February, 2008

Second Class No More

By Rick Schumacher

Not that many years ago, remodelers were viewed as second-class customers. And why not? Compared to regular customers (production and custom home builders), their orders were comparatively small and they required a tremendous amount of service. It’s not hard to understand why many pro-dealers built their systems and their businesses around serving the homebuilder.

What this meant was that remodelers often had to force the round peg of their needs into the square hole of a lumberyard’s service capabilities. At best, a lot of work; at worst, it just didn’t happen. That explains why remodelers who would have otherwise worked with a full-service pro yard found themselves wandering the aisles of their local home center.

With the recent extended building boom fast becoming a distant memory, more LBM dealers are taking a fresh look at remodelers. It’s easy to understand why. New home construction is projected to remain soft, while remodeling is strong and continues to grow. In fact, as new housing has dropped dramatically in the past two years, remodeling has continued to hold its own. According to a January 17 report from the Harvard Joint Center for Housing Studies, homeowner remodeling activity was $148.7 billion in the first quarter of 2005; it climbed to $170.1 billion the first quarter of 2006; and climbed still further, to $175.4 billion in the first quarter of 2007—a rate that it varied little through 2007.

As bad as things look now, there’s no doubt that a solid new construction market will return, with some experts predicting a turnaround beginning as early as late 2008. In the meantime, the remodeling industry continues to chug along. Given this reality, a fast growing number of dealers and manufacturers that I talk with during my travels are refocusing their efforts on remodelers.

The first step to becoming a destination dealer for remodelers is to understand them. And the first step toward understanding the folks that comprise this $704.9 billion industry (source: Harvard Joint Center) is to know that they’re not all alike. Just as there are custom builders and production builders, you’ll learn in this month’s cover story that there are specialty firms, design-build remodelers, and full-service, diversified remodelers. If you want to get your share of the remodeling market, you need to know your customers. This article is a solid step forward.

Another key to understanding them is to learn how they perceive their business, and what they expect from their suppliers. We’ve got that covered too, in our new monthly column, Bob Buck & Dave Klun on Selling to Remodelers. “For myself, I felt like an alien life form when I tried to set up a lumber account—which was fairly accurate,” writes longtime remodeler Bob Buck. “Lumberyard sales staff, accustomed to the requirements of new home jobs, hadn’t a clue what to do with my needs as a remodeling contractor.” If you’re serious about selling to remodelers, you can’t afford to miss this monthly column.

At LBM Journal, we’re committed to delivering more of the real-world market intelligence that you need to succeed. By building relationships with other leading magazines—like Qualified Remodeler, which supplied the top remodeler stats in this issue, and by launching programs that you’ve told us you need—like the Certified Green Dealer™ program, we’ll do what it takes to help you navigate the ever-changing market.

Rick Schumacher, Editor & Publisher  Rick@LBMJournal.com