Home Improvement

Part
01
of seven
Part
01

Catering to Home Improvement Contractors

There is limited information on case studies, success metrics, or examples illustrating how home improvement products companies are strengthening their relationship with contractors. Moen promotes its relationship with contractors using the "Buy it for the Big Game" promotion. Moen also offers something for every home improvement professional using its products such as Moen 101 Training and a margin calculator meant to maximize profit margins for contractors.

Moen

What the Company Is Doing

  • Moen is offering "something for every professional" through Moen 101 training, a sell-sheet creator, a literature center, and a margin calculator.
  • Moen also offers a rewards program known as the "Buy it for the Big Game" promotion. The loyalty program (contractor rewards) of Moen has been n existence since 2016.

How They Are Doing It

  • To make contractors have a stronger relationship with its products, Moen offers training to contractors. The training listed on its website and titled Moen 101 contains content arranged in a series of modules and sorted by product category. The training covers innovations relevant to bathroom and kitchen improvement, among other categories of home improvement sections.
  • Moen also offers training to contractors on cartridges, valves, accessories, and bath safety. Training covers the installation of home finishing and upgrades.
  • Moen is promoting its relationship with contractors using the "Buy it for the Big Game" promotion.
  • Moen introduced a contractor rewards loyalty program way back in 2016. The program is a free program that gives enrollees (contractors) points when they purchase specific Moen products. Members are allowed to combine points earned from other participating manufacturers to points earned with Moen to win prizes via a rewards program that is managed by BI Worldwide.

Available Metrics of Success

  • There is limited information open to the public on success metrics relative to case studies or examples illustrating how home improvement products companies are strengthening their relationship with contractors.
  • Moen successfully announced the winner of its Contractor Rewards' program known as "Buy it for the Big Game" promotion as Leevon DeCourley, in 2018. The winning prize covered two tickets and included a three-night trip to a Super Bowl LII event in February 2018 at Minneapolis.


Sherwin Williams

  • Sherwin Williams offers water and wastewater impact award winners for its contractors. This award is for contractors that are using some reliable products that Sherwin Williams offers, such as Sherwin-Williams Fluorokem HS (an ultra-durable, ambient-cured, high-solids fluoropolymer urethane finish).

How They Are Doing It

  • Sherwin Williams offers an Impact Award meant to honor contractors working on demanding water and wastewater projects. The award also recognizes those professionals that are committed to protecting assets to enhance public safety in a manner that extends the lives of assets and reduces downtime to guarantee safe, reliable service.
  • Sherwin Williams believes that without dedicated engineers, contractors, and asset owners that are focused on protecting assets, homes within various communities could be hit adversely with an unreliable water service as well as significant worries. Some water treatment systems originate from (and include plumbing and connections) individual homes.
  • Sherwin Williams award honors extraordinary projects that utilize its coating as well as lining materials (those produced by Sherwin-Williams Protective & Marine).
  • Several award submissions get reviewed for selection to earn Sherwin Williams' wastewater impact award. Submissions that get considered include standout projects covering wastewater treatment plants, water towers, among other projects that have shown excellence in utilizing high-performance protective coatings to protect against corrosion and extend the lives of assets. Winners (contractors) get selected for the award from the United States.
  • Sherwin-Williams utilizes its Water & Wastewater Impact Award program to identify and to associate (promote itself) with contractors (such as United Coatings & Linings, UCL) installing some of its reliable products. Apart from tank coating, United Coatings UCL has a certification from Energy Star also offers home finishing/improvement installation services related to homes and roofs within the United States.

Available Metrics of Success

  • There is limited information open to the public on the success metric of Sherwin Williams water and wastewater impact award to contractors.
  • Sherwin-Williams announced winning teams of professional contractors for its Water & Wastewater Impact Award program in 2019. They include the coatings' inspection contractor OmniTech, LLC; SUEZ Advanced Solutions; the engineering firm Hazen and Sawyer, as well as the City of Fort Lauderdale.
  • Sherwin-Williams successfully utilized its Water & Wastewater Impact Award program to identify as well as to associate (promote itself) with contractors (such as United Coatings & Linings, UCL) installing some of its reliable products.

Research Strategy

An initial investigation got conducted to uncover case studies or examples illustrating how home improvement products companies are strengthening their relationship with contractors. This strategy reviewed a compilation of various case studies published by content marketing companies such as Group High. We wanted to uncover if these companies were providing offering classes, certifications, specialized equipment, training, better or longer warranties to contractors, to boost their relationships. Insight revealed that Moen (a faucet brand in North America), is powering an active "influencer outreach program" to tell its product story. Research to uncover details of the program and if it boosts the relationship of the company with its contractors failed to disclose any helpful findings as such data is not made public.

