Marketing: California Hybrid
authors Patrick O'Toole
The remodeling industry is home to many great local and regional firms with very strong brands in their respective markets—Case Design & Remodeling in Washington, D.C., and the Neil Kelly Company in Portland, Oregon, are two examples. But even for these leading companies, market share locally remains low—1 or 2 percent of remodeling activity in their home markets. It is a sign of just how local and fragmented remodeling remains. At the same time, both firms have shown an ability to take their brands to other markets: Case with its franchises and Neil Kelly with its company-owned branches around the Pacific Northwest.
But these are rare examples. Design/build and full-service firms are often an extension of a single individual who manages to build a team capable of perhaps 50 to 100 projects per year, even with small jobs put in the mix. That is why these types of firms are traditionally not marketers. They live off strong reputations and the word-of-mouth referral and repeat business that follows.
Specialty and home improvement firms stand at the opposite end of the spectrum. They are marketers spending as much as 10 to 15 percent of their top-line revenue to generate leads. These are dominated by window replacement, roofing, siding, deck, sunroom and basement finishing firms, just to name a few specialties. In the past, there were very few similarities between specialty and full-service firms. But that may be changing.
According to annual marketing spending numbers found in Qualified Remodeler’s Top 500 data, the industry has seen a steady uptick in the number of full-service and design/build firms adopting more aggressive lead-generation activities. Where once average spending by full-service and design/build firms represented 1 or 2 percent of gross sales, this average has steadily ticked upward to 4 and 5 percent of sales.
This begs the question: Will there come a day when a new business model in remodeling will enable a local full-service remodeler to quickly scale up and grow its brand to become a regional or national player? That company would most certainly need to be a hybrid—a firm focused on marketing, but with a portable project management and customer-relationship management system capable of handling the complexities of full-scale remodeling. Treeium, of Valley Village, California, near Los Angeles, is certainly giving it a go.
The company, No. 35 on our 2017 Top 500 list, reports $32 million in sales on approximately 1,300 projects. They spend more than $2 million on lead-generation alone. Additional funds are budgeted for the separate marketing discipline of branding, says Seda Kirakosyan, Treeium’s director of marketing. Indeed, Treeium is a hybrid firm with a strong, recognizable brand driven by a passion to drive leads and scale up after only seven years in business.
Treeium has grown rapidly since its founder, Moty Ginsburg, purchased a small design/build firm in 2010 billing less than $1 million annually, changed its name and began focusing on an aggressive mix of digital and online advertising. Key to its growth also has been its call-center operation—very unusual for a full-service firm. Maybe its most unique characteristic of all: The call-center and all of the company’s systems are backed by a proprietary software program written by a company employee, Gabriel Posternak. The company has even moved to several locations around the Golden State. Today, it operates branches in San Diego, Irvine and Pleasant Hill near San Francisco, as well as in the Inland Empire region. Ginsburg explains the decision to seek a technology solution began when traditional media advertising, namely print, began slipping badly as a lead source.
“We saw where print was going, and this is where the shift started,” Ginsburg says. “So that’s why when we launched, we didn’t just develop a technology but also developed a brand around it. It was key to do both of them at the same time. We developed a brand and technology at the same time.”
Branding, Lead Generation and Proprietary Technology
Most remodeling company names are commonly tied to geography or the founder’s last name. Ginsburg, who is an entrepreneur with a background in technology and finance, wanted a name that was recognizable yet completely original. In short, he wanted a brand name the company could build from the ground up. They settled on Treeium for a number of reasons, but mostly they liked the green and organic connotations it evokes.
“We sought to create a brand that homeowners really want to deal with, the company Treeium,” Ginsburg says. “We want everything they see, our reviews and reputation, to bring them to a point that if the prices structure right, you know, they would like to do business with us.”
First came the brand, then came the marketing. In hiring Kirakosyan, the company set out in new digital directions. Google pay-per-click, Facebook, email marketing and content marketing became the focus. In particular, Kirakosyan zeroed in on Angie’s List, Houzz and HomeAdvisor. Today, Treeium is recognized as HomeAdvisor’s top remodeling company partner in California. The primary reason, among several, is the speed with which someone from Treeium responds to each inquiry. Kirakosyan explains the company responds to all inquiries within 30 seconds. In a segment of the industry where some folks reply with emails every evening, this is a game changer.
