Embrace the Future
authors Kacey Larsen | February 13, 2019
If you could look into a crystal ball to foresee the future of remodeling businesses, what do you think you would see? How might various processes or client interactions look different in five years? And which innovations may be available or in the pipeline that could impact or even evolve steps along the way? What role might technology play in bringing about advancements to business processes?
Clearly, there are many questions about the future of remodeling. And while there are several industry forecasts for remodeling market conditions—such as the NAHB’s Remodeling Market Index and the Joint Center for Housing Studies of Harvard University’s Leading Indicator of Remodeling Activity—we turned to you, our readers, seeking answers to a few questions about the future of remodeling processes.
The results for our “Remodel of the Future” survey show 89 percent of participants anticipate that five years from now business process—such as sales, design and project management—will be simplified and/or made more efficient by business technology advancements. In fact, the top-ranking area of the remodeling process survey respondents believe will undergo the most significant change in the next five years is estimating/bidding. Design processes and customer relationship management were ranked the next highest, respectively.
“It’s a conversation we could have all day or even multiple days, because the reality is that everything is going to change. Everything the way we know it is going to change, and it should because the model that we have is so archaic it’s rife for complete disruption,” says Larry Green, CEO of System Pavers in Santa Ana, California. “When you think about the process of home remodeling, the model—whereby salespeople have to spend half their time in the car to go and visit customers, sort of assess the site, measure, design and quote the project—that is inefficient and, therefore, is going to change very, very quickly.”
For Green, the future starts now as his company begins to implement changes to its lead generation and sales processes. When it comes to marketing, he notes he is looking for what’s unique or different, or what gets a client to respond, and he references the notion of going “viral” by gaining traction on social media. “If we can drive value through the process of technology then that’s a great story for the customer, or if you can drive really cool experiences, that’s a really great marketing angle as well,” Green says. “An example, I believe our sweet spot in future-forward design will be done using virtual reality. Well, that means I can design every household’s backyard in America by pushing a button; and if I can send you a marketing campaign that says, ‘Hey, I’ve already designed your backyard. Do you want to see it?’ or ‘Here’s a before of your house. Do you want to see the after?’ That’s compelling.
“I think there’s the way people consume and the way they respond, and the internet is going to keep driving that. But I think it’s just a different way of doing things; it just creates more opportunities, a more fun, custom experience. And I think that’s where opportunities come from for lead generation,” he continues. “We are working on issues of remote presentations. We’ve seen that by doing web-based consultations, utilizing the data that’s out there for the entire design and sales process, it becomes less invasive for the client. Using this method, we’re seeing closing rates jump up by 40 or 50 percent. And we’re seeing ticket price jump up also by, I would say, 25 or 30 percent, sometimes even a little more. Because we’ve discovered the way to do this, it immediately opens us up for the ability to scale the whole sales part of the process across the country.”
In an industry where referrals are still often the bread-and-butter of lead generation, Elliott Pike, GBAHB Master Remodeler, CGR, CAPS, managing member of ELM Construction in Vestavia Hills, Alabama, observes the methodology has changed. “Our biggest source of leads is through referral, and it used to be, even just a few years ago, ‘You did our cousin’s neighbor’s kitchen and they were happy with it, so we wanted to call.’ And it’s still the same thing, but now it’s through things like Facebook,” he says. “We get calls all the time where when we ask how they heard about us, the answer is through the Facebook page ‘What’s happening in Birmingham.’ To me, that’s a referral; it’s just a different kind of referral. And then the power of the review is still pretty strong, which we’ve known about that from Angie’s List and things like that—but now it’s Houzz, Facebook and Google. It’s something we focus on every day.”
Dawn Dewey, senior vice president of marketing and business development for Dreamstyle Remodeling in Albuquerque, New Mexico, echoes the importance of reviews, explaining, “It’s all about motivating your happy customers to advocate for you on third-party review platforms because that’s where consumers find reviews to be credible. A consumer is not going to value a review posted on our own website or some unknown home improvement website with the same weight they would value a review on Google or Facebook.” She adds that motivating happy customers to share their positive experiences is a challenge, especially relative to those who may have a poor experience. This is an area Dreamstyle is continuing to refine, especially because company president Larry Chavez Sr. says, “The most important marketing consideration we have is reviews.”
