Dave Klun,
The Remodeler’s Choice:
612.767.5016
dave.klun
www.theremodelerschoice.com
Jeff Howe,
Fullerton Cos.:
651.261.6391
www.fullertonlbr.com
Steve George,
Castle Building &
Remodeling Inc.:
612.789.8509
www.castlebri.com
At your service
by Carla Waldemar
One size does not fit all when it comes to the building supply industry (or lumberyards, as they were called back in the day).
These suppliers to the trade are geared to serve the new-home builders, while remodelers, who spend their money there also, receive scant consideration, some say. As the Rodney Dangerfields of the building industry, they get no respect.
Dave Klun, a former carpenter himself, knew that. He understood full well that remodelers’ needs for goods and services were quite different from those of custom and tract builders and weren’t being met. Met? They weren’t even on the radar. As a salesman for a major Minnesota builders’ supplier he recognized those frustrations and pushed to form (and then head) a new division, dubbed The Remod Squad.
Klun conducted focus groups of seasoned remodelers to learn their special requirements and then drove that new division from $2 million to $25 million in 10 years. “But the whole company wasn’t behind it. The buzzwords ‘operational excellence’ ended when the sale was made,” he recounts. “So, after 19 years and 11 months, I left. I didn’t wait around for the gold watch.”
No time to gaze further than the time clock, anyway, because immediately, in August 2006, he co-founded The Remodeler’s Choice (TRC), dedicated to serving that underrated building niche.
The idea was hatched after a colleague, who knew of Klun’s frustration, put him in touch with Joe Howe, the new CEO of the nationwide Fullerton Cos. and, in its 125 years, the first non-family member to head the organization. He brought with him new ideas.
“Fullerton is a company that understands niches,” Howe explains the partnership with Klun, who holds the post vice president, sales and marketing, of what became the new TRC division of Fullerton. “We have a very successful cattle feedlot building niche and another in panelizing chain restaurants. Remodeling seemed a natural extension.
“In 2005,” Howe continues, “for the first time nationally, revenue from remodeling equaled that of new construction at $300 billion. And that was a good year for new homes. In time, remodeling will surpass the new-home business, so once we define and refine this model, there’s no upside limit.
“Right now,” after the bubble burst, “everyone’s competing for the business that’s out there,” driving traditional yards to court the Dangerfields, too. “But a gap will again occur when the market gets better. We understand the emotions of the remodeler, and we’ll be there for them.”
Klun calls the CEO “another outside the box thinker. The guy wants to light up the remodeling industry, so me and him together
.” Well, watch out, he implies.
The pair pounced on a lumberyard going out of business in the Uptown area of Minneapolis-prime territory for the lucrative remodeling jobs of older Kenwood, Lowry Hill and Edina’s Country Club neighborhoods’ well-heeled residents. They transformed the sales floor into a gorgeous showroom, prepared to serve a customer mix that tips 85 percent pro and 15 percent property managers.
They took on a staff of 15, who had to pass a litmus test. “Do you like and understand remodeling?” they were grilled.
“They had to get away from the traditional mentality,” Klun explains: “Partner with our customers, not just take orders ‘once and done.’ They needed a little coaching, because changing habits is very difficult.
“Here, you’ve got to go to the job site, maybe measure windows; make appointments for the showroom; do research for the customers and their customers-in other words, helping them improve their business is a huge piece of what we do. We’re offering ongoing education to them, too-things like business plan, marketing and sales. We don’t just supply material, we understand the processes behind it. We not only join their associations, we’re active in them and support events.
“We have a tighter and more cohesive relay from sales to operations to deliveries because if the baton is dropped, you don’t win the race-heck, you don’t even compete! The operation needs to be seamless.”
Thus, voicemails are updated daily and phone calls returned before dark, along with other user-friendly practices not customary at most yards, including small and frequent deliveries.
“You can’t drive a tandem truck down most alleys. You’ve got to be more nimble,” Klun says, pointing to one of the unique needs of remodelers.
