The Design Builder's Blog

Remodeling Prospects Need A New Process For Coming To A Buying Decision

Consumers need a new process for coming to a decision.  This definitely includes consumers considering remodeling projects at their homes. They can no longer assume they will increase the value of their home just because they remodel.  Even low price might not be a compelling reason to buy.  They need new reasons to go forward, and it becomes the salesperson’s job to help them find those reasons. 

Every consumer must go through due diligence before making a buying decision and this is further complicated because each one will have a different path; one that is personal to them.  They are journeying into new areas and might not even know how or where to get started.  The new remodeling salesman must be a decision engineer, methodically guiding consumers through their specific emotional and intellectual considerations relative to making a confident buying decision. 

Notice I said guide them

They must feel like the decision and the process they went through was their own and that they didn’t miss anything that should have been considered.   The old school approach of telling or convincing a prospect what to do will no longer work.  Once they come to realize a process for making their decision, the salesman must then become a trusted adviser, with the knowledge and ability to offer appropriate design, product and project delivery options. 

The consumer has come to expect options

Manufacturers can and should provided information and education relative to product options, differences and price points.  Retailers selling to remodelers should be getting this information from their distributor and manufacturer reps.  The entire supply chain should be sharing this information with contractors through trade shows, educational events and personal interaction.  

To improve sales and ultimately business results, I suggest remodelers find good retailers to do business with who will provide this information; then attend their offerings and study up.

Guest Blogger: Spencer Powell, Inbound Marketing Director at TMR Direct.  Spencer joined TMR Direct to spearhead their social media marketing efforts and to assist clients who want to implement social media marketing campaigns.  He also specializes in helping builders and remodelers who are frustrated with the lack of leads they are getting from their current websites.  Recently Shawn and Spencer have teamed up to help several of Shawn’s consulting clients.  First, Shawn helps remodelers strategically identify and decide their target customer(s), project type(s) and niche(s).   As an Inbound Marketing Certified Professional, Spencer and his team then help remodelers get found by their targeted prospects on the web. 

How Your Website Can Get You Involved in the Homeowner's Sales Cycle

Just think about it for a second.  That's how you find EVERYTHING today.  Yes, I'm talking about Google.  If you're looking for a product or service, there's a good chance the first place you'll go is the web.  This is where your research process begins.  Well, it's the same for homeowners who are looking to remodel their kitchen, bathroom or any other part of their home.

Helpful information is key

So, how can you ensure that you'll be a part of their research process...and how can your website help you do that?  There are a few factors that we want to look at.  First, your website needs to have lots of helpful information that your prospect might be looking for.  This could be information on the process of going through the design phase.  It could be warning signs to look out for when selecting a contractor.  It could be information on cost and why certain things cost more or less.  It could be information on change orders.  Think about it.  The more information you can provide to your prospects, the fewer questions they'll have when they contact you. 

BUT...most importantly you'll position yourself as a trusted advisor in your industry because you're the one helping them make an important decision.

Google LOVES content

In addition to becoming a trusted advisor, the more content you create on your website, the more chances you have to actually get found in search engines like Google.  Google LOVES content, so the more you create, the more you'll be found.  Just think of your website like a planet.  The more pages and articles you create, the bigger the planet gets, and the more gravitational pull it has.  So, you'll be pulling in more web visitors. 

Once you have more prospects coming to your website because of the content, you'll notice that your website actually helps you get heavily involved in the homeowner sales cycle because you're helping them with their research.  In addition, your information doesn't all have to be readily available.  It's a good idea to have and offer much more in-depth information that a visitor can download.  This might be in the form of an eBook like "10 Kitchen Design Trends for 2012".  However, in exchange for being able to download it, they need to provide their Name, Email, Phone Number and Zip Code.

Once captured, nurture those leads!

Now you're in great position to solidify your company as one of their options for helping them achieve their goal.  This is where lead nurturing comes into play.  Lead nurturing is simply sending out helpful emails with more information that helps your prospect do research.  These emails allow you to stay in touch with the prospect all the way through the sales cycle.  How to execute a lead nurturing campaign is the topic for another post, but are you starting to see how your website can really get you involved in the homeowner sales cycle?

