Online and Ready to Buy: the New Sales Landscape
Over time, Marc Leibman and his wife—a professional couple with young children living in the northern New Jersey suburbs—have worked with several remodeling and home improvement companies. They are the kind of homeowners who know what they want and know what they’re entitled to once they’ve contracted for it. In fact, Leibman, an attorney, knows a little bit more than most, having represented homeowners as plaintiffs in lawsuits. Shortly after purchasing their third house, the Leibmans decided it needed new windows, new siding, and a new roof. In the course of their online research, the couple became interested in HardiePlank, the popular fiber-cement siding product. They contacted James Hardie directly and the manufacturer directed them to three area contractors as potential installers.
The Leibmans had no desire to sit through a lengthy home improvement sales presentation. They made that clear to one of the first salespeople, who was a half-hour into his presentation without having measured a single window when Leibman realized “the guy was just trying to schmooze me and my wife and take up all our time.” When the Leibmans informed the sales rep that they were aware of all their window options and that he had 20 more minutes, he replied that he was just getting started and that it would take at least three hours for the couple to be “properly educated” about windows.
Time and Tech
The meeting with K&B Home Remodelers, in Succasunna, N.J., was a different story. K&B president, Horacio Kusnier, was “soft-spoken and up-front” about what the company could and couldn’t do, Marc Leibman recalls. “He gave us some ballpark figures and told us they wanted us to do product selection on the web.” K&B then set up an online meeting at which the Leibmans, looking at visualization screens shared by K&B, were able to select the HardiePlank profile, color, trim, and accessory items that they felt worked best for their house. In fact, it took the couple just a half-hour to pick out not just the siding but a new shingle roof and fiberglass replacement windows as well.
The proposal clinched the deal. “It was exceptionally well-detailed,” Leibman says. “Every piece of material that would be used was listed, with a price, description, and photograph.” The Leibmans signed the contract with K&B Home Remodelers electronically—in their home with no salesman present—using document signature software.
Other K&B clients tell similar stories. Area homeowner and local real estate agent Carolyn Van Leer contacted K&B about a new roof plus windows and doors. The company sent someone to the house to take pictures, using them to construct a 3-D model, and then set up an online video conference. “It was over the top,” Van Leer says. “They showed me what the roof would look like in a different color, and what the windows would look like once installed.” The proposal arrived in less than a week; she and her husband spent about $40,000 on the project.
The New Buyer
Could this kind of online experience possibly be the future for home improvement sales? One reason it may be is the changing nature of today’s buyers. Although Millennials (18 to 37 year olds) are entering the housing market at a much slower rate than previous generations, demographers say that their buying habits have spread to prior generations.
Like Millennials, Baby Boomers and Gen Xers increasingly want to buy stuff online, and big-ticket items are not off the table. Take automobiles, for example. A 2015 poll by digital marketing company Accenture of 10,000 people in eight major countries, including the U.S., found that:
• 80 percent research their auto purchase online;
• 62 percent initiate the buying process online before entering a dealership; and
• 75 percent would consider conducting the entire sales process online, including financing, price negotiation, back-office paperwork, and delivery.
Commenting on the survey, Money magazine noted: “For many, buying a car at a dealership is too much of a confusing, high-pressure, unreasonably long process. It’s easy to see how it’s preferable to haggle over prices and options and review the fine print at one’s leisure in front of a screen rather than surrounded by salespeople and their ‘let me talk to the manager’ games.”
Is Home Improvement Next?
Many people feel the same about buying roofing, siding, replacement windows, and other home improvements as they do about buying a car—except instead of taking place on a car dealership lot where they can walk away, it’s happening in their living room, where they can’t.
“That
[in-home sales]
model dates
back to the ’50s,
and people no
longer want to
buy that way.”– Mike Damora
But the balance of power has shifted. Home improvement websites allow buyers to quickly compile information about products and their manufacturers, which is how Carolyn Van Leer and the Leibmans came to K&B Home Remodelers. And online review sites enable consumers to quickly sift through options and select a contractor with which they’re comfortable.
Web-savvy buyers aren’t fans of in-home sales either—another carryover of Millennial buying habits—and often have little time for that process. And with all this information at their disposal, they want to buy the way they want to buy. That means getting a price with transparency about what they’re getting and zero pressure to “buy now.”
Bringing It All Together
Technology is also changing. Contractors today can select from a raft of tech tools that enable them to track leads and sales, measure buildings, produce designs, prepare estimates and proposals, and much more. But up to now, says Doug Vickerson, CEO of RenoWorks, a Canadian-based provider of visualization and design software, all of these functions operated independently of one another. A company may use a CRM system to track leads and sales, but it would estimate jobs and scratch out a proposal using other software or do it the old-fashioned way, with a pencil applied to the blank portion of an envelope.“Getting contractors to adopt technology has been really hard,” Vickerson says. Yet, a handful of tech products have caught on in a big way. For example, EagleView, which turns aerial images of a street address into a 3-D model and detailed roof report, has caught on in a big way among roofers, who now routinely use such reports.
All in One Place
So what if software could collect all of the separate functions essential to home improvement sales into a single application? Among other things, it would boost sales efficiency, reduce rescission, decrease installation errors by preventing scope-of-work disconnects, and it would allow contractors to move from one step in the sales process to the next without having to jump from program to program.
That’s the idea behind Remote Sales Force and its digital product, One Click Contractor, an idea conceived by Kusnier and Mike Damora, K&B’s vice president of sales and marketing and a Pro Remodeler columnist (see “Introducing One Click Contractor,” below).
“I started [selling online] three years ago,” Damora says. “Even a year-and-a-half ago I was using eight or nine different software [applications] … But homeowners were digging it and I was selling. Instead of driving around, I was spending that time preparing. Now prep time is 10 minutes because everything is automated in the software.”
