The Game Plan

Manufacturers and dealers discuss product mix, sales strategies, and investment opportunities

The biggest regional differences are in the options that people want, not the growth pattern,” says Joe Guarino, president of Sunrise Windows. “Wood grains are strong in the Midwest; Texas and New England like white windows; and glass packages vary by geography, either to keep heat in, or keep cold out. And almost everyone wants narrow profiles that maximize window space.”

“All regions are up, and we haven’t seen that in seven to nine years,” says Tyson Schwartz, vice president of sales and marketing at Soft-Lite LLC. “We expect aggressive growth in 2014, and we’re gearing up our factory … and looking to push further West and South.”

Market growth expectations, coupled with homeowners’ apparent willingness to consider factors beyond price, are resulting in opportunities for manufacturers and dealers to sell value-added products at higher price points, they say.

“In 2013, we saw an acceleration in consumers’ willingness to invest back into their homes, as well as a shift towards value, [and that] provides many growth opportunities for us in 2014,” says Mark Savan, president of Therma-Tru Doors and Simonton Windows. “Consumers are looking for [a balance] between performance and price in the building products they’re purchasing, rather than just price playing a major role in product decisions.”

Softlite’s Schwartz agrees. “Over the last six to seven years, it has been, ‘how low can you go on price?” he says. “But low price isn’t number one on the list like it used to be for homeowners. Consumers have decided that they might as well be comfortable in their home even though the economy has been on a roller coaster and they are worried [about their] jobs. Dealers are now back to marketing features and benefits,” he says.

“Homeowners are now requesting a higher-end product up front” when they build a new home, reports Ryon Ray, COO of NT Windows Inc., which makes aluminum and vinyl windows. “They are willing to make a small investment up front to install the right product for them.”

Energy-efficient windows and doors continue to be at the top of the consumer’s shopping list.

“We are selling a lot more triple-glass window options and unique spacer systems, not just low-E and argon,” Schwartz says. “We’re looking at all sorts of glass innovations, ways to make our products more energy efficient, and different materials to give our products more strength.”

Consumers also want “better aesthetics, appeal and design,” Ray adds. “They want options that make a window something you look at—not just something you look through.”

“More than anything else, our customers are looking for value-added products to fill holes and gaps in their product lines, expand their market segments and gain a competitive advantage,” says Dave Byers, manager of the window division of L.B. Plastics Inc.

Sales Strategies

To capitalize on these market opportunities, both manufacturers and dealers say they plan to aggressively pursue new business, generate sales leads and educate consumers about the benefits value-added windows and doors provide.

Soft-Lite, which makes vinyl windows and patio doors in addition to selling Therma-Tru fiberglass entry doors, plans to continue partnering with dealers.

“Dealers want partnerships, so they are looking to manufacturers to help them generate sales leads,” says Schwartz. To that end, Soft-Lite has an agreement with smart programmable thermostat maker, Nest, that allows dealers that go through the Soft-Lite training program to include the thermostat in a sale at no extra cost to help them get the order. Similarly, Soft-Lite dealers have the option to include energy efficient cookware, valued at $1,500, as part of the sale, Schwartz says. “Both of those are effective in closing a sale and getting the homeowner to choose more expensive options. We want to do unique things to help dealers generate more leads.”

At Sunrise Windows, execs expect to capitalize on the company’s Madera premium interior trim package, which had a limited rollout in 2013 to dealers doing full frame replacements. In 2014, Sunrise will expand the program to dealers doing pocket replacements, with the full rollout expected by mid-year.

“It’s a real wood interior trim system that allows the dealers to tear the old window out to the studs,” says Guarino. “It helps our dealers differentiate themselves from other dealers and simplifies the way they deal with trim. We’re also developing a new window product for 2014 that gives us the opportunity to raise the bar in both performance and aesthetics…and we are launching a new lead generation program near the start of 2014 that will be an opportunity to engage more with the consumers and get them to the dealers so the dealers can sell.”

NT Windows’ tack is to “control all of our service calls and make [any needed] repairs with our resources,” Ray reports. “We want our dealers selling. If you have a problem, we’re here to fix it.”

At A.W. Hastings & Co., the distributor for Marvin Windows & Doors in the New England area and eastern New York, the strategy is showrooms—some as large as 8,000 square feet—to create an environment where consumers can experience their products. “We invest in showrooms and training people,” says Keenan Burns, COO and executive vice president. “We have the responsibility of creating demand and delivering on the promise. We are selling our windows as an architectural component, not a building product. We want people to make statements with our products.”

Southwest Exteriors in San Antonio is expecting significant growth in 2014 and adding more outbound marketing strategies in anticipation. “We are participating in community events, knocking on doors in neighborhoods where we work and making more outbound calls,” says Scott Barr, steward of the company, which sells Therma-Tru entry doors, Renewal by Anderson patio doors and windows, and siding from James Hardie Corp.

“We are spending a lot of time, money and energy to create sales opportunities,” Barr says. “We have an opportunity to grow market share by being more aggressive in pursuing new business.”

Capital Investments

 

In terms of financial expenditures, the majority of dealers and manufacturers surveyed in the 2014 Industry Pulse said they will spend more in 2014 on capital investments. Among dealers, 45 percent said they would increase capital spending slightly in 2014, with 40 percent reporting spending would stay the same. Forty-seven percent of manufacturers said they would increase capital spending slightly, with 30 percent saying it would stay the same in the coming year.

Larger dealers—those with sales of more than $100 million—are more likely to increase capital spending than smaller companies, according to the survey. Among manufacturers planning to spend more in 2014, company size doesn’t appear to be a factor.

As for what that money will be spent on, both dealers and manufacturers said they would invest in modernizing or increasing the efficiency of their operations, with the next priority for dealers being expanding their market presence with the addition of new locations, and for manufacturers, expanding production capacity. (See Figs. 1 and 2, above).