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News Release:
Strong Foundation Points to
Gains for Remodeling in Coming Decade
Harvard Releases
Improving America'so Housing 2007
(Orlando, FL)
Spending on home improvements by homeowners is expected to
increase at a 3.7 percent inflation-adjusted compound annual
rate over the next decade according to a new report released
by the Remodeling Futures Program of the Joint Center for
Housing Studies. After strong growth earlier this decade where
low financing costs and strong returns to house values
encouraged upper-end remodeling projects, spending reached
$280 billion in 2005. Recently, the remodeling industry has
softened. "The 2006 slowdown in the broader housing sector was
reflected in the remodeling industry, with many homeowners
putting their improvement activity on hold until the market
stabilizes" explains Nicolas P. Retsinas, director of the
Joint Center. Retsinas adds, "When the industry emerges
from its current slowdown, investments in older homes that
missed the last round of home improvements, the desire for
energy efficiency retrofits, and growing pressure to upgrade
the rental stock will ensure a healthy recovery."
Foundations for Future Growth in the Remodeling
Industry, the most recent report in the Improving Americas
Housing series, also addresses changes in the structure of the
remodeling industry. Despite recent industry concentration,
remodeling firms remain very fragmented, as self-employed
contractors not only account for a majority of businesses in
the industry, but also for most of the recent growth. In lieu
of consolidation, many remodeling contractors have become more
specialized. Among the larger companies, specialization has
led not only to stronger revenues, but also to more stable
receipts. By specializing, remodeling firms can achieve
efficiencies even if their revenues do not reach the levels of
traditional scale economies, notes Kermit Baker, director of
the Remodeling Future Program.
The recent slowdown in
home sales means owners are staying in their homes longer.
This will change the composition of home improvement spending.
Recent buyers often focus on updating their kitchens and
baths as well as adding rooms or making structural changes,
remarks Amal Bendimerad, a research analyst at the Joint
Center. Given that their use of space is already well
established, longer-term owners make different spending
options, choosing to maintain the condition of their homes.
Also, the age of the nations housing is increasing. With
two-thirds of homes now at least a quarter century old,
growing numbers are in age ranges where improvement spending
traditionally is high. Rising home energy costs also are
causing homeowners to put energy efficiency near the top of
their remodeling concerns. Finally, given the push for
homeownership in recent years, rentals have seen declining
levels of investment. Growing demand for upper-end apartments
has already encouraged more spending on these
units.
Increases in the numbers of households and in
per household expenditures on home improvements, especially as
the high-end market segment returns, ensures solid growth in
remodeling activity over the coming decade. However, the mix
of remodeling demands will be reshaped by immigrants, seniors,
and non-family households, thereby producing a more balanced
and sustainable pace of growth. Homeowner spending on
remodeling projects is projected to increase 44 percent
between 2005 and 2015. The professional remodeler portion
of the home improvement market is expected to grow 46 percent,
or 3.8 percent per year in inflation adjusted dollars between
2005 and 2015, notes William Apgar, senior scholar at the
Joint Center. At the same time, D-I-Y spending should grow a
respectable 3.2 annually and increase almost 38
percent.
The Remodeling Futures Program, launched in
1995, is producing a better understanding of the US home
improvement industry so that businesses can better take
advantage of the opportunities that this market offers. A
collaborative undertaking among university researchers,
government officials, industry analysts, and industry
associations, the program seeks to answer questions of how
remodeling fits into the residential construction industry
including demographic trends, housing and tenure
characteristics, regional characteristics of remodelers and
remodeling contractors, and the evolving structure of the
building materials industry. The Remodeling Futures Program is
a research program within the Joint Center for Housing Studies
at Harvard University.
Pleasure
in the job puts perfection in the work.
-
Aristotle
Copyright
2007
Chris Joy Marketing Communications.
All
rights reserved. You may reproduce content included in the
Brand Guardian e-newsletter by including this copyright and,
if reproducing it electronically, by including a link to www.chrisjoycomm.com.
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Hello,
Today's newsletter
reflects on how the strength of your unique brand is like a
good joke -- so much of its success depends on the delivery.
I hope you find this helpful. Follow this link to
let me know what you think.
All the best,
Chris Joy
Principal
Chris Joy
Marketing Communications
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Share this newsletter with a friend
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It's All
in the Delivery
I’ve been a big fan of the
Seinfeld show since the early 90’s. In my book,
comedians Jerry Seinfeld and Larry David raise the analysis of
human peccadilloes and social interaction to an art form.
My husband indulges me in my love of this team. He
could by now probably join me in reciting every line of “The
Marine Biologist” or “The Puffy Shirt.” I know most episodes
by heart -- and still love every minute.
A few years
ago when Larry David created Curb Your Enthusiasm a lot
of people suggested I would love the show. And alas, I do
–it’s basically Seinfeld’s George Costanza as
interpreted by Jason Alexander from Season 3 on. Same
humor. Same personality. Different delivery.
Here’s
what I find interesting. My husband, Jim, a huge fan of
Seinfeld, hates Curb Your Enthusiasm. Larry
David’s character (reportedly based entirely on his own
personality) served as the persona for both George Costanza on
Seinfeld and his own role in Curb Your
Enthusiasm, and yet Jim loves one and hates the other. How
can that be?
My point here, and I do have one, is that
it’s all in the delivery.
Recently, I was at a meeting
hosted by BAGB’s Remodelers Council and the topic for the
evening’s discussion was top concerns among remodelers. As the
evening unfolded and several dozen attendees chimed in, it
occurred to me that many of them actually believed that all
their businesses were completely homogenous. That, among
similarly skilled builders, their end deliverable to clients
was exactly the same.
