Finding the Perfect Customers For Your Remodeling Business
Most contractors I meet are attracted to the trades and running their own businesses because they love the work. But, when contractors allow the wrong customers to buy from them those customers can quickly take all the pleasure and reward out of being in business and working with the tools.
At the Remodeling Show last year I asked a group of seminar attendees if they had their choice of customer types who they would prefer to work for. One contractor said he only wanted to work with “nice people”.
His answer drew some laughs, but we all agreed it would be nice if all customers were nice. I also asked him what he meant by nice. His response included characteristics like pay on time, make and stick to decisions, and being kind to him and his employees; treating them with the respect and dignity they deserve. Wouldn’t that be nice!
There are many characteristics about customers that can be used to differentiate between them.
Each characteristic can make a difference regarding who they are and what it will be like to work with them. If you think back on past projects you can probably identify a variety of characteristics that make up the ideal customer type for you and your business. Who they are as people, and their personality traits, are definitely important. Also though, just as important as the personality of customers, can be other differentiating characteristics called demographics. Used in combination with personality traits, demographics can help contractors target market prospects who are also most likely to buy what they are selling.
Demographics are the quantifiable statistics of a given population of people. Smart and strategic business owners seeking to work with a specific customer type will combine several demographic variables to define the demographic profile of those customers. Then, using that profile as a guide, they do marketing in ways and places where their target customers can be found.
Here is a partial list of customer demographics contractors can use to target their ideal customers
- Marital Status
- Age Ranges
- Number of People in Household
- Income Information
- Actual Home Market Value (predefined ranges)
- Home Equity Loan and Amount
- Year Home Built
- Owner vs. renter
- Family Composition
- Length of Residence
- Fuel type
- Dwelling Type: Single vs. Multi-Family
So, give me an example of how to use customer demographics:
Here is an example of a fictitious remodeling company’s target customer description using demographics. For this example we will assume the remodeling contractor is looking to offer smaller repair type projects at high margins.
The goal of this marketing campaign is to build a customer list of people who will continually need more work due to the age of the home they live in, and or will refer the company to other people just like them who are willing to pay more to get the comfort and quality offered by a professional and legal business. We want and will use this customer list so we can market additional services to the same homeowners in the future.
To accomplish this goal the company is looking to work with married couples who either have very young children (no time to do the work themselves) and or empty nesters (been there, done all that, want to keep my free time for outdoor activities). Combined household income should be at least $150K so we know they can afford the work. Target home must be built after 1977 so the RRP rule will not apply. Target customers must either have no mortgage or a home equity loan with at least a $100K available balance so it is likely they have money to do larger projects in the future.
Oh, and we don’t enjoy working for engineers who want to tell us how to do our jobs so will eliminate them from our mailing lists.
I'll be back at the Remodeling Show again this year.
If you come to my sessions be sure to say hello!
"Choosing and Targeting The Right Customers and Project Types for Your Business"
"Success Starts With a Business Plan"