Another area Dreamstyle Remodeling continues to focus on is its use of lead aggregators like HomeAdvisor, because Google tends to rank such sites highly, which can be key to reaching potential clients during the research phase. “We do a lot of business with lead aggregators. We’re continuing to grow it and find ways to be successful. They have the power to change the landscape and the sales cycle in very impactful ways,” Dewey says. “One of those things Larry (Chavez) brought up to me recently is HomeAdvisor is now advertising ‘Find out what your neighbor is paying for their home improvement projects.’ So they’re offering people the ability to get an average price range, which will become a challenge for us—we don’t necessarily want to be going into an in-home consultation with someone already having in mind their neighbor paid half of what we’re going to be pitching them. Challenges like that are going to become more and more important for us to find ways to work around. Additionally, finding ways to automate the sales process more is something we are cognizant of and focusing on as the demographic shifts, and even as the existing demographic becomes more technologically savvy.
“The winner is going to be the one who figures out the way to overcome changing consumer demands when people become too impatient to wait for you to come out and give them a long pitch before providing them with a price,” she adds. “I think we’ve got to find opportunity in every challenge.”
Prepare for the Future
Qualified Remodeler’s “Remodel of the Future” survey asked: Do you consider yourself/your company to be an early adopter of new business process technology? Findings indicate that 61 percent of reader respondents list themselves in the “yes” column, while 39 percent say “no.” In the interest of full disclosure, each of the remodelers we interviewed fall into that “yes” group, but that’s not to say their paths toward integrating business technology haven’t been without deliberation, testing different products, and in stages or scaled implementation.
Yet, it might be easy to presume that any changes to remodeling business processes are being caused by homeowners. A clear example of this is the evolution of client communication, notes Greg Kraus, Assoc. AIA, project director at Vujovich Design Build in Minneapolis. “The golden rule a few years back was you never really text homeowners because it was such an informal way to communicate; and now, in some sense, it’s almost replaced email or even replaced phone calls,” he says. “I don’t think that face-to-face relationships—as much as brick and mortar stores are kind of going away—people still want that human connection and interaction, especially when they’re dealing with something as intimate as a home renovation. [But] I think there could be a comfort level in doing things more digitally than face-to-face; I think there’s going to be a convenience factor. I think people’s lives are getting busier and busier, so it’s ‘Give me the critical information now, and we’ll deal with everything as it goes along.’ And I think that’s just kind of the mentality of how people are evolving.”
Kraus explains that Vujovich Design Build is dedicating considerable efforts toward modernization, starting with working with outside business consultants to help expand the company’s reach when it comes to marketing, advertising and social media. Within the last year, the company has undergone a rebranding effort with a new logo, colors and tagline, and Kraus notes that the results of these efforts have been immediate.
“Getting an outside consultant to figure out the importance of how you connect, whether it’s influencers or hashtags, or many ways people who swing a hammer or sit behind a computer running a business don’t fully understand [in] the realm of what’s possible,” he says. “One of the things I’ve always loved about the industry is that regardless of the company, there tends to be kind of a family feel to it. Most companies are small businesses, and there’s a lot of information sharing [and] learning that happens from the top down. Everyone wants to know how to expand their business; everybody wants to bring in more money. And so sometimes it just takes a matter of hearing things over and over in order to make that transition.”
An example is the company’s implementation of CoConstruct, a project management software that Kraus had been advocating for several years at Vujovich. Currently, the company is using CoConstruct internally and with its clients. “We’re trying to master each piece of that tool before we just kind of blindly launch it,” Kraus explains. “We’re in the big push of mastering the selections and schedules part and getting those elements out to homeowners, because we felt those were two items that people either are questioning or need to make decisions now on those things and need to know who’s going to be in their house, [for] how long and when. A homeowner can login, get their texts [and] email alerts, find out what’s going to be happening and all that information instead of giving us a call and waiting for me to call them back. It’s all that their fingertips on their phone, [and] their iPad. And that is such an efficient way for us to be able to give them that information.”
