Staying Power

Longevity in the remodeling industry starts with loyal customers. “I’ve been doing business in this town for nearly 30 years,” says Tom Reilly, owner of Prescott Renovations, in Prescott, Ariz. “You don’t get to do that in a small town for this long by using people. You need credibility in following through.”

In a rough economy, remodeler Charles Russell says that having a large database of past customers who consider you part of their family helps to ease the hard times. Russell’s company, Westhill Design/Build, in Woodinville, Wash., has a formal timeline for customer contact that starts with project completion and extends out 10 years. The company contacts past clients three times during the first few years, then twice a year from years four through seven, and then annually until year 10. “We fix a sagging door for free, even eight years later. And before we’re done, we have a $10,000 job,” Russell says.

Russell began his company 35 years ago, and from the outset it has had a strong customer focus. “I’ve grown from a one, two, and three-man operation to a high of 50 employees,” he says, “and that [client-focused] philosophy and culture has grown and thrived through all those changes and growth.”

Currently Russell has assigned one of his lead carpenters to be the company’s customer service manager, also making him a member of the firm’s six-person executive management team. “He makes sure [the client] gets the job they want done,” Russell says. “He is the owner advocate. This lets [clients] know we want a customer for life.”

Today’s corporations have lost focus of what business is about, says Mark Williams, president of Remodeling Services Unlimited (RSU), in Murfreesboro, Tenn. Williams believes taking care of customers should be the core of business. He founded RSU more than 25 years ago with the goal of maintaining a high level of quality and customer service — principles that start at the top with him and trickle down through the company. He posts a laminated sheet on each jobsite that reminds field crew of the procedures for setting up lawn signs, communicating with clients, and protecting and cleaning the jobsite. He also rewards employees with bonuses for maintaining quality and service.

But outstanding customer service alone isn’t enough to ensure a company’s longevity. Other factors contribute to long-term survival.

ENGAGED EMPLOYEES

Russell says that his human resources philosophy has always been: Hire for attitude. Skills can be taught.

“Hire the best individual you can find,” he says, “and adjust the job description to fit. Create a job where they can be successful.” But because maintaining this philosophy can prove to be a challenge as a company grows, Russell says it helps to have middle managers employ the same thinking when hiring for their specific departments. The DISC profiling system has helped the company to hire more successfully by selecting employees with personalities that fit their jobs and the company culture.

Dolores Davis is general manager of CG&S Design-Build, which was founded by her parents and has been in business for 52 years in Austin, Texas. She says that when the remodeling company was smaller and younger, employees had a lot more flexibility and freedom. “Now,” she says, “we have more structure and systems.”

But, she points out, the culture still draws and keeps employees long-term. “People can do construction anywhere,” she says. “We hire people to do something they love to do, and they get a personal reward out of it.” Davis is turning to the entire team during this recession and involving everyone in the company. “We’re rallying the wagons around the company to keep it going and to keep that level of interest and urgency.”

CONSERVATIVE FINANCIALS

Williams started his company when he was in college majoring in business administration. He created a business plan as a class assignment. “It forced me to follow the basics of what all business should do,” he says. “I created a mission statement and belief statement that has helped me throughout the years.”

Davis says that for CG&S Design-Build, one of the greatest contributors to the company’s longevity has been its financially conservative approach, which started with the founder, her father, Clarence Guerrero. “He always said, ‘Cash flow is king,’” she says. He did not believe in buying on credit. “We have a line of credit now, but we try not to use it.”

Third-generation remodeler Trent Haston of Andrew Roby Inc., in Charlotte, N.C., says that he and his brother inherited a similar debt-free attitude from their father and grandfather. “They built the business exponentially slower because they did not take on debt.” However, he says, to hire the talented people to take the business to the next level will require an increase in overhead, which he is willing to do.

Russell says that conservative, controlled growth from year to year has helped Westhill Design/Build succeed. “We tried not to get caught up in the euphoria of a boom time and overgrow. Our growth steadily goes up over 35 years. It’s not at a high rate. Some would say that is not fast enough, but you need patience and to let your capital grow with your training and ability,” he says.

This type of growth also helps with work/life balance. “I would have burned out with big growth spurts — with having too much to do or tripling my workforce,” Russell says.

DIVERSIFICATION

Remodelers should review all opportunities in their local market, Reilly advises. “Be creative. Try to look at the big picture to see what is not being done. Find new ways to increase marketshare,” he says. Though his company offers design/build services, it also builds projects designed by architects and designs projects for other contractors.

Reilly recently added weatherization services to help home­owners improve energy efficiency, and he became a Leadership in Energy and Environmental Design (LEED) Accredited Professional to learn about green remodeling.

Davis says that her company offers everything from concept to production under one roof. Over the years, CG&S Design-Build has also added landscape design and installation to its range of services.

Commercial work has helped Williams’ company to survive in down times. However, he says that it’s important to try different markets, even if, ultimately, they are not a good fit. He has tried and rejected structural repair work, gutter installation, in-house electrical work, concrete resurfacing, and insurance restoration.

For Russell, diversification has helped the company ride out market fluctuations. Besides remodeling, he also does home maintenance, aging-in-place upgrades, and commercial work. “This broad scope is absolutely necessary,” he says. But, he cautions, “We took the time to set up each division and we have grown into them.”

BRANDING

For the last 15 years, Russell has consistently spent at least 2% of his revenue on marketing. “We do top-of-mind marketing, and it’s paying back now when times are tough,” he says. That marketing includes radio ads, job signs, vehicle signs, and neighborhood mailers. Russell meets quarterly with his office/marketing manager to review both the company’s marketing spending and feedback from salespeople about what is generating the strongest leads. He points out that although the lead-to-cost ratio for radio ads is high, these ads are an important part of Westhill Design/Build’s constant outreach efforts to boost consumer awareness of the company.

Davis is always looking for ways to connect with CG&S Design-Build’s customer base. “We have spent [money] on this whether it’s been crazy busy or not crazy busy,” she says. “Having that constant flow will be helpful this year as things get difficult. My vision is that the CG&S name will percolate to the top when people are looking for companies — they will look at ours first.”

Reilly keeps in touch with business editors at local newspapers and calls in to local home improvement radio shows. “Embrace the media,” he says. “For the radio show, I’ve told them they can keep me on standby — give me 24 hours notice and I will be there.” They have called on him as an expert three times during the past four months.

All the remodelers we spoke with for this article agree that, for them, though the company’s longevity is not at the top of the list of factors that clients consider when selecting a remodeler, it is definitely an added bonus.

NETWORKING

Similar to branding, networking occurs more or less automatically when a company has been in business in one community for a long time. Reilly has been a member of his area’s planning commission, and is currently a volunteer member on an affordable housing committee, as well as belonging to the local Rotary International club. “Talking to key business leaders helps you get the big picture,” he says. “They can be your unofficial board of directors.”

Russell joined a peer review group and considers it one of the best business decisions he has ever made. “In my first few years in business, I felt like the Lone Ranger,” he says. Since joining the peer group, he finds that “learning from remodelers with the same set of problems and seeing how they handle things is invaluable. You can learn from their mistakes, too.” Education and training, he adds, are also a big part of his industry involvement.

Russell, too, belongs to a local Rotary club, as well as the Chamber of Commerce, and he participates in charity auctions by donating handyman services.

Williams has built relationships with key engineers and code officials. “We know what they want and expect, and we deliver it,” he says, noting that this also helps customers. “When we see referrals from code officials, we know we’re doing something right.”