Small Manufacturer Sees Installed Sales as Key to Survival
Window installation issues often create problems for manufacturers and distributors. Yet, a growing number also appear to be looking at installation as as an opportunity, particularly in a market where consolidation has increased competitive pressures. Celebrating its 30th anniversary this year, Air Chek Window Depot, a small replacement window manufacturer in Clifton, NJ, added installation services and started going direct to homeowners about 10 years ago. In this interview with Window & Door, Air Chek's KeithOakley discusses some of his firm's experience in the field.
A Little History
Window & Door: We'd like to find out more about Air Chek's installation business, but first could you tell us a little about the company's history?
Keith Oakley: The company started in 1971. We were the first vinyl window manufacturer in New Jersey. We were started by John Mordenti, who still owns it. He was in the window business for a number of years, and like a lot of people, decided he wanted to start his own business. He was also a partner in Vinyl Building Products, so they had an extrusion company. It made sense for them to have a window manufacturer. Before that, we had been making aluminum windows. At that point, vinyl was still brand new. We had just heard about it from Europe, and that's where everything came from. They decided to start here. It seemed like something that would take off and it sure as heck did. It took awhile to get people to buy it though. It was a new product that people didn't know about. It was called plastic, so people had a misconception that the windows wouldn't be heavy enough. It's sort of funny, I was involved in AAMA at the time. At that point, we were even debating whether we were going to let them [vinyl manufacturers] in. Since that point, everything's changed.
Keith Oakley in the manufacturer's showroom at its Clifton, NJ, plant. One of
the strategies the firms uses in selling direct to homeowners is getting them to
come to the showroom. Oakley notes that this enables Air Chek to show prospects
that they are truly buying direct from the manufacturer.
W&D: What was the company's market focus when it started?
KO: They started manufacturing, selling all wholesale. For the first 20 years, they were wholesale only. They had a lot of dealers and they had a few larger accounts. They had a lot of these, I call them 'basement companies', with all the phone lines that call and do all that sort of thing, that really kept them going. Basically, they sold just in the New Jersey/New York area. We never went really far and we're still that way.
W&D: Why did Air Chek decide to get involved in installation and direct sales to homeowners?
KO: In this business, a lot of these companies are here today and gone tomorrow-contractors especially. You get stuck with windows and you get stuck with a lot of money problems. Then there were issues of shoddy workmanship. People were coming to us and it wasn't a manufacturing problem, it was an installation problem, which happens a lot. We decided, 'why don't we do this on our own also?', to see how it would work. And it wasn't only the problems. It was a chance to make a little more money too, and really push our products more. Especially our energy-efficient products, because sometimes it's difficult to get builders and dealers to really sell those things.
W&D: I've heard about a number of smaller manufacturers lately that have gone into homeowner-direct sales and installation as a survival tactic in a consolidating market. They can't be competitive with larger companies in manufacturing alone. Was that part of Air Chek's thinking?
KO: I don't think that was part of it, but I know that's what's happening. We've always been independent, and we're probably one of the smallest ones around that's still in business. Many of them are gone, and we know some of the middle-sized companies have been gobbled up by bigger companies. But we've always been a one-owner company and, with the one family, they always try to do their own thing. And we're a local company. I think what happens is that a lot of these companies try to get too big, too fast, and sell all over the country and all over the place, and we don't do that. We concentrate only where we want to be. And that's worked very very well for us.
W&D: What was the biggest challenge in going directly to the homeowner?
KO: Our fear of losing a lot of dealers, and we did lose some...because they think you're in competition with them. And even though you're not selling them at the same price and you're not trying to take work from them, they see you as competition. That was the biggest fear, and that did happen with some. There were some people who were mad. But there are a lot of manufacturers that do it now, maybe not to the extent that we do. They do it on a quiet basis; we do it on a louder basis.
W&D: Are contractors still a good part of your business? If they think you might be competing with them, why do they choose your company's windows over other manufacturers?
KO: We still have contractors. Since then, some of them have come back. I'd say we have more small contractors now than the larger ones that we used to have in the past. We make a more upscale window-we don't make the lower grades you see other companies offer. Another fact about us that a lot of contractors like is that we offer a lot of windows from stock. They can get products right away.
W&D: After selling to the trade for 20 years, was getting your name out there to homeowners a challenge?
KO: People had to know who we were. We'd been here over 30 years, but back then, there weren't many people who knew we were here. There were no humongous signs or anything like that. We immediately went on cable television, newspapers, and everything. We covered the northern and central New Jersey area. It really made a difference. Cable TV is probably the best form of advertising you can have outside of your own referrals. And our Web site also works really well for us now. We were targeting homeowners. Regular single-family, two-family houses built in the '50s or whatever that now need new windows. If you look around, they're on every block in New Jersey.
W&D: What kind of marketing message did you develop?
