There are three questions I consistently hear from remodelers of all shapes and sizes: “Mark, what are you seeing out there?” “What are others doing?” And for those who really want to improve, “How do we measure up?” While there’s depth to each question, below are some high-level ideas.
What Am I Seeing Out There?
Overall things are fine—a little inconsistent, but the fundamentals are fine. Higher interest rates are a double-edged sword. Most homeowners with a 3% mortgage would rather keep it than move, and Covid made people value their homes more than ever. The supply of new homes is below demand, making houses appreciate and continue to be a good place to plant funds.
The average project size for most remodelers has remained the same or increased a little, which is a good leading indicator.
I do believe that your success and failure today is up to you. It is a choice.
Leads are down for some and there is more mystery in what marketing strategies work today versus the past. While labor remains an active focus, the challenge of hiring talent has eased a bit.
What are others doing?
The best of the best put more energy and time into these three things:
1. Client Acquisition: There’s more money, creativity, and time focused on marketing. Leads are the fuel that creates clients, projects, and revenue.
In a less wonky time, this might be 5 to 10% of a leader’s energy. Today, it must be 10 to 20% of a leader’s energy. For the best marketing, lead generation has become a team sport, not just an expense. This is a top priority.
2. Sales Training and Leadership: The selling environment has changed. While 90% of the sales techniques and skills are the same, there are nuances today (controlling the client, creating urgency, handling escalating costs, and deeper client relationships) that need to be mastered. The best of the best double down on sales training and simulations.
Leveraging technology to monitor sales behavior is a priority. Sales data is more important than ever to get one more lead to turn into a sale.
3. Operational Excellence: If you don’t have your act together, it is hard to focus on tweaking and improving.
It’s critical to ensure the right people, processes, and accountabilities are in place. Most of the best also really appreciate the collaboration of a face-to-face office but balance high tech and high touch. Leaders who are always looking to improve things, even just by a little, make a big difference.
How Do We Measure Up?
While there are many variables to this question, a few common denominators are: About 20 to 30% of the remodeling businesses I know are doing very well (ahead of 2024 targets). About 10 to 20% struggle (at least 20% below targets). And about 50 to 60% are fine (hitting roughly where they wanted to be).
One common denominator between those who struggle and do well is that the struggling companies blame the economy, price escalation, and labor market. The ones that are in the top tier see those issues but respond by tweaking strategies, investing in their teams, and, overall, working harder.
I don’t have a crystal ball, but I do believe that your success and failure today is up to you. It is a choice.
You can choose to watch it happen and be on the sidelines, not getting dirty on the field. Or, make it happen, rally the team, get clarity on priorities, sharpen your axe with training, and realize that what you do is important, but it is hard work.
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