Call-center employees are trained to respond by phone call, email and text depending on the preference of the prospect. If no preference is given, they try all three.
“We train our call-center employees to answer more than just basic questions in order to get the homeowner engaged,” Ginsburg says, explaining the process. “But eventually, the idea is that we convert this call to an appointment. Keep in mind a lot of it right now is happening online, where the customer gets an automated email or text from us letting them know they can contact via email. If he or she is not sure about when to book the appointment, we send them a nice template, ‘Thank you for calling,’ with the link. That link takes them to an online appointment module where they can book his or her own appointment based on inventory of people we have in different branches. It doesn’t mean that we have all days, all hours available.
“Then prior to the appointment, there are reminders via text, via email that take place so he or she can confirm those appointments,” he continues. “They also have options to load those appointments to Google calendars, any other calendars out there, so it will be harder to forget.”
This type of system and software is increasingly common among home improvement companies, particularly specialty firms. Typically, firms will acquire or lease specialized CRM and call-center systems from outside vendors, then they bolt them onto other company software purchased elsewhere. According to Ginsburg, the company was heading down that route but was not satisfied with having to switch customers into new software for each step of the remodeling process, feeling the customer experience would be too bumpy.
Indeed, the technology aspect of Treeium’s rise is perhaps most noteworthy among its accomplishments. As previously stated, the entire system was built, section by section, by an employee of the company, Gabriel Posternak, with the assistance of contracted coders working under his direction. No costs associated with the construction of the platform were given, only that it was less costly over time to invest in the systems upfront.
In 2012, Posternak built the CRM and call-center systems. In 2013, Treeium added a dispatch system, which took in factors like geo-locations, in order to dispatch salespeople to appointments. Then in 2015 and 2016, they built out the remainder of the system with a front end for the customer and a back end for contracts, payments, estimating, purchasing, project management, completion and post-sale communication. Employees, field superintendents and trade contractors all have separate logins where they can view and manage projects in their individual queues. From there, each member of the team can post messages, images, and videos directed to clients, other partners and employees as individual messages or in groups.
This magazine is not a technical journal; the editorial team has experienced many software demonstrations and this one—with expectations of a home-grown software slightly lower—exceeded expectations when viewed from the client perspective. It appears to be a solid, very satisfying user interface from start to finish. That was the goal set out by Ginsburg, Posternak and Kirakosyan, and it appears to be the reason why the company can manage so many jobs in several locations with an in-house staff of 45.
“Moty wanted to scale really fast so the dream was growing really quickly, really fast and we really needed to put not just people, but really processes and technology in place to be able to sustain the kind of growth and not just throw everything (the software) away,” Posternak says. “So we had to build an intelligent solution on the call center to be able to have the least amount of people, but the most effective, not just on managing everything that we pour into our system, but able to connect the most and get the most out of it through our lead-scoring and qualification systems that we have in place.”
Ginsburg cites efficiencies in the call-center operation since the new software has been in place. He also sees the seamlessness of their system to the client, which does not yet have a name but offers a way of doing business with busy clients who want to operate online as much as possible. Yes, there are meetings and measurements, but proposals are all online. The client can sign them fast or wait. Sometimes the company will have proposals accepted 30 or 60 days after they were sent. In addition, about 50 percent of Treeium’s payments come through ACH transactions, which is a huge boost in cash flow versus traditional means. And, overall, clients seem to like the interface and the overall process better—it is consistent with the way they live now.
“Mainly is the word communication. We want to be sure that at anytime, anyplace, anywhere, the communication is flowing,” Ginsburg notes. “So communication from a customer point of view means having a customer portal where you can login at anytime, anywhere and have access to the contract, change orders. They can have access to pictures, videos that we loaded; it can communicate via messaging with the group of people here through the portal. It can pay, do transactions in both directions. A person doesn’t need to be at home to do the transaction. A transaction is the barrier we deal with a lot of customers. A lot of homeowners are traveling on business, and they’ve signed their contracts, they pay the down payment, and we start the job even before they come and they open the door for us. They leave us the key or they have a manager bring a key or whatever, so that we don’t delay processes.” |QR