Another investigation got conducted to uncover case studies or examples illustrating how home improvement products companies are strengthening their relationship with contractors by going through reviewed industry publications such as ContractorMag. ContractorMag revealed how a faucet manufacturer (Moen) recently partnered with mikeroweWORKS Foundation to support trade-focused scholarship programs in 2020. We also tried to find if the beneficiaries of the sponsorship include contractors (as defined above), and the metric of success revealed that the partnership (between mikeroweWORKS Foundation and Moen) has offered over $3.1 million in work ethics scholarships to about 900 recipients. Further insights revealed that beneficiaries of the sponsorship are "students pursuing a career" in skilled trade professions such as plumbing. None of the uncovered insights revealed whether the included students are bonded individuals or whether they often get hired to complete home improvement projects.

We also examined the websites of home improvement products companies such as Georgia Pacific, Moen, and Sherwin Williams to see whether these companies are strengthening their relationship with contractors. We were able to uncover that Moen has a dedicated resource that grants contractors exclusive access to its products and services. It uses a web resource specific to contractors listing home improvement products. Additional research to uncover how this feat (unique web resource for contractors) affects the relationship between Moen and contractors, as well as the metric of success, did not reveal any useful finding. Moen does not make such details public. We assumed that Moen and other home improvement products companies may not be under any obligation to publish the complete information on how they are strengthening their relationship with contractors. Further research revealed that Moen offers "something for every professional," such as training on its home improvement products. Analysis to uncover the success metric of Moen's training for professional (certified) home improvement installers, licensed and bonded individuals, or companies that homeowners hire for home improvement projects did not reveal any helpful insights.

We investigated news resources and leading magazines related to "residential remodelers." Magazines with articles on home improvement contractors and service providers such as Qualified Remodeler got examined. We also investigated if home improvement products companies are providing classes, certifications, specialized equipment, training, better or longer warranties, research sponsorships to contractors to boost their relationships. Insights revealed that Moen promotes its business with contractors via a rewards program that sends selected contractors to Super Bowl programs. The company uses the promotion known as "Buy it for the Big Game" to promote its products with contractors. Moen introduced the Contractor Rewards loyalty program way back in 2016. Further research was conducted to reveal how the rewards program affects the relationship between Moen and contractors but we were not able to uncover any useful information. The free program offers enrollee contractors points to purchasing specific Moen products.

We also investigated publications (such as Water Online) dedicated to home water resources, as well as installations channeled to or from homes such as wastewater and septic connections. This strategy investigated case studies or examples illustrating how home improvement products companies are strengthening their relationship with contractors. Insights revealed that Sherwin Williams utilizes the Water & Wastewater Impact Award program to identify and associate (promote itself) with contractors (such as United Coatings & Linings, UCL) installing some of its reliable products. Apart from tank coating, United Coatings UCL also offers home improvement installation services related to roofs. Research to uncover the impact or success metric of Sherwin Williams' award to contractors did not reveal any helpful insights.




Part
02
of seven
Part
02

Drainage Installation Contractors

Other than landscapers, foundation contractors, plumbing contractors, and waterproofing and drainage contractors are most likely to provide drainage system installation services.

Foundation Contractors

Plumbing Contractors

  • Plumbers are also likely to install drainage systems because they usually work with many types of drain pipes. Drainage systems comprise many series of pipes that carry water and remove it from a specific place.
  • Same Day Service and Parks' Plumbing & Sewer Inc. are some examples of plumbing contractors that install drainage systems.

Waterproofing and Drainage Contractors



Part
03
of seven
Part
03

Contractors: Brand Selection

Among contractors that work in residential/home improvement categories, the key criteria typically used when selecting which brand of supplies they purchase (tools and/or materials) are performance and durability, familiarity and past experiences, price, availability, and warranties.

#1: Performance/Productivity

  • A survey of contractors that investigated how they select which brands of tools to purchase found that performance and productivity were the most important factors, which was indicated by 44% of respondents.
  • Performance and productivity were defined as "tools that deliver the best results" and "trust".
  • According to John O'Hara, partner of EMA Contractor Specialty Group, contractors are primarily concerned with the results the tool provides and if it actually can do what it says it can do.
  • This survey examined electricians and electrical contractors. It can be logically assumed that these types of contractors are regularly be involved in things like home improvement/remodeling.
  • Another survey, (this one was done for residential contractors specifically) analyzed their purchase criteria importance. Durability ranked number one with 73% of respondents agreeing.

