Navigating through tough market conditions
Listers’ MD Roy Frost shares some effective – but sometimes forgotten – tips on how to make the most of your marketing spend and reminds us to treat every lead like gold dust!
We continue to experience tough market conditions and there are no signs that the market will get any better over the next 12 months in the home improvement industry. In fact, according to UK Economists and their forecasts, interest rates are set in at their current level throughout 2024 and they may have to jump a little higher to combat embedded inflation. The banking industry trade body recently showed that more than 2m fixed-rate homeowner deals will expire between now and the end of 2024.
The net result is a slow-moving housing market and low consumer confidence, both key drivers for the home improvement industry. According to systems companies, large hardware suppliers and FENSA data, the UK market for PVC windows and doors is down somewhere between 12% – 15% year on year.
UK Window & Door Group failure and troubled times at Safestyle
Last month, UK Windows & Door Group, the largest trade fabricator in the UK, fell into administration with the loss of 650 jobs. They supplied over 6,000 windows and doors a week across the UK as well as glass sealed units. There have been other less high-profile failures, particularly installers and fabricators who supplied large developers and regional house builders. Sadly, it is inevitable that there will be more casualties over the next few months as the market slows for the winter.
You may have seen the collapse in the share price at Safestyle. They reported that the market is down 12%. Their order values are down as they discount, and their marketing spend is up as they chase more leads. They now need a fresh cash injection from shareholders – which will be unlikely.
We really are on the cusp of a big market shake up as many others could get caught up in this significant slowdown.
So, what does this all mean for us and our customers and how do we all navigate through a difficult market?
Treat every lead like gold dust!
We can see from the experience at Safestyle that chasing after more and more leads in a depressed market is a very expensive fix, particularly online where there is huge competition for position. The net result right now is higher and higher Pay Per Click bids where the only winners are Google and Facebook. Let’s start there and watch out for the law of diminishing returns. Pushing marketing percentage cost of sale beyond your budget is very dangerous for your bottom line! I understand that some companies are currently spending more than 20% of their sales value on lead generation and that is simply not sustainable!
I was recently reminded by a customer of some of the more cost effective, tried and tested, established sales and marketing endeavours that we sometimes forget about, and some cost practically nothing.
Let’s also remember to treat every lead like gold dust, post pandemic times have passed. Have a look through my simple tips and reminders:
• Your existing customers are more receptive to your approach, they have had a good experience of you and your company, but they probably don’t know about your latest product offer. Winter is upon us, and the heating is back on so arrange a leaflet-drop or simply send them an email headlined “Save up to £10,000 on your energy bills with NEW A+ Energy Rated Windows & Doors over the next 20 years”! Invite them to call you or to visit your website to arrange a “free no obligation quotation”, offer £250 off orders installed before the 31st January 2024* (*on orders over £3,500 in the smaller print). Consumers respond to ‘Why Now Offers’ and need that nudge that ‘Call to Action’ make it very clear that it’s a good time to purchase your new products.
• Ask your customers for recommendations. Incentives for recommendations work well too, give their friends your latest offer and send a £50 M&S voucher to your customer when their friend purchases. Recommendations are the best leads. Facebook works well for this so get a post organised that can be shared.
• Ask installers to post leaflets around your current installations, better still do it yourself, apologise for any potential inconvenience caused by the installation as well as including your offer as detailed above.
• Get new installation boards organised at your local signage company, or banner flags with your company logo and phone number, be visible when you are in the communities.
• Are your existing customers leaving good reviews on Google? Good reviews promote TRUST, which is the key to generating good quality enquires. If you need help then contact us and we will put you in touch with The Review Centre, who have a simple and affordable process that quickly feeds positive reviews into your website.
• Add a simple consumer finance offer to your portfolio. We recommend Kanda, which is very easy to access. They have low rates and are easy to deal with, and you don’t need a consumer credit licence. Go a step further and we can put you in touch with one of our other partners – Consumer Credit Solutions – who have products like ‘Buy Now Pay Later’, which can be positioned as ‘Buy Now, Pay 2025’ on a 12-month agreement. This attracts homeowners that need a credit facility – customers you wouldn’t get without this in your kit bag.
• Did you know that over 30% of homeowners who contacted you over six months ago still haven’t committed to their window and door purchase? It surprised me too, but I’ve done the same survey many times, and it’s pretty much the same number. So, go back to every quote you have sent out over the last 12 months and ask them politely whether you can still help with their enquiry.
• Be the expert in what you sell. You don’t need to be a ‘Product or Trade Brand Collector’ just have the right products and be the expert, keep your portfolio simple. To have credibility in a sale you must know more than your client and it is difficult to know everything about every product the 100s of Trade Reps would have you buy from them! Remember big window companies sell a lot of windows but big companies keep it simple. Believe me – it works.
• ‘Value for Money’ is ultimately what a homeowner wants to know they have achieved when they make their buying decision, so don’t be lured into thinking that your prices are too high! Most buyers will feedback that you are too expensive, it’s the obvious thing to say isn’t it, but is that really the reason they didn’t buy from you? What helps to promote value for money in your pitch? Clearly having the best performing products helps but equally sharpening up your presentation, take out a sample window to demonstrate the features and benefits.
First impressions matter, so review your image. How your compony looks creates that essential trust in you and your company, does your quotation stand out when it’s being compared against your competitors on the coffee table? Get a new updated branded brochure (our Easy Marketing Team can help). Access our photography library, good pictures and video explainers speak louder than words. Freshen up your website with new ‘Calls to Action’ and ‘Why Now Offers’.
You don’t need to be the cheapest – you need to offer your client value for money and peace of mind. Homeowners will pay for that.
• Finally remember to treat every lead just like we all did in the good old days, like gold dust!
I hope this helps you make more of what you have in this difficult market. If you want to chat through any of this then feel free to call me on 07808 365234.
Onwards & Upwards.
Roy Frost, MD Listers & GJB Holdings Group