What are YOUR thoughts on this?  Are any of you using your websites to participate in your prospects’ sales cycles?

Should You Add Design/Build to Your Company Name?

Naming or renaming your building or remodeling company is an important decision. Many business owners may not realize this significance or the long-term impacts this decision can have. Many things can and should be considered before committing to a business name, far more than can be covered in this blog post. The purpose of this blog post is to focus only on what architects and other design professionals may think about your business if you add the words Design/Build to the business name.

I suggest that you don’t look at this information as an architect-bashing session or as a complete guide for making your own decision. Concerns expressed here are based on real experiences shared by contractors. Use what is being shared as a start toward qualifying what you should consider. Then, Design/Build your business’ name.

Will architects be willing to work with you?

If they find the words “Design/Build” in your company name, many architects and design professional may be hesitant to work for you as your employee or as a sub contractor.  Depending on their belief system, education, or what I call their “reality”, there could be several obstacles to their willingness to work for or partner with you. Here are a few:

• They may be challenged if no longer the one in control of the design process, the construction methods and the client.
• Removing the bidding process may send shivers down their spines.
• Not putting their name, but rather your company’s name, on the plans may feel completely unacceptable.
• Not being the guardian or protector for the homeowner and the homeowner’s money may feel completely unacceptable.

Will they refer you to their own clients?

Assuming your business is still willing to bid, if they see the words “Design/Build”, will an architect or designer refer you to their clients? Other legitimate concerns could include:

• Will you embarrass them if their plans are incomplete or not quite buildable? 
• Will you start offering value-added construction options or product alternatives directly to the client without first consulting them?
• Will they be afraid you will steal the design process away from them,
• Will you expose mistakes in the plans or overlooked zoning issues due to your own acquired expertise?

Read more of Shawn's thoughts about adding Design/Build to your business name.

Don’t Underestimate Your Estimating System’s Potential

Knowing what to charge clients for the work you do is often the difference between long term success and eventual failure for the business. Many contractors look at estimating simply as a way to determine the cost of a project. In the traditional design-bid model of project delivery, this simplistic approach may work, assuming your sell price generates enough gross profit to cover your overhead and profit requirements. However, if you’re doing design/build, and your current estimating system is limited to only producing the number you charge clients for a project, you may be missing out on many other possible benefits.

Your Estimating System Should Support Your Business in Several Ways

If you think of Design/Build as a way of doing business, your estimating system must become a tool that facilitates how you do business, not just a way to get to the price.   Here are several ways a Design/Builder or a remodeler can maximize the potential of the method and system used to do estimating:

• A design/builder’s estimating system should be fast and easy to use.
• A computerized system should be used that allows the estimator to concentrate on estimating, not adding up numbers.
• All estimating cost assumptions for labor must be accurate in terms of time per task.
• The system used for estimating should have the ability to use your company’s actual burdened labor cost per hour to determine total labor cost per task.
• The system should also allow for on the spot “what-if” adjustments to quickly estimate the effects of any changes or suggested alternatives to the project during design.
• To increase accuracy, estimating should be done so it is comparable to the company’s job costing system and job costing categories.
• Information within the estimate, and job costing, should be broken down to a level of detail that allows the insight you need to make future estimating adjustments.
• The estimate should also help you or your lead carpenter produce an accurate materials list, not just a materials cost allowance.

Below is screen shot of a simple estimating spreadsheet template used to estimate a deck project. 

Request a free working copy of the template for your own use.

Read more about the potential benefits of your estimating system

The Design/Build Remodeler’s 10 Step Plan For Long Term Success

A long time ago a remodeler in my NARI Chapter who was just starting his business asked me for advice about how he too could have a successful and profitable business.   Seeking to keep my response simple and to the point I came up with a list of nine steps.   When I was explaining my list to him he asked where he would find the time to do all these things.  He said he was already straight out trying to sell and complete work.   That’s when I added step number one to the ten step list below. 