Just-in-Time Arrival
Though other companies are reportedly working on similar ideas for a digital sales system that will ultimately give homeowners the option of conducting the entire home improvement buying process online, Remote Sales Force appears to be the first to market. “We expect copycats,” says software developer Chris Thornberry, who was hired as chief technology officer by the founders of Remote Sales Force to combine various software programs into a sequential system and user interface that would be simple to use. The result, One Click Contractor, is a cloud-based technology optimized for tablets and laptops (and soon for smartphones) that can be made to work for any home improvement company by loading in the company’s pricing, based on its particular profit model. Instead of the smoke-and-mirrors sales tricks consumers have grown wary of, salespeople present numbers based on computer-generated measurements from imagery, and let homeowners build their own project, while sharing a screen with them (see “One Click Contractor, Step By Step”).
Kusnier and Damora got the idea for what eventually became One Click Contractor when they began to notice how their upscale customer base was changing. Many prospects—and not just Millennials—were increasingly resistant to the idea of buying home improvement from and in-home salesperson. “That sales model dates back to the ’50s,” Damora says, “and people no longer want to buy that way. What the homeowner ultimately wants is a price, not a show. And they want to know they’re dealing with a reputable contractor.”
Still a Need for Sales Reps
For the moment, online selling doesn’t eliminate a salesperson; at some point, someone has to ask for the sale. But closing becomes a natural final step when homeowners are certain they have all the data they need. A system such as One Click Contractor, says Dale Thornberry, CEO at Remote Sales Force, simply extends the process of consumer research right up to the proposal level. “It’s a natural extension of online research,” he says. “In the past, the homeowner called the contractor out to the house and did their research face-to-face over the kitchen table. Now the majority who do their research online can also finalize their design and make the purchase online.”
Like the Leibmans, however, many homeowners are spending five figures and still want to see, in person and at least once, someone from the company who will be working on their house. After all, a house is a far more intimate environment than a car dealership. “I would never spend money like this without looking someone in the eye and thoroughly vetting them,” Marc Leibman says. But the risk is proportional to the size of the investment. “If I was looking to spend $2,000 to $3,000,” Leibman notes, “I would take that shot.”
That said, K&B—both the progenitor and the guinea pig for Remote Sales Force—has sold five-figure projects online using either multiple software applications or beta versions of One Click Contractor. Among other things, the online process eliminates the need to have all buying parties physically present, a condition many homeowners now find irksome, and one many have vented about online.
As Damora points out, a short initial meeting to take photos and discuss project goals may well be the only one necessary until the walk-through when the project is over and the check is collected. In fact, Damora has made several online-only sales: the homeowners emailed him photos of their house, he interviewed them over the phone, then presented the design and proposal in an online meeting, and they signed digitally.
Once the site data is captured, the online process takes over. “Say you do your attic inspection and data capture in the morning,” Damora explains. “At 7 p.m. you can text to find out if everyone’s home, then go upstairs, open your computer, and do your selling in a fraction of the time. The proposal’s done for you and you can sit down with the homeowners at an online meeting and, with everybody looking at the same image of the house on the screen, help them decide if they want to add stone, porticos, and fancy trim.”
Evolution Not Revolution
Will online sales catch on? Dale Thornberry, who has worked for both EagleView and Hover, and holds seven patents for roof measuring tools, points out that contractors are slow to adopt most technology. Today, for instance, while about 50 percent of roofers use remote measuring tools, when that product was introduced “the adoption rate was 1 percent per month,” he says. Skeptics said it would never catch on. “I was told when we started, that nobody is ever going to pay 50 bucks for a roof measurement,” he adds.
Thornberry expects to see a similar adoption rate for One Click Contractor. “It’s evolution, not revolution,” he points out. Still, his projection is that in five years’ time, half of all exterior contracting sales—roofing, siding, windows, and doors—will be done “without going to the home.”
Except, that is, to inspect the completed work and collect the check.
Introducing One Click Contractor
Software:
• One Click Contractor
Developer / distributor:
• Remote Sales Force
How is One Click Contractor sold?
• Directly to contractors and via manufacturers.
• Mike Damora: “We are selling this through webinars. We did our first one in December and another one in mid-January.”
• Dale Thornberry: “We will also offer it through manufacturers that have indicated interest in sponsoring contractors on our tool. We will private label it so it’s specific to each manufacturer.”
What will contractors pay for the system and what do they get for the money?
One-time onboarding fee:
• $1,000 to $1,500 (for software and marketing materials, including customized video for websites, social media, and TV advertising)
• Thornberry: “We need a user’s logo, contract terms and conditions, and pricing, which we use to personalize the marketing materials, sales presentation, and price list.”
Monthly subscription:
• $129 per month for the complete package (includes Renoworks, the webinar/meeting tool, and digital signature tool).
• Damora: “It also includes the ability to communicate with a CRM, such as MarketSharp. And we can accept measurements from EagleView, RoofScope, Hover, and others. You can also enter measurements manually, either in the home or online. We take whatever is in your presentation now—your license, insurance, online reviews, before and after photos—and customize it for use with our package.”
Optional add-ons:
• Cost varies
• Thornberry: “If you use third-party tools, we will create a link to those accounts for you. For example, we can create a link to your account at Pictometry or EagleView or Hover. It’s not an integration, it’s a link, but we have them set up and you can turn them on and off if you choose.”
• Damora: “There are transaction fees. For example, for Renoworks to work, a photo of the house has to be digitally masked. That takes 15 to 20 minutes to an hour. You can do it yourself, but it’s boring, painstaking work. For a small fee, say 20 bucks, we’ll mask it for you.”
