Lots of remodelers rely on in-house labor, while others prefer to use trade partners. At Normandy Remodeling, we are in the second category. We’ve found that it's a better way to control costs compared to in-house labor. But you also need to cultivate and prioritize those relationships.
Strong Relationships Start with Strong Partners
Our trade partners are loyal, and our relationships with them are strong. If you’re going to allow trade partners to have so much freedom, you have to nurture the relationship and understand it. The hardest thing for companies that switch from in-house to partners is establishing trust and giving up control.
We have grown about 30% since I entered this position in 2014 and had to increase our trade partner pool quite a bit. I began a referral program where we pay $500 to trade partners if they refer another trade partner who comes to work with us.
The best place to find new people is through people you already work with.
The best place to find new people is through people you already work with. They’re not going to jeopardize our relationship by giving us somebody who isn't a strong candidate.
If someone calls asking to be placed on our bid list, we get into a lot of due diligence with a lot of vetting, visiting jobs, and checking references. Unless we do a very good job of vetting or they know somebody, they never get to work for us. This is why the referral program is the best option.
The biggest thing I do for trade partner relationships is communicate constantly. I have an open line of communication with every trade.
Once a month, I send out an update to every trade partner. It begins with, “Dear valued trade partner,” and provides insight into Normandy: How much we sold this month, our backlog, and that we’re going to be busy. I remind them in these communications also about the referral program.
A lot of builders will do 30, 60, and 90-day payouts. We write checks two to three times a week
It gives them a status so they feel secure knowing that we have a lot of work for them. The worst thing, in my opinion, is to keep them on the outside and only act as, just do the work, don’t worry about what we’re doing. We go out of our way to ensure they feel like part of the Normandy family. Normandy currently has 75 employees, not including trade partners, and a revenue of $36 million.
Then paying fairly and promptly is another thing. By controlling our costs more by using trade partners, we’re able to pay a really good rate and can pass the profit along.
A lot of builders will do 30, 60, and 90-day payouts. We write checks two to three times a week, so they get paid all the time. As a small company, waiting 90 days makes them put out all kinds of money. That keeps them engaged with us.
Trade Appreciation Events
We have done trade appreciation parties for six years, and it started as something we wanted to do because our partners are the face of the company. They see more of our customers than an average employee. We want to say thank you and that we appreciate the work you do.
We invite trade partners and their spouses, showcase completed projects, and display who worked on them, so it's an opportunity for these folks to stand there with their significant other and say, “Look, I built that. That’s one of my projects.” It gives them a chance to brag a little and show their spouses the work they likely go home and tell them about each day.
We also leverage our buying power with vendor partners and get them to sponsor and provide prizes to hand out, such as sports tickets, suite tickets, tools, and TVs.
At first, we thought, well, we have five different plumbers. Will they get together and ask how much work each one is getting? But they don’t. It’s just about having a good time. They even ask and look forward to the event each year.