KO: There's always a fight between the manufacturer and the installer, the installer and the manufacturer; everybody goes back and forth. This way we cover everything. What we did was start one-stop shopping here. Which meant you came here, your windows were made here, our own people put them in, and our own people serviced them. That's very appealing to customers. Also important, what we did back then, and what we still do today is we have a price list-there's another one for the contractors too-but we have [the price lists] here, they're right in our showroom, you can even pick them up on the Internet. So everyone knows what they'll pay. There's no haggling. There's no 20 percent off. None of the salesmen are on commission. They're all on salary. No one comes in and tells them they have to sell at a certain price if they want to make any money. Even our installation charges are right there in black and white. People love it. And they love telling someone about it. When you buy a car you pay $20,000. Someone else might pay $19,000, and someone else might pay $21,000. Right here, the price of the window is the price of the window, and everybody knows it, whether it's your mother or your brother, your sister, or your uncle. And that's one of the reasons people feel very comfortable recommending us. That's one of the reasons our referrals are fantastic. We have many, many cases, where we say we 'own the street' in different towns, because we've done so many different houses on the street. It's just phenomenal. It took a little longer for the marketing end to get going. But you put an ad in the paper, people read the paper, they start calling you. But we had to get people used to our approach, because people still think they have to haggle. They say 'what's my price?' or 'what can I get it for?' and then say you say 'that is the price.' So, we tell people right up front what the price is. Our position has gotten stronger and stronger every year. People seem to like the way we do it.
W&D: It doesn't sound like a very hard-sell approach.
KO: We don't believe in it. If you noticed what I tell people, there is no obligation. Even for us to come to the house, there's no obligation. That's why I tell people, 'a 20 percent deposit if you want to. You don't have to. I'll leave a contract. You can think about it. That's fine.' That's typical of what happens here. The worst lead we get is a telephone book lead. Because they're just people calling everybody and their mother, getting prices. And you should get other prices. We're not afraid of people getting other prices. As long as you compare apples with apples. Because you'll get 800-number guys where they'll try to get $600 for the same window we're getting $200 for. It's the same window-basically the same window. That's another thing we do with our pricing. A lot of people will tell you $300 a window, whatever, no matter what size. We don't do that. We only charge people for what they have. If you have all small windows, you'll pay less. If you've got all big ones, you'll pay more. If you have some of each, which most houses do-almost every house has a bathroom window or a hall window, which is much smaller than a living room window-you'll pay the right price. And that's what people like too. We do everything we can to make [people]come here. You can tell somebody anything you want. You can send them any information you want...You know, when you go to a house, you bring a little window. I hate doing that. To me, that's very misleading, you don't get the whole picture of anything.
W&D: Are you successful in getting people here?
KO: A lot of them come here. A lot of them. The ones who don't maybe don't because they've been referred by their neighbors, so they've seen our windows. So they already know. And when somebody says, 'you've done so and so's work', you pretty much got a sale. Our closing ratio normally is about 60 percent, which no one believes when I tell them. It's unheard of in this industry. You usually like to get 20 percent. We also know that when we get people to come in here, it's about 85 or 90 percent. We lose very few when they come here and they get a price. Again, I can tell you anything I want. I can tell you I make windows. You know how many people say that and don't? Right now, I know there are three ads in the papers where they say they manufacture and they do not manufacture. They lie. If [homeowners] come here, they see this whole plant. You see this whole building here, three quarters down the street, you see the cars, you see everybody, you know we manufacture. Being honest with people, that's really what it is. It's a new concept.
W&D: Getting people in the showroom must also be useful as far as selling particular options and specialty products. Do you do a lot of upselling?
KO: Yes, we do, and that's where you make a lot of your money. Look in our showroom, you'll see everything. Brass grids, we have diamonds, we have squares, we have Tudors, we can do just about anything. That's why we have a lot of pictures here too. People can see, 'yeah, that's like my house.' We also do a service. You can bring in a picture of your house, or we'll take a picture of your house. We'll take the picture and make a computer composite, a picture, of what it will look like afterward. That's very convincing. People just eat that up. Especially with bows and bays, because they're not sure what that will look like. We'll show them a bow and a bay, and put it in there, with grids and everything. We can actually give them a picture of almost any window, any way they could conceivably want it, with all the pictures in our computer. We try to give them no reason to go anywhere else. We want to get more into specialty products. We're now getting a bending machine for grids and things like that, so we can offer contour grids. The other thing we didn't talk about, which I should is that we do a painting business here. We paint the exterior of the window in any color you want-green, blue, whatever you want. We actually did a peach window for a guy who wanted to match his siding. So we can do that. So our thing is to give people what they can't get at Home Depot, or anywhere else.
W&D: Speaking of Home Depot, what kind of impact have the big boxes had on your business?