Others: “Site considerations are not comparable to a home builder’s. They can deliver in the middle of a cornfield at 5 in the morning, even two days early, and nobody cares. But remodelers are working in their customers’ homes; they can’t unload on the driveway or lawn. (We’ll even do hand-unloads when there isn’t the luxury of space). They’ve got to watch their boomboxes and their manners, interfacing with the homeowners onsite. They’ve got to clean up at the end of each day.
“A huge piece of the picture is a lot more communication on deliveries. If a builder needs an item before he can continue, he can go on to another house, or another part of the job. But a remodeler is hung up and left waiting. So we’re even using courier services when they need something in an emergency.
“There’s also a difference between adding a family room in the suburbs and working on a vintage inner-city home, where you never know what’s behind the wall-‘My God! Look at what we found!’-which may require immediate and urgent action.
“Also, to serve these contractors, you have to think of complementary products. If they’re doing beams and headers, have you got the right hanger? So we’ve got to have immediate and frequent deliveries from our vendors, too.”
Who are these customers? Klun breaks his Rolodex down in to A, B, and C clients: A’s are the five to 10 who build $100,000 to $200,000 worth a year; B, the 10 to 20 between $50,000 and $100,000; and C, the 20 to 30 under that amount. (“That’s the total job size,” Klun emphasizes. “We get 12 to 15 percent of a job.”)
Add to that, he sees “a changing trend in the DNA of the remodeling company owner,” who now thinks like a business executive rather than the carpenter of former times. “Two different egos,” as Klun says. “So being a complete resource, with the knowledge and partnering TRC offers them, is all the more valuable.
They’re businessmen, but they don’t know the intricacies. They can’t put it all together, so we can serve as their resource. We’re ready to think differently, be a change agent, be more nimble, react faster. Remodelers can’t wait.”
To reach this market, TRC announced its launch in 2006 with the help of Image Patrol, which devised its logo: a red R for remodeler in the center of a circle:
“Our focus is on you.” The message was delivered, pizza fashion, in a series of eight boxed slices, each containing one of the company’s mission statements, which read like this: Save your energy. Maximize your time. Expand your knowledge. Maintain your schedule, etc. The building sports a mural billboard, and delivery trucks act as rolling billboards, too. Print ads in trade magazines reinforce the message.
A big difference from the old-model yard, as Klun points out: “We’re proactive. We call and check on our customers, not just wait for them to call us.” That’s even more vital in these challenging times, when the whole building industry is imploding. Remodeling jobs are out there, but many more remodelers, and builders-turned-remodelers, are after them. And those jobs are smaller today, Klun finds-which of course impacts his sales. “Used to be, $40,000 additions. Now, it’s a $2,000 bathroom. Homeowners are having trouble getting financing,” he says.
Another new challenge is homeowner-driven. “We’re being asked for multiple quotes on the same job-different options-which the new-home builder doesn’t have to face. He just builds, but remodeling customers want to explore alternatives, and look for value. So we’re working twice as hard.”
So far, so good, according to customer Steve George, general manager, Castle Building & Remodeling Inc., of Minneapolis. “It’s a little bit newer idea, and, while typical yards are starting to set up divisions to address remodelers, this seems to be the next step: to be dedicated” solely. “And they’ve got quality people.”
A Fullerton division serves new-home builders, too. As Howe reports, its sales people are grumbling, “We can’t wait for this recession to be over so we can quit delivering these tiny, little orders.” But, he adds, of the company’s top 30 salespeople, serving 15 facilities, two of the top five work for TRC, where, he points out, the outlook is just the opposite: “We can’t wait for the recession to be over so we can pick up even more of those tiny, little orders” that remodelers turn in.
“It’s a completely different world,” he emphasizes, “and it’s much bigger than people realize. TRC was up over 10 percent last year. It’s growing very well.”
Expansion plans? They’re on the drawing board. “We’re developing this as a model, no question,” says Klun. “I want to go wider: TRC Phoenix, TRC Orlando.”