Success won’t happen by accident.  If you are disappointed with your level of success use the list below to help identify what you need to do to get your business on the path to planned success.

Recharge Your Batteries!

Step ten might be the most important.  Unless you take time to recharge your batteries they will go dead.  My experience has shown me that business owners get a lot more done and can remain positive even during challenging times if they take the time to reward themselves for all their hard work and effort.

“To get to the next level in your life will require a higher level of thinking than the level of thinking that got you where you are”   Thomas Edison

The 10 Step Plan For Success

1. Make time to create and implement your plan.
2. Establish your criteria for personal and financial success.
3. Establish an obtainable volume of sales for the coming year.
4. Create a budget based on historic information.  Adjust as needed to achieve current goals.
5. Establish the Mark-up required to provide planned gross profit.
6. Accurately estimate project costs and mark-up as planned.
7. Find your customers and sell them projects at the price required to obtain planned gross profit.
8. Monitor production and overhead expenses.
9. Adjust business as needed to maintain path to planned net profit.
10. Enjoy planned personal and financial success.

Remodeling Trends for 2012 For Design/Builders

One way Design/Builders separate themselves from their competition can be the design talents and knowledge they bring to the overall process.   Many remodeling customers are looking for help with taking advantage of new product offerings and trends in the marketplace.  The list below is a collection of links to articles and information regarding current remodeling trends for 2012.  Please suggest any additional links you feel I could add to this list.

8 Smart Budget Curb Appeal Makeovers

Remodeling Improvements That Entice Buyers

Garage Remodeling Ideas And Tips

9 Unconventional Ways to Improve Your Home

25 Manliest Homes in America

Next-gen universal design for bathrooms and kitchens

Interior paint trends for 2012

Top Trends in Home Renovations

Who Owns the Plans?

Consider the definition of Design/Build.  In a true Design/Build situation, the purpose of the plans is to facilitate construction.  Otherwise, there is no purpose for offering design unless you are offering design as a separate service. If that is the case, then it is not design/build.  In true design/build, because the purpose of creating the plans is so the Design/Builder can build from them, the client is not entitled to the plans unless they commit to construction with the Design/Builder.

The above may upset some.  Perhaps consider if you are a Design/Builder with a Design/Build Business, or you are a Remodeler who sometimes offers Design/Build as a service.

A Way of Doing Business

In most cases, doing the design before you get a commitment from your clients for the build puts you into a bidding situation, something most Design/Builders seek to avoid.  It’s also the reason many business owners give me for getting into true Design/Build to begin with; to get out of the “bidding game”.   These businesses become “Design/Build Businesses”.  They have chosen a niche to concentrate on and to build a brand around.  Deviating from the process weakens or changes the brand.

A Different Sales Style

If you are committed to the marriage of design and build as one process, typically the greatest challenge or change will be a new or different sales approach. Convincing the client to select your company, give up the three bid option, and pay for a design and plans they will not necessarily get to keep unless they go forward with your company, requires a mind set and sales skills most salespeople do not possess.  If you wouldn’t consider or commit to a Design/Build process for renovations at your home, you will probably have a hard time selling the concept to others.  Selling it requires believing in it.

Keep in mind that as a consideration for success within this definition of Design/Build, the process is for those clients who can make decisions and will stick to them.  They can’t change their minds during the process and seek bids using the Design/Builder’s plans.  Clarifying and sticking to this is the responsibility of the salesperson and should be clearly explain during the initial sales call as well as in your Design/Build Agreement.

Don’t get mad at me

The process described above is not for every contractor and it’s not for every client.  I am not suggesting using any other process is wrong; not at all.   It’s still a free country and you can do business any way you want, as long as you operate legally.  I am saying that if you separate the two processes don’t tell consumers that you are a “Design/Build Business”.  Maybe yours is a remodeling business that offers both design/build and the traditional design/bid process. That is a good business model, too.  Explain the difference and give your prospects the option to choose one or the other.

Want more on this topic?

Check out Shawn's article Titled "Who Owns The Plans?"

Check out this previous blog post regarding standardizing the definition of Design/Build