Pike of ELM Construction and John R. Sperath, CAPS, president and owner of Blue Ribbon Residential Construction in Raleigh, North Carolina, also use CoConstruct within their respective design/build businesses. Sperath has been using the project management software for about three years, while Pike switched to it from another platform within the last year. Each company, including Vujovich, uses the software slightly differently, but all see similar benefits as far as client communication and business efficiencies.
Pike explains, “Having our projects on the cloud, giving our clients access to their schedules, their change orders, [and] their budgets, that’s been great for us. And does a couple of things: It helps the process seem a little bit more transparent to the client because they have that 24/7 access. It also protects everybody involved if there’s a change in a contract amount, if there’s a scheduling change, all of it is right there. That’s one of the main reasons we did it, but I have some friends that use it and don’t turn on the ability for the clients to see it, and I think they’re missing out on a major opportunity.”
ELM Construction uses CoConstruct for its scheduling and customer communications but opts to do its budgeting and cost tracking outside of the software, using Sage 100 Contractor. Sperath, however, links most of his business into CoConstruct, including Quickbooks, though he notes the addition was not without some initial trepidation that has since turned into a success story.
“If we didn’t have technology at our fingertips, we could not do what we do with the staff that we do. Even though I’ve got gray hair, I was an early adopter of computers. It’s a love-hate relationship, but over the years we’ve been in business we’ve stayed on the forefront of adopting that stuff,” Sperath says. “The way we’re structured right now is we use QuickBooks for our accounting software, DropBox for file managment and CoConstruct [for] construction management software.”
The company uses CoConstruct internally, with its customers and with its trades and vendors. “All of our trades have logins into the system as well, so the plumber can go in and see what kind of faucets we’re specifying [or] the electrician can see the range hood and all of its specifications, so they can get the right size wire in the right place as they’re building out the project. The other thing it’s done for us is if the homeowner has a fast question or the plumber has a fast question, he/she can send a message to us [through CoConstruct], and we get notified on our phones and can respond immediately, which is super for answering those on-the-fly questions without having to call somebody back and leave a message, etc. It expedites that whole process. It’s also really good for change orders.
“The other cool thing that CoConstruct does—this has enhanced our profitability—is it interfaces with Quickbooks,” he continues. “The homeowner can see all payments they’ve made because it feeds back-and-forth. When we enter an invoice for a client, let’s say a framer sends an invoice for Mrs. Jones, we enter that into Quickbooks; that charge feeds back to CoConstruct. Weekly, our guys come into the office for a staff meeting and prior to the staff meeting they approve bills, so they can see what the budget number was, what the invoices were and who they were paid to, and say ‘This isn’t right’ or ‘Yes, this is the correct amount. I’m going to pay it.’ Because a lot of times what happens is that people quote the project and in that price quote there’s, in the case of flooring, if he’s putting in hardwood floors he’s also doing the shoe moulding. Well sometimes logistically it doesn’t work, so we may have our trim carpenter go ahead and install the shoe moulding, but the flooring guy sends us an invoice that includes the shoe moulding because that was the original quote. But we can strike through that and say, ‘No, you didn’t install the shoe-moulding, and we’re taking this off your bill.’ Normally in the past we would have just paid that bill. We’ve got one guy who is really good at [spotting discrepancies], and he probably has a total of maybe $20,000 of errors that he’s found.”
The Design of It
Another area the remodelers we spoke with note is primed for change is the design process, especially with the growing use and awareness surrounding augmented reality (AR) and virtual reality (VR). While opinions differ a bit on the future of these solutions, each agree it could be a game-changer.