#2: Familiarity/Past Experience

  • In the same survey discussed above, more than 35% of contractors said that familiarity and past experiences influenced which brands they choose. This was the second highest-rated consideration when choosing a tool brand to purchase.
  • Other studies have shown there is a lot of brand loyalty among contractors in general. For instance, a survey of 1,100 contractors in 2016 found that across contractors in the following categories: windows and doors, trim and molding, roofing, decking, and siding, between 40% and 60% of contractors were in a dealer loyalty program and between 45% and 70% are in a manufacturer's loyalty program.
  • This same survey concluded that "if the [contractor] was in just one manufacturer loyalty program involving a product category, that program's brand was likely to get 62% of the contractor's total spend in that category."

#3: Price

  • In a survey of residential contractors, price was the second most important criteria, with 69% of respondents agreeing. (The first was durability, which has been included in #1 above).
  • When it comes to buying building materials, one survey found that price was a key purchase criteria, and was found to be even more important than brand name/brand value. However, the opposite was true for tools. It was noted that price was especially important when it came to purchasing building materials due to the fact that contractors often have to compete with other contractors in attempts to offer clients the best prices. Whereas with tools, the durability and performance of the tool were considered to be more important than price.

#5: Availability

  • In the same survey noted in #3 above, availability at their preferred retailer was the third most important criteria listed, with 64% of respondents agreeing.
  • Another survey found that the availability of a product played a key role when it came to brand substitution (or, choosing an alternative brand than usual). The key reason for this is because contractors often find themselves having to purchase equipment or materials in the middle of a project that they need immediately and are therefore limited to what is available nearby.

#6: Manufacturer Warranty

  • In the same survey noted in #3 above, manufacturer warranties tied for third place as the most important criteria considered, with 64% of respondents agreeing.
  • One contractor with 30-years of experience says that he is loyal to tool brands made in the U.S. because they have a lifetime warranty.
  • Milgard has been recognized by the BUILDER Magazine Brand Survey as the brand most used by Western U.S. builders for windows. Milgard's marketing director states that the full lifetime warranty they offer on their windows is a key reason why the brand is so popular with builders and contractors.
Part
04
of seven
Part
04

Home Improvement Product Preferences

Customers are significantly more satisfied with products recommended by pro customers, family, and friends.

PROOF THAT CONSUMERS HOME IMPROVEMENT PRODUCTS TEND TO PREFER RECOMMENDED BRANDS

  • Industry speakers at the HIRI 2017 Insights Conference in Chicago shared some insights regarding the home improvement industry, including that consumer satisfaction is significantly higher when they get product recommendations from pro customers (contractors or professionals), family, and friends.
  • About 75% of homeowners prefer personalized experiences with home improvement products, including personalized recommendations & suggestions, and 25% are between very and extremely interested in such experiences. As such, due to their detailed knowledge of a product's features, consumers would prefer contractor recommendations when choosing a home improvement brand. They might also prefer product recommendations from the home improvement store as they might have customer data with which to suggest the most satisfying product.
  • A key differentiator between top-performing home improvement retailers is the "consistency of their staff to consistently and thoroughly explain product features."
  • For example, Ace Hardware implemented the use of a solution that "uncovers hidden consumer behavioral patterns that predict consumer demand on a store and SKU level. Then, the patterns are translated into actionable recommendations that allow customers to fine-tune their assortment and improve store execution."
  • The company did this while trying to drive the sales in its brick-and-mortar stores and improve store execution.
  • Ace Hardware ran product recommendations twice every month and achieved a 2.1% store growth within the same period.
  • The home improvement company also noticed that the products that received recommendations doubled or tripled their sales in most cases when compared to previous periods.
  • Top home improvement company Home Depot is now seeking to add personalized product recommendations to its website's homepage in order to drive sales.

