starting in 2007 (iPhone anyone?!), he also reduced consumers’ need to see/hear traditional advertising to remind them to take action to buy something. Now, when John Smith gets the vaguest idea to replace his windows, he just looks it up on his phone (or iPad, or wireless notebook) and instantly “scratches the itch” of whatever he was thinking about. In 2014 smart marketers will spend marketing budgets capturing and converting web traffic… and using traditional advertising (TV, radio, newspaper, etc.) to influence future buyers to choose them in the future. Sorry, but direct response advertising simply doesn’t work as well as it used to, and it’s only going to get worse.
Going Down: Closing Ratios – The recession is over and the purse strings are opening back up, but there is still a sour taste in many homeowners’ mouths. This means that even though they are ready and willing to buy now, they are still going to be very selective about who they choose to do the job. The one-call close is the victim of this recession-altered behavior. You can fight back though—make sure you do everything possible to facilitate the decision making process in your contractor marketing. Shore up your home page with more definitive identity. Add more social proof in the form of customer references (automatically given to web visitors) and customer reviews. Rewrite your “about us” page with a humanizing narrative about who you are and why you do things the way you do. Get rid of the canned FAQs on your site and replace them with the REAL questions that really get asked by most prospects… and steer people in the direction of your identity. Then when you show up to SELL, you’ll be way more likely to get a quick and definitive YES.
Going Down: Employee Loyalty – Yep, another casualty of the booming home improvement market. You might be surprised to see some of your best employees jumping ship to make a few extra bucks from one of your competitors… or worse—to start their own company and become a new competitor. Take time now to check your non-compete restrictions, and evaluate which employees are “must keep” versus “would be nice to keep” and consider proactive measures to keep them happy. Don’t be that owner who gets blindsided by a key person leaving a gaping hole in your ability to perform. An ounce of prevention can be worth a pound of cure.
Going Down: Arm Twisting – Heavy-handed sales tactics can be found in this wing of the museum, right next to the T-Rex model and the photograph of the flaming Hindenburg. Your prospects are smart; they’re affluent; and oh yea, they’re humans. Treat them like all of the above and they will respond in a most positive way. Let the vultures of the industry duke it out with crazy pricing games and margin-decimating price matching. Set your sail with a clear and articulate Identity, respect your prospects by facilitating their decision—not forcing it—and watch the profits roll in.
4 Random Predictions That Have An
75% Or Better Chance Of Happening
(Predictions 11 through 14)
You Will Lose At Least One Sale To An iPad – It’s 2014; it’s time to transition your pitch book to an iPad presentation. I know there will be plenty of Jim-Bob-Contractors out there still shooting from the hip or toting the old-school flip chart. But higher-end contractors are going high-tech, and the iPad should be high on your list of tools to employ. If you don’t, I can flat guarantee that you will lose at least one—and probably many more—sales to slicked-out iPad-toting salesmen who simply outclass you. Don’t be outclassed.
You’ll Be Tempted To Diversify – Don’t Do It. Prosperity has a way of changing people’s’ mentality from “focus on doing what it takes to get by” to “I’m a genius, I’ll bet I could do anything!” Don’t give into the temptation to add new product lines, expand faster than you have infrastructure or capital to support, or expand into areas you just aren’t that passionate about. Stick to your core, and focus on ways to expand market share and improve your customer experience. Focus, focus, focus.
Your Customers Will Become Your Best Salesmen – We live in an internet world where 99 cent decisions about what smartphone app to buy are heavily influenced by customer reviews. So what does that say about a $13,000 window job or $52,000 kitchen remodel? You had better put full effort into gathering and publishing a high volume of uber-specific customer reviews on your home improvement website, that’s what! If you don’t have them, prospects will keep looking until they find a site that does. It only takes them 11 more seconds of Google searching to find them. The good news is that services exist that make the gathering and publishing of customer reviews effortless and automatic. Contact Monopolize Your Marketplace about customer review services ASAP if you’re not already on the bandwagon. An no, old-style (2010-style) testimonials won’t cut it anymore.
Your Personal Life Will Improve – As your business grows and money flows more freely, you’ll have less stress and spend more time nurturing the relationships that really make a difference in your live. Embrace it.
© 2014 – 2016, Rich Harshaw. All rights reserved.