“I’m not super crazy about VR because that requires somebody to have a headset, but I think there’s something about the augmented reality of people using their phones, standing in their kitchen or outside their house, and being able to see what it’s going to look like, how it would open up into [another] room or how a house is going to look next to a neighbor’s house in scale and proportion. And I think that has the potential, in my opinion, to be a huge game-changer,” Kraus from Vujovich says. “With all technology, the bell curve on that is so huge. In a year, that could be mastered. I think it’s just a matter of time before the technology catches up to the ideas.”
Designers at Blue Ribbon Construction, Sperath included, use Chief Architect for its design and renderings. “They have a method where I can upload to the Chief Architect website a model of the house, and I share that link with the homeowner [who can then] follow that link and do a walk-around or ‘fly through’ of the 3D model of their project. That’s really cool, and customers love it,” he says. “We put that link in CoConstruct, so if the site supervisor has any questions about how this soffit should look above the kitchen, they can open that drawing and zoom in and out and rotate whatever they want to see, which prevents field mistakes. We’ve not quite gotten yet to the VR mode of Chief Architect, but that’s something that’s on the horizon for sure.”
Pike of ELM Construction also uses Chief Architect for his designs and thinks both the VR and AR side of things has potential, but it “still has a little ways to go before [they] gets more widely adopted,” at least for the design/build process. However, he does see and experience the benefits of some of the digital measuring tools, helping with the estimation and design processes.
“There are apps now you can download to your phone that you can measure a room with by basically just pointing the camera to the corner, clicking a button, go all the way around and then it generates a floor plan. And that’s fairly accurate considering you’re holding a 6-inch camera via your phone in your hand,” Pike explains. “Another one we started using like crazy is Hover—I haven’t measured a roof in years just because of technology like Hover. What would take us normally half a day or sometimes a full day depending on the size of the house, we can be in and out of there in 30 minutes. It’s real money, and it’s accurate. When you sit down with a client and I’m showing them these drawings [from Hover], they’re typically impressed by the detail. But on the inside, we really don’t have a good tool like we have Hover for the exterior. I just don’t have a tool that’s affordable for the interior.”
The Next Big Thing
There are many speculations about what will be the “next” thing to have an impact on remodeling business processes. Our “Remodel of the Future” survey asked that question, and AR and VR topped the list, followed by mobile project management platforms and online ordering/automated ordering. We asked each of the remodelers we spoke with to indulge us with their predictions as well.
While attending trade shows and reading trade magazines, as well as membership in a NAHB 20 Club, are a few places Pike looks for technology ideas and best practices, he also notes looking at websites like “Engadget” and “TechCrunch.” He has discovered technologies available in the commercial construction and real estate spaces that he hopes will be modified or become more cost effective for integration on the residential side.
“Trimble, a well-known laser and measurement company, [has] some lasers used in commercial applications [where] they’ll go in, set them up in the room and start scanning; and it can produce an architectural rendering of that space with dimensions and measurements you can pull out and use in CAD or other programs. It captures every detail: crown, base mouldings, door locations, casing sizes, everything. But it’s still so expensive that it’s not something we would want to invest in right now,” he says. “I know other contractors are using photography like Matterport technology—sometimes you’ll see it in real estate—but it’s a camera system that takes almost 3D images. You set it on a tripod in the middle of the room and it basically takes a picture of the whole room, then stitches all the rooms together so you can do a virtual tour of the house [that] you can rotate and spin. I know there’s some contractors using that to capture as-builts. And they’ll have the subcontractors come, and they’ll sit down with them and blow it up on their computers and say, ‘We’re going to take all the paneling off in this room, take this crown down, this window comes out.’ You can manipulate, move around and get a better view of it, which is less intrusive to the homeowner; but, again, not something we’ve adopted yet.”
An area Blue Ribbon Construction is just starting to tap into is the use of 360-degree cameras, which Sperath believes will further help set his company apart from the competition. Initially purchased as something to experiment with, the team now uses the 360 cameras—they are using Ricoh Theta SC 360-degree cameras—on jobsites, taking one 360 image weekly. “From a marketing standpoint, we can use that on Facebook, the website or wherever because customers like that interaction stuff and prospects do too,” Sperath notes. “They can see a whole kitchen project over an eight-week period by looking at the in-progress photos and then the completed photos. We strategically try to place that 360 camera in the same spot every time.”