RESEARCH STRATEGY

We found limited information regarding the preferences of consumers for home improvement brands that are recommended by their contractors or home improvement stores. We leveraged several media reports from sites such as Forbes and PR Daily, among others, for the same. However, they did not provide any useful information for the request. Next, we consulted research studies from sites such as Contracting Business, which gave details of surveys by Modernize. However, it did not provide any information regarding brand recommendation impact on consumer purchasing preferences of home improvement products. An online survey by Path Velocity, however, gave some insights into the effect of personalization on consumer satisfaction, which we provided in our findings. We also obtained the summary of an industry conference in Chicago, which provided proof of increased consumer satisfaction, as well as a case study from top home improvement company Ace Hardware, which provided hard result statistics of implementing product recommendations.
We made use of a 2017 source that is older than Wonder's standard two-year timeframe. However, we used it because it provided useful insights for this report, and it gave details of a survey conducted in that year.
Part
05
of seven
Part
05

Contactor's Business Needs

Some of the most important business needs for home improvement contractors in the United Sates include: finding skilled workers, cost management, managing their online presence, lead generation, and competing in the market.

#1: Finding Skilled Workers

  • 80% of contractors surveyed said they have difficulty finding skilled craft workers. A survey of residential roofing contractors also found this to be the top challenge in the industry, with 68% of contractors agreeing.
  • In the same survey, 33% of contractors expect that it will continue to be hard to hire, while 48% of contractors also stated that they feel it will be more difficult to hire such individuals over time while only 1% felt it would become easier.
  • A 2017 survey of residential restoration contractors found that recruiting and retaining high-quality workers was the top business challenge (82%).
  • Hourly craft positions represent the majority of the contracting workforce. According to the Associated General Contractors of America, "shortages pose a significant risk to future economic growth."

#2: Cost Management

  • A 2017 survey of residential restoration contractors found that managing margins and profitability was the second top business challenge (71%), while cash flow challenges ranked in fourth place (50%) and the increasing costs associated with doing business came in fifth place (46%).
  • Increasing costs of building materials was found to be the second-highest perceived industry challenge among residential roofing contractors, with 57% of respondents agreeing. Insurance and healthcare costs came in fourth with 35%, and cash flow/financing came in seventh place with 13%.
  • Additionally, the roofing contractor survey found that 74% of contractors felt labor costs have gone up in the past year.
  • Cost management is important to contractors as "cost and money are strictly related to the project and have a major influence on it during its whole lifecycle."
  • Many homeowners surveyed (46%) said they aren't confident in their ability to plan a budget that is enough to complete their project, while another 46% were only somewhat confident, suggesting that these customers may often rely heavily on contractors when it comes to cost management.

#3: Managing Thier Online Presence and Lead Generation

  • Online presence is important for residential contractors as 51% of customers conduct research using online articles prior to beginning a home improvement project. This same survey found that homeowners spend around 1-5 hours researching before submitting a lead to a contractor, and 28% said they spend more than 10 hours researching.
  • A contractor's web presence also serves as way for them to communicate to prospective customers, which is important when it comes to generating leads because many homeowners have said that poor communication with the contractor would prevent them from hiring.
  • A contractor's online presence can serve as a well to help inform and educate consumers about their project, especially when it comes to things that customers struggle with, such as financing options. Homeowners often use the internet to get quotes from contractors and look for ways to finance their project.
  • Jason Polka, CEO of Modernize, the company that conducted the survey mentioned above, noted that contractors can use their websites to help educate homeowners about financial options. Unclear pricing was a factor that would prevent a homeowner from hiring a contractor among 20% of survey respondents.
  • Price quotes and online ratings and reviews were noted as the second and third most important factor among homeowners when it comes to selecting a contractor, with 23% and 17% respectively.

#4: Competing in the Market

  • A 2017 survey of residential restoration contractors found that differentiating their company was the third top business challenge (54%).
  • According to president of Joe Hall Roofing, Brett Hall, increasing competition is the most important business challenge. He further notes that small contracting companies often have lower overhead but are capable of attracting consumers by making a "mirage" using their online presence.
  • Timothy Hershey of Thoroughbred Contractors noted that experienced contractors who manage their business well are under threat from low-balling new entrants who produce lower quality work. Of the more experienced companies, he notes: "They know that there is a definitive difference between price and value, and have to fight tooth and nail every day to want to provide that value."
Part
06
of seven
Part
06

Local General Contractors Market Overview

An overview of the local general contractors market in the United States has been provided in this research. General contractors oversee all aspects of a remodeling or home improvement project, while subcontractors are hired to tackle smaller and more specific tasks. These general contractors make money by charging homeowners for labor and materials. Most home improvement companies are small businesses with less than 10 employees.