KO: They hurt us when they first came out, a little. There's one not 1 mile from here. So they hurt us at first, but their quality is not the same as ours and their knowledge of the product is not good at all, as much as they say it is. The only advantage that they have over us is that they are open almost 24 hours a day, nearly seven days a week, and we're not. We're a factory and we're not open as many hours as they are. We're really only open Monday through Friday and half a day on Saturday.
W&D: Do the ones in this area offer installation services?
KO: They offer installation. They used to do it out of their own stores, but they found problems. So what they do now is have people call an 800 number and they send somebody. And now their installation prices are so [expensive] that their cheap window (which you can buy a lot cheaper than ours) if you have it installed, we end up being much more reasonable than they are, for a much better window. So they've actually helped us. That's the one thing I'll say. Installation's the biggest problem in our industry and all these people who really don't know what they're doing with it are finding out that it's really not that easy and not that fun. We do our own in-house training and I did go to that (AAMA InstallationMasters) course we had with the Northeast Window and Door Association and we haven't gone that far yet, but we're going to try and certify some of our people. I think that's something to look into because we all push our certified products-NFRC and all that, Energy Star-and I think that's the next end of it. I think that's what you're going to find happening as competition increases and more and more people get into installation, that's going to be the next stage. We've always been the first. We were one of the first to be NFRC. We were one of the first to be Energy Star.
W&D: In adding installation services, was it difficult to find good installers?
KO: What we did was find contractors that we'd worked with. We got them to come in and work with us. We wanted to make sure we had the right people, because installation is the biggest thing in this industry. You can even have a low-grade window; if it's installed well, it will perform well. So installation is really the biggest thing. You have a lot of different installation types in this area. You've got a lot of steel casements in this area. You have a lot of wood windows that are out of square because they're in older homes, so you have to know what you're doing. You have to be a lot more than a guy who just puts a screw in. We do all the capping and caulking, so you have to know what you're doing. There are too many guys out there who say they're window installers, and they're really not. They'll say they're a part-time plumber, a part-time electrician, and they're really not. I personally would like to see [window installers] licensed like plumbers or electricians. I don't know if you will ever see that, but I think that's a good idea.
W&D: Does having your own installers mean fewer problems in the field? Do you fewer problems with those windows your people install, compared to those installed by your contractor customers?
KO: Well, we have more, because we're installing more of our windows. I'd say right now we're installing 60 or 70 percent of the windows we make. So with that comes more responsibilities. It's not all a bed of roses. There are problems you have to work with. Anything can happen. Windows break, the guy didn't put it in right, the balance is the wrong balance. Those things do happen, but the important thing is we have a service crew to take care of that.
W&D: What are some of the biggest changes you see in the industry right now?
KO: The biggest changes have been the low-E glass, the warm-edge spacers, and the gas. That's the most significant. Once you have a vinyl window, you can make it a little heavier, but the warm-edge technology and those sort of things are really making windows better. It's a tough sell to get people to do it. That's the biggest problem you have. Getting people to a higher-end window. Sometimes people don't want to spend $10 more. They just see the extra $10 and they don't want to spend it. So you have to educate them.
W&D: Are homeowners becoming more knowledgeable? Do most of your potential customers know, for example, what low-E glass is?
KO: Some of them do and some don't-a lot more now than did before. It seems people love the Internet. It's a great thing. It seems people are going on there and getting their information before they come here. And if they don't, we educate them. People are spending a lot more money on their homes. We're selling a lot more specialty products-bows and bays and casements-now, which we never really did before. So people are spending more money on their homes, because they know they're going to stay there longer and they want to get it right. So they're willing to spend more money.
W&D: Consolidation in the industry, the emergence of larger manufacturers with greater economies of scale, even selling direct to homeowners; have these trends affected your business?
KO: Yes, they have. Honestly, I'd like to see prices a little higher, but the market won't bear it. This is really the worst area. I talk to others in the industry and they laugh at what we get for our windows compared to what they get. But they don't get the volume we're going to get here. They may be getting $300 or $400 a window, but they're only going to sell 10 jobs while I'm going to sell 20 jobs, so we're probably about the same, money-wise. It should probably be more, but here that's what the market will bear. There are other companies out there doing what we're doing. Champion Windows. They sell all retail. They have places all over the East Coast, the Midwest. They've stayed out of this market, because they don't like the New York/New Jersey market. It's funny, a lot of people come in here, and find they have to sell cheaper. They find they don't want to do business here. They're happy in the Midwest, the Southeast. But I think if we tried to get bigger, tried to sell in other parts of the country, we'd run into problems.
W&D: Do you think you'd still be in business if you didn't get involved in direct sales to homeowners?
KO: I don't think so. I really honestly don't. I think we would have sold out to somebody bigger or closed down. I really don't...If you look at the Northeast Window and Door Association, I can point to two or three past presidents whose companies aren't there. That's what happens. We're still here, we're still going. Hopefully, we'll still be here in another 30 years. I don't see why not, doing what we're doing.