No ethical business owner would applaud the alleged efforts of the St. Louis Cardinals to hack into the private networks of the Houston Astros and steal information on its key players. But, by the same token, no sane business owner would ignore the competition without trying to find out everything he could—legally.
The fact is, no business—whether it’s roofing, bathroom and kitchen remodeling, window and door replacements, or a company that builds outdoor living spaces—exists in a vacuum. Knowing who else is out there is standard practice in all market research. Competitors can be a great source of learning: they can offer new ideas to adapt to your own business, as well as bad practices to avoid. The more you learn about your rivals, the better prepared you are to construct a winning strategy.
The Internet has greatly simplified the most basic market research. To gain an advantage over your competitors, start with a Google search within a five-mile radius of your business—that’s your critical market—by typing in keywords. Manta.com and HomeAdvisor are other useful sites to find specific contractors in your area. Make a list or, as a handy reference, take a screen shot.
Then visit each relevant website. That’s usually the first stop for most prospective clients, who are doing considerable research themselves. A consumer’s eye view of the business will help you shape and refine your own model, as well. Not every website can be up to the quality, variety and range of Houzz.com. Still, check out how well each of your rival’s sites:
Be on the lookout for red flags: outrageous claims, offers too good to be true, or testimonials with a false ring. Pay attention to the visual presentation, such as whether the graphics seem dated or inappropriate. All of these observations can help sharpen your competitive edge.
Investigate the reputation of your competitors. Start with the Better Business Bureau, a bulletin board of consumer complaints against a particular company—and how the company responded, if at all. Consult Ripoff Report, ConsumerReports.org, and Yelp. Are your rivals showing up on Angie’s List? If not, look further. What kind of box scores are your competitors racking up? If it’s less than four or five stars, you’ve got an opening for your services.
Don’t neglect proven ways to do your homework offline. Every year there are local, regional and national home improvement trade shows sponsored by home improvement production companies, and groups like NARI (National Association of the Remodeling Industry) and Improve It 360. You can learn a lot about competitors and the way they do business by attending a show and listening to a presentation by one of their sales, product or general managers. If one of your rivals has an exhibit booth at a show, you can ask a friend or relative to approach the rep and walk through the stages of a project, posing questions about price, line item costs, guarantees and so forth.
Many contractors glean useful information about their competition by joining NARI, the NAHB’s Remodelers Council or other organizations, and attending chapter meetings. And, of course, you should talk to your clients about their experiences dealing with the salespeople of rival companies, taking notes about what you can learn from others’ shortcomings or strengths to improve your own model.
Business intelligence doesn’t stop at learning about your competitors. Turn the same focused inquiry on your company. Are you holding your own business up to the same critical standards of performance and customer service?
Your website could probably stand some improvements. Does it, for example:
Consider displaying testimonials from satisfied clients. A rating system (1-5 stars) has become a standard feature that allows company-to-company comparisons. Some contractors also post their Net Promoter Score, a measure of how likely a client is to recommend you to someone else.
How does your Better Business Bureau report look? Is your company on Ripoff Report, ConsumerReports.org, and Yelp? Are you on Angie’s List? If not, look further. What kind of box scores are you receiving? If it’s less than four or five stars, you’ve got an opportunity for improvement.
That’s your public face.
Internally, you can keep track of leads, prospects, sales calls, follow-ups, estimates and progress reports by installing a robust customer management system (CRM). While salesforce.com is the gold standard, less expensive but effective CRM systems can be used from Improve It 360, MarketSharp, and RenexPro. Additionally, these will help you keep on top of deals that didn’t close—and why. Everyone from the sales rep to top-line management should have access to the system.
The data you collect from your CRM system, as well as from your website and competition, should be the subject of your regular sales meetings. Having this information on hand will help you get a handle on what you’re doing well and what needs to be fixed.
The good news you can showcase on your site in client testimonials and case studies. The bad news cries out for further investigation. What have you discovered during your information gathering? Look for patterns in deals that are lacking. Can they be corrected by changes in pricing? Switching neighborhoods? Replacing a sales rep? Rethinking your marketing strategy and where you place your dollars (using Google+ or CitySearch versus Yelp)?
Business intelligence should be an ongoing effort to fine-tune your strategy. Some of those efforts are systematic, as outlined above. Some are serendipitous. Staying up-to-date on new ideas and approaches is key. Think of the kitchen contractor in Philadelphia who decided to overlay weather data on sales data. Why? He noticed a lot more calls coming in a day or two after major storms. Digging further, he discovered that during those times of inclement weather, more men were caught at home. Their wives gave them lists of jobs around the house that needed to be worked on—and they obliged by picking up the phone and calling contractors.
FDIC insured EnerBank USA is a highly specialized, national consumer lender that helps strategic business partners and independent home improvement contractors increase sales. Strategic business partners include manufacturers, distributors, franchisors, member or trade associations, and major retailers of home improvement, remodeling, and energy saving products and services. They all rely on the bank to be here today AND tomorrow to fund customer loans and help them achieve their business goals and objectives. EnerBank is the bank of choice, we are reliable, professional, and we produce results.