Types of Services Offered

Business Model (How They Make Money)

  • General contractors deal directly with the homeowner. When a homeowner signs a contract, he or she is typically expected to pay a deposit. These deposits are usually a percentage of the total job cost. In California, for instance, the maximum permissible deposit is either $1,000 or 10% of the overall job cost, depending on which is smaller.
  • After initial deposits, a payment plan is made "based on a defined amount of work being completed."
  • Also, general contractors mark up everything they pay to make a homeowner's job happen. The mark up applies to materials and labor costs.

Average Size of Company

  • Some home improvement/remodeling businesses are sole proprietorships while others have hundreds or thousands of employees. However, "The vast majority of businesses have fewer than 10 employees."
  • According to Construct-Ed, general contractors, including construction managers, typically "earn an average of $43.93 per hour, or $91,370 per year."
  • For a one-man company, the income can be about $20,000 yearly, if the contractor works part-time. However, large contractors with multiple crews may earn revenues in the seven-figure range if they complete several large jobs over the year.
Part
07
of seven
Part
07

Marketing to Contractors

Sherwin-Williams and Home Depot are companies that market their home improvement products directly to contractors by offering exclusive discounts and benefits; attending trade shows; offering dedicated contractor support by phone, online, or in-store; publishing apps that help contractors; and help contractors and potential customers connect.

Sherwin-Williams

Home Depot

  • Home Depot offers exclusive benefits and discounts to contractors and other professionals through their The Home Depot Pro program, which includes project pricing, commercial credit, bulk pricing, shipping & delivery services, premium-brand tool rental, expanded assortment, and mobile coupons. In addition, the program also offers reserved parking for its members, dedicated checkout and order loading, and ordering over the phone or buying online and picking up in-store within two hours.
  • The company has attended and is scheduled to attend trade shows, including the following: Atlanta Home Show, Richmond Home Show, Des Moine Home + Garden Show, St. Paul Home & Patio Show, and Minneapolis Home + Remodeling Show.
  • Contractors and other professionals have dedicated customer support, in-store purchase support, and commercial & consumer credit customer support. Home Depot's over 2,200 store locations in North America has a Pro Desk where interested contractors can talk to someone about their projects, purchases, and other relevant queries.
  • According to the company's CMO, Kevin Hoffman, to address the needs of contractors, who are heavy mobile users, Home Depot keeps contractors in-the-know through mobile notifications. Home Depot sends out content that contractors need, such as product features, specifications, pricing, and available quantity.
  • The company also offers contractors and other professionals a loyalty program called Pro Xtra. In this program, members can get the "lowest price on orders $1,500 or more." This program also includes purchase tracking up to two years; Pro Xtra Paint Rewards, a reward system that let professional painters get up to 20 percent discount on paints, stains, primers, and solvents; and Pro Xtra Business Tools, which include Text2Confirm purchase authorization, reloadable gift cards, and Pro Xtra virtual ID.
  • Home Depot also has apps available on the App Store and Google PlayStore to help its customers, including contractors, and these are The Home Depot app, Workforce Tools, and Project Color.
  • The company helps people find the right contractors for their home-related jobs through its Pro Referral service. With this service, contractors can create a public profile that prospective customers can view as they look for the right person for the job needed to be done. In their Pro Referral profiles, contractors can create a mission statement, specify the niche and categories they specialize in, and publish their portfolio.
  • Professional contractors make up only 3 percent of the Home Depot's customers; however, they generate 40 percent of the company's revenue.
Sources
Sources

From Part 07
Quotes
  • "Why is Sherwin-Williams Offering ProDiscounts™? Contractors like you have relied on us for more than 150 years for quality products, service and value. In our long history together, we've based our business on one simple foundation: Your success is our success. Just like you do with your customers, we're always looking for ways to make it easier to do business with us. ProDiscounts™ takes the guesswork out of your painting supplied pricing. It's one more way to simplify your daily routine and increase productivity and profitability."
Quotes
  • "Sales to residential repaint contractors remained our strongest customer end market in the year, with sales increasing by a double-digit percentage. All other customer categories were also positive for the year."
Quotes
  • "At the end of 2018, we announced a new consolidated, go-to-market strategy for all of our Pro initiatives, including our MRO business (formerly known as Interline), under “The Home Depot Pro” banner. With The Home Depot Pro, Pros have access to a comprehensive offering that includes a combination of our vast store network, a best-in-class dedicated sales force, quality and affordable products from trusted brands, an extensive delivery network and online business solutions. We provide specialized programs such as an expanded MRO assortment, inventory management solutions, custom product offerings, in-store Pro desk and Pro services, and enhanced credit programs."