In any business and in any industry, you really need to know who your competition is and what it is that makes them competitive. Knowing your competition allows you to deliver the right message and ensures that you have the right team and skill set needed to compete. Knowing your competition positions you not only for today but for the future.

When I ask a group of remodelers who their competition is, I generally get answers that list the names of specific remodelers, designers, or builders in their community. I usually ask a follow-up question about how many specific prospects they think they have lost to these companies; typically, the response is that less than 10% of the leads that do not pan out go to competitors. Finally, I ask if they know what their market share is in their area. Most remodelers don’t know, but they guess that it is a double-digit number.

Unfortunately, those numbers don’t add up. Remodeling is almost a $300 billion industry, and most of that work is done in one of 360-plus metropolitan areas (Metropolitan Statistical Areas, or MSAs, as defined by the Census). That’s an average of about $800 million each, so the smallest double-digit share, 10%, would be an $80 million company, and there aren’t too many of those around.

My point is simple: When you have an immeasurably small market share and you rarely lose a project to a competing remodeler in your area, it might be that you are looking for your competition in the wrong place.

Here are what I think are your two main competitors.

New-home builders. Since new residential construction has tanked and there are few signs of its recovery in the near future, new-home builders have turned to small remodeling projects, such as handyman or decks and porches. They also compete on some of the larger additions which, although rare these days, are most like building a new home (or at least the builders think so). These companies are not as focused on kitchen or bath remodeling because these projects require buying relationships and client-related skill sets that they don’t have. Still, builders are competitive because their new-home mindset keeps their prices low. Generally, however, the client experience is not very positive (except in the pocketbook) and often expectations are not met.

Client fear and a sense of being overwhelmed. A second (and bigger) competitor is your client. They read the same newspapers and watch the same news stations that you do, so they hear the same gloomy news about the economy and unemployment. And because their home, which for most is their biggest asset, is not appreciating the way it did in years past, they are unable to act even as their homes are crying for help and attention. And when they do think about starting a project, their fear of making the wrong choices is exacerbated by the sheer number of options to choose from. Sales cycles are much longer today primarily because of client indecision, not remodeler efficiency.

Competition may come from other places, such as other priorities in your clients’ lives (work, kids, other ways to spend money), or challenges with financing, but your fellow remodeling professional is far down on the list.

So what happens next? The first step is to shift your paradigm of who and what your competition is. Once you do that, you can begin to change your messaging to the client. Today more than ever you need to help your prospects buy, not just sell them. Your job as a remodeler is to reduce stress and keep your client’s house from dying. That involves helping with financial planning and simplifying decisions rather than creating more complexity. It means educating them and serving as a therapist. And it means becoming a long-term friend both to them and to their home.

These roles require new approaches in your advertising, your skill sets, and your sales processes. Your team’s focus can no longer be just on the sticks and bricks. Once you see clearly what you are competing against, you will more easily find ways to turn the challenges of this economy into opportunities.

Mark Robert Halper Photography

—Mark Richardson is co-chairman of The Case Institute of Remodeling, which provides business educational tools and events for the remodeling industry.; 301.229.4600.