Are exterior replacement companies real remodelers, or are they just sales and marketing organizations hustling quick replacement jobs?

The answer is that they’re both—marketing machines retailing short-cycle construction projects—and all the more successful for doing so.

A quick glance at the replacement companies on the Remodeling 550 list in the August issue of REMODELING shows many of the same players that were there in 2009 when REMODELING first published the list. The difference in most cases is that the companies' sales have grown, in some cases more than doubling.

Dave Yoho, president of the oldest, largest consulting firm for home improvement companies, says the reason is that such companies engage in “make” marketing versus the “take” marketing of other types of contractors who wait for word of mouth or advertising to make the phone ring. “Make marketers” seek out prospects via methods such as canvassing and shows and events. That aggressive marketing, Yoho says, will continue to define this type of contractor. Other trends experts see are:

An intensified search for new products. Ten years ago, window and siding companies jumped into gutter protection and sunrooms. In recent years, many of the same companies offered bath liners to offset lackluster window and siding sales. Currently, Yoho points out, a number of home improvement companies are moving into metal roofing as an opportunity to leverage marketing capabilities, differentiate from competitors, and generate a good margin.

A shift in the customer demographic. Traditionally, baby boomers—those aged 50 and over—were the demographic of choice for this type of contracting company, says home improvement consultant and REPLACEMENT CONTRACTOR columnist Mike Damora. “Now we’re typically seeing a much younger buyer,” he says. That buyer is more informed and less willing to tolerate traditional sales gambits such as price drops. “If you think you’re going to run the old shell game by this guy, you’re going to be handed your hat a lot,” Damora says.

A need for more people. And not just more people, but the right ones. “Currently, one of our larger members is having huge HR issues,” says Scott Siegel, president of Certified Contractors Network, a peer consulting organization of mostly exterior contractors. “Companies want to grow, but they can’t find the right people,” he says. “Even the most successful companies are struggling with this.” That’s not only employees but subcontractors. Demand for their services from new-home builders is intensifying. Siegal’s suggestion: “Focus on basics.” What works every time, he says, is “putting a financial plan together, hiring the right people, and selling at the right price.” With the right price, you have the money to hire the right people.