From Kraus’ perspective, he predicts AI technologies, especially as they continue to be accepted into more and more households, may be key. “I think there’s something there with the Siris, the Google [Home] and the Alexas that’s going to become something—I don’t know what it is [but] it’s going to be hard to get away from that. I don’t know if it’s going to become a tool we use for communication [or] if it’s going to become a possibility of how we market,” Kraus explains. “I think there’s something that would be really cool about within the industry—whether it’s some of the builder associations, NARI, things like that—connecting with some developers, trying to figure out and launching something that would be compelling. So much of this stuff is so gimmicky that it’s got to become a useful tool, not just a flash in the pan of the moment.”
The notion of 3D printing playing a role in the construction space came up with several remodelers, but it doesn’t yet seem usable for the residential remodeling realm. Dewey of Dreamstyle Remodeling, though, notes it may be starting on a smaller scale. “I’ve certainly heard some of our manufacturers exploring 3D printing for part replacement. They’re talking about being able to even print a replacement part at a person’s house if you go out for a service visit instead of ordering it. You’ll be able to just go out to your truck and print the part. I think that is close,” she says. “Virtual reality is another thing I’ve heard a couple of manufacturers talking about, but I’m not sure that’s as close.
“Video conferencing and things that are just more convenient for people are going to become a necessity for us to be able to do,” she continues. “I think of here locally, they advertise a lot that you can do video conferences with your doctor now, so you can just video chat with a doctor when you’re feeling ill, and I think everything’s going to move in that direction—particularly for home improvement. Our vice president of sales is working a lot on sales presentation app development. Now that’s still very much this stage where we have a robust presentation app, [but] we’re definitely thinking about the ways that the sales process, I think, inevitably is going to change. I don’t think the in-home consultation is going to die forever, but modifications will have to be made.”
Chavez echoes Dewey, explaining, “That’s the biggie—how the sales process is going to transform from knocking on the door and sitting down with somebody for a couple of hours to doing it electronically in some manner.”
He also notes attending a presentation through an entrepreneurial program he participated in, and now mentors, at Stanford by the founder of reputation.com, discussing the growing access to people’s personal data—such as “what kind of beer you drink, what kind of car you drive, you know, what kind of milk you buy, all those sorts of things, and apparently that’s getting very, very detailed and in-depth. And my understanding is you can buy that kind of data in the marketplace now, and that’s going to get ever more skin, I think.” Another area Chavez observes gaining attention—even if it’s still in the theoretical stages—is the potential use of robots and what that could mean for manual jobs.
Green, as well, is paying close attention to the possibilities of robotics and what it could mean for System Pavers. “I think robotics are going to happen. There’s a company in Australia that are about to launch their first prototype into the market. I’ve seen videos, and this is a brick-laying machine where, just to give you a little bit of a description, essentially this machine can brick-lay the building of a house,” he says. “You plug in AutoCad plans of the layout of the house, you might have bricks in different colors and all different textures, finishes and all of that is included in the plan. The software reads all of that, you load in the palettes of material, then it’s got this long arm like a crane and the machine takes bricks off of the palettes as needed for installation, and this machine actually puts down by brick by brick by brick. Well that same machine, if you can build that vertically you can certainly, in my world, do paving stones laid flat, and your AutoCad drawings could have all kinds of designs and patterns and features and all of that built-in.
“If you’re adopting the technology or leading with technology, and you’re moving fast, this is great for saving you costs, saving you time, saving you money, creating a better customer journey and creating all new kinds of brands,” Green continues. “If you’re not, you’re going to get killed fast. It’s going to get ugly—it’s going to get really ugly. I think that’s really the wake-up call for remodelers and design/build firm folks. I think where you have originality and innovation you stand out, and for me that’s always been the thing that drives business.” QR