As a branding professional, this
was killing me. Of course they’re not all the same, because
the end product – the sunroom, the new kitchen, the staircase
restoration-- is only part of the deliverable. Two
companies could in fact, build an absolutely identical house
with the exact same products, quality of construction and
production schedule, and their clients could have widely
different experiences in getting there.
Because the
other part of the deliverable is the delivery.
You
provide a service that no one else can replicate. The way
you deliver that service is as unique as your DNA. And
that makes a lot of difference. It’s why you may work well
with scientists and not ad executives. It’s why your team
should be so much more valuable than the sum of your
employees. It’s why you should pay attention to that “gut
feeling” about whether to take on that potential client you
met last week.
It’s how you do things, and why some
clients are so much happier than others with your performance.
So what does this mean for your marketing
strategy? It means you need to do some soul searching to
figure out if you’re a George Costanza or a Larry David (God
willing, neither, but you get my point). And which clients fit
the mold of your Jerry or Jeff? Who are you most likely to
get along with, and thus serve well? Figure that out, and
- yada yada yada - you’ll be laughing all the way to the
bank.
Are you a fellow fan of either show? Which one
is better in your opinion? |
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Follow this link to vote or
comment. |
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Brand Champion of the Month
"One
Strong Opinion"
A few years ago, I worked with
David L. Carpenter, Inc. of Dedham, MA in pursuit of
media coverage for the firm and its work. Two weeks ago,
David emailed me to let me know that he had just landed a
$150,000 job based solely on a newspaper article we had worked
on together more than two years ago.
The article
was a very brief commentary in the Boston Globe’s now defunct
“Life at Home” section. I loved that section and was sorry to
see it go when the Globe revamped its layout and did away with
the Thursday section.
Anyway, David’s company does a
lot of restoration and renovation work on older homes in New
England. So as the weather turned colder in October of 2004,
we pitched a contrarian view to the “Life at Home” editor
Michael Prager on window restoration.
"They just don't
make 'em like they used to' when it comes to the beauty and
quality of old windows,” said David.
He went
on to make the argument that in an effort to save on
ever-increasing heating bills, many homeowners of beautiful
70+ year old homes, think that they should replace old
double-hung weighted windows with cost-effective replacement
windows, regardless of the aesthetic effect on their home.
Most people consider this a matter of simple economics. As
David sees it, though, today's replacement windows will never
last the 100 years that these old windows have, and therefore
it pays to really "do the math" when considering compromising
the home's unique architectural legacy in order to save on
heating bills. Adding a good storm window and/or having a
trained professional restore the old windows can eliminate
drafts and improve heat retention enormously. He summed, “You
can't beat the original and with care and restoration, this
solution can be both smart and beautiful.”
The week the
piece ran, David received 41 calls from new prospects for
window work—all based on this one article. And one call from
an angry replacement window vendor. He conservatively
estimates that he has since received another 30+ calls from
additional prospects since then – all from the one article.
David used this opportunity to its full
potential. He talked about something he is an expert in,
and an area of his business he would like to see grow. He
offered a timely, useful solution to a common problem. And
most of all, he was not afraid to make a statement that would
appeal to some, and not others. Every publicity
opportunity is a chance to say something meaningful and
memorable. Being wishy-washy in interviews will fail to leave
any lasting impression. Better to prepare the points you want
to get across for any interview and state them clearly and
boldly when the opportunity presents itself. Your message
won’t resonate with everyone – this window replacement rep is
a good example, but it will be remembered by those you are
naturally well aligned to do business with. Good job, David!
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Competition at the High End
The
following excerpts from the recent report, "Foundations
for Future Growth in the Remodeling Industry released by
Harvard’s Joint Center of Housing Studies offer powerful
suggestions to all of those who serve the high end of the
housing market. I believe this applies not just to remodelers
but most professionals who offer discretionary home services:
A relatively small number of high-income
homeowners accounts for a large share of remodeling
activity.
Fact:
The top five percent of
households spending the most for home improvements accounted
for 60.7 percent of all marketing expenditures in
2004-2005.
At the same time, the number of small
firms serving the remodeling market is growing.
Fact:
In 2002, the number of both payroll and
nonpayroll businesses specializing in home improvement had
reached 530,000 up from 400,000 just five years
earlier.
What does this mean to your marketing
strategy? For those who have always served the high end of the
residential market, take heart. You have earned your right
place in the market, but do not be fooled into thinking that
means it will go unchallenged. As the middle-market
remains unsteady, it is wise to expect that more and more
middle-market firms will aggressively try to scratch their way
into the high end. That means now is the time to
aggressively defend your position to fend off would be
competitors. More on this next month.
What conclusions did you draw from the study?
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Follow this link to weigh
in. |
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Quick Tip
Happy
Holidays
Two weeks ago I received a holiday card.
Hmmm. Should someone alarm Emily Post? No, it wasn’t a
Christmas or Hanukkah card. It was a Chinese New Year card
wishing me personal and professional prosperity in the new
year. It came from a business consultant whose tagline is
Transforming Vision into Value.
I liked this because
it very much fit the brand of the company from which it was
sent. It was also unexpected – all great marketing is to some
extent unexpected. A lot of companies send holiday cards just
because the calendar turns to December. Not only are these
often lost in the pile of greetings sent between Thanksgiving
and New Years, but often the senders are so busy at that time
that the cards are ordered, signed and mailed out without much
imagination or personality.
If you send holiday cards,
make sure they make an appropriate statement about your brand,
make them personal, and try to make them stand out in some
way. Sending holiday greetings on a holiday other than
Christmas or Hanukkah is one way to potentially make for an
interesting twist if the holiday ties in with your brand.
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