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Jonathan Sweet - Remodeling Notes


Jay Sweet
As senior editor of Professional Remodeler, a lot of information crosses my desk. This blog will be a chance to share some of that with you, with an immediacy not possible with a monthly magazine. It's also your chance to tell me what you think about what I have to say. Whether you agree or disagree, I hope you won't be shy.

Wednesday, January 16, 2008

"I don't have to market"

Jan 16 2008 9:10AM | Permalink | Email this | Comments (2) |
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This is something I hear from a lot of remodelers, something they state as a point of pride. They say they get so many jobs from repeats and referrals, they don't have to chase down any new business.

That's ... how to put this ... stupid. First of all, you're probably already marketing without realizing it. By keeping in touch with past clients, by soliciting leads, you're marketing. Several years ago when I worked for another magazine in the industry, Mike Carden, president of MUI Corporation and a former NAHB Remodelors Council chair, wrote a great column about this very topic. His point was that you market all day long without ever realizing it.

But beyond that passive marketing, active marketing is essential if you ever want to grow your business. In the current climate, it might be necessary just to tread water.

I've recently talked to three of the most successful remodelers in the country about this very subject:

Tom Kelly, president of the Neil Kelly Company, told me during a recent discussion about his father (company founder Neil Kelly) that Neil was a big believer in marketing from day one and that commitment over the last 60 years is a big part of why Neil Kelly is what it is today.

Mark Richardson, president of Case Design/Remodeling, probably the largest remodeling operation in the country, told me that the company's growth is due in large part to Fred Case's belief that you market constantly and increase that budget when times are tough. Case has found that philosophy positions the company to grab bigger pieces of market share when the market recovers.

Finally, Gary Marrokal, president of Marrokal Construction, says it was a recognition that marketing was important that launched his company 27 years ago. In 1981, he borrowed $3,000. After spending $350 on liability insurance, $350 on workers comp and putting $300 in a checking account, he took the rest and spent $2,000 on advertising. Even now, he increased his marketing budget by 100 percent two years ago in anticipation of the current slowdown. That decision has allowed him to see a nearly 20 percent growth in installed volume to $18 million this year while many in his market struggle.

Reader Comments


at 1/17/2008 9:31:04 AM, Rick Pratt said:
I agree completely, though I would like to add that a company must market “beyond” their referral base if they want to grow and become more profitable. A few years before I sold my company Classic Homeworks I had the intention of doubling its size first. For years I had been able the “cherry pick” the best jobs that came to us through our referral network. But when I began working on the business plan it became very evident that marketing beyond our referral network would be the key. It’s important to note that the total amount of work that can be obtained solely from referrals can diminish over time. How does this happen? Most people don’t acquire more than a few new friends and acquaintances or family members over the years. If most of our clients come from this same group of referrals then the total number of possible referrals can be limited over time, just as our past clients total number of friends and acquaintances might be limited. The overall quality of the work available can also be reduced over time as these people satisfy their remodeling needs. Sure people move and make new friends and new opportunities to present themselves. But does this happen as often as your company needs more work? As a result, contractors often loose the ability to define the work they would like, typically having to accept what ever work their referral base sends their way. Only with active marketing outside your referral network can you change your companies image and begin the process of acquiring the jobs your really want. Over the course of three years we tripled the average job size, doubled our revenue and increased our gross profit percentage by almost 2 points… all on the back of our new and expanded marketing. In time we began to appreciate and take pride in the fact that the percentage of jobs we acquired by referrals was dropping every year. If you want to know more, I can be reached at Rick@BridgemanEndeavors.com or 303-887-3717.

at 1/17/2008 11:11:33 AM, Jonathan Sweet said:
Thanks for your comment, Rick - that was exactly the point I was trying to make. Repeats and referrals can only get you so far.

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