The Deal with Dealers
While many of the top manufacturers in the country look to analysts’ reports and economic indicators to gauge demand for this year, window and door dealers and distributors are more often relying on their direct interaction with customers to know how things are going in the market. We touched base with a few former Window & Door Dealers of the Year award winners to get their take on how 2009 will likely play out.
Contributing to the conversation are:
- Joe Sandino, president of Weatherite, Sacramento, Calif., 2006 Dealer of the Year, Focused Excellence in Retail/Showroom
- Patti Freko, director of marketing for Feldco, Chicago, 2007 Dealer of the Year, Overall Excellence, Leadership in the Homeowner Market
- Steve Abramson, president of Pace Windows & Doors, Rochester, N.Y., 2008 Dealer of the Year, Focused Excellence in Community Service
- Tony Shepley, president of Shepley Wood Products, Hyannis, Mass., 2008 Dealer of the Year, Overall Excellence, Leadership in the Professional Market
WD: How do you expect the window and door market to perform in 2009? How much longer will the downturn last?
Sandino: The biggest effect I see is a high level of fear and uncertainty on the part of prospects. The current climate is causing procrastination. Time will certainly ameliorate this condition, and hopefully our new administration will have the common sense to encourage people to see the glass as half full. I believe our marketplace is plenty large to allow those seeking growth ample opportunity to shine and rise above. I do expect 2009 will improve for many as companies aggressively seek solutions to grow. Those companies who lack vision and staying power will go away and be replaced in the same manner as has always occurred in the past.
Freko: We expect 2009 to be a challenging year with minimum growth. We need to maintain a lean workforce and focus on our core products and services and provide exceptional service to our customers.
Shepley: The window and door market will be challenged in 2009. Many homeowners will sit on the sidelines waiting for the market to stabilize. Few want to build or remodel when the headlines tell them that the values are continuing to head south. Spending won't be as fashionable as it has been. The downturn will last until people feel a bottom has been reached. It will find that bottom in 2009.
WD: What's your biggest challenge going to be this year?
Abramson: Probably the economics of the replacement market. We just really don't know the trend. We know new homes, which [Pace Windows & Doors] is not a participant in. But we still don't know the trends of consumers and whether they're feeling good or bad. Consumers don't spend money when they feel bad. When they feel bad, they spend money because they need to fix a window or door. When they feel good, they spend money to beautify their homes.
Freko: Generating leads as well as securing financing for customers in order to make doing business with us as easy as possible.
Shepley: Withstanding the death throes of desperate competitors. People have been doing business that doesn't make sense, giving credit that shouldn't have been given and betting on a market that is in collapse. They're scared and some are going down like drowning swimmers.
Our biggest challenge will be to manage carefully the assets we already have (staff, leads, systems, etc.) to provide the maximum effect while maintaining and controlling costs and frivolous expenditures such as lead sources that do not provide leads within budget or salespersons who are not willing to work consistently and effectively.
WD: How has your company’s strategy changed in the last year or so?
Sandino: This year we diversified by moving back into bathroom remodeling. This component of the business is less seasonal. It doesn’t have the same upside potential as window replacement, but it is steady and helps pay the bills.
Freko: Our strategy has remained the same as always—providing customers with the best value and experience.
WD: Is there any product area or market segment you see growing this year?
Shepley: Replacement will continue to grow [for Shepley Wood Products] as we continue to learn it better. There are many, many houses with worn out windows.
Abramson: There will always be the people who can afford to spend money. So when you think about something like sunrooms, that’s a product that’s definitely a “want” rather than a “need.” People will be spending dollars on things they want, so maybe the “want” product areas are the areas to expand into.
Sandino: In particular, we are focused on triple-pane windows that boast very high energy efficiency. I think conservation is the deepest shade of green, particularly those products that will still be considered excellent years from now.
WD: What will window and door dealers look like on the other side of this downturn? In other words, what type of company is most likely to survive the challenging times?
Freko: Companies that are willing to look at alternate ways of generating revenues rather than staying true to the traditional tried-and-true methods.
Shepley: Smart, well-run companies that know how to market and how to differentiate themselves will survive. Competent specialists will rule.
Sandino: I hope we will see a marketplace where dealers realize that the smart consumers of today will choose those companies that deliver. The internal reality must match the external perception. Certainly, many poorly-organized, improperly-prepared companies will fall by the wayside, leaving more for fewer dealers. I hope that it is more difficult in the future to be a home improvement company. Manufacturers will likely learn that marginal accounts may produce volume, but in the end default on payment, resulting in a loss. If so, they will look more closely at commitment and capacity, in addition to credit.
Abramson: The leanest, with probably the best systems, will be the companies that are still around. One has to realize that all companies are good at certain areas. If we can’t get better at the weaker areas, we won’t survive. That includes my own company—we have the same dilemma.