Ray and Ron Melani often use the phrase, “when we were in the truck.” The truck was a pickup, and “in the truck” recalls a period in the life of their business that was pure entrepreneur, them versus the world. In 1983, when they were in their 30s, the Melanis found themselves in Hampton Roads, Va., a market and mindset somewhat removed from their native Pittsburgh. Their father had been involved in the home improvement industry on the financing side, and they knew the business well, having worked as canvassers, installers, or sales reps since their teens. They decided to start a company.
Melani Bros., REPLACEMENT CONTRACTOR's Contractor of the Year, began in the truck. Ray sold, Ron installed. They jointly made window and siding presentations, first as U.S. Energy, then three years later, in 1986, as Melani Bros.
Last year, Melani Bros. installed $18,153,091 worth of sun-rooms, siding, gutter protection, and windows and doors. Sun-rooms made up 59% of sales. Yet, watching the sophisticated marketing operation produce the hundreds of leads a week needed to do that, you'd never believe that barely five years ago Melani Bros. was hobbled, its future by no means assured.
What happened in 2002 was that Ray received a phone call from big-box retailer Lowe's Corp., informing him that Lowe's no longer wanted to be in the sunroom business. Since the Melani Bros.' sell-furnish-install program in Lowe's produced 94% of the company's leads, this presented a problem. Soon enough, the salesforce voted with its feet and disappeared one by one. “We had hit the iceberg,” Ray recalls.
Ray doesn't mind talking about what happened then. Like the truck, the “Lowe's situation” is part of the Melani Bros. story, not the company story reps deliver as part of their presentation but the story for internal consumption. Its theme? How Melani Bros. recovered from a blow that would have spelled doom at many home improvement operations. “You gotta touch the fire,” Ray Melani observes. “I never learned anything from success. Everything I know I learned from failure.”
Rick Menendez, vice president of marketing, remembers getting a call from Ray about eight months after the Lowe's debacle. The company needed his marketing skills — in spite of pouring money into media and moving its Lowe's store displays to other retail locations, Melani Bros.' marketing was producing less than a third of the 44 leads per day that was the norm when the Lowe's store program was functioning.
Menendez, whose career includes running the marketing program of New Pro, in Boston, and working as media manager at Thomas Construction, in St. Louis, was brought in to build a diverse and steadily producing lead program. “We were getting 15 or 16 leads a day,” he recalls. “Sales were not in good shape and profitability was negative.” His solution was to slowly raise the bar on lead production “because we needed to feel we were succeeding at something.” Instead of 44 leads, how about 18? Menendez also wanted to immediately plow $70,000 into a direct-mail program — a marketing tactic that Melani Bros. had tried at one point and moved away from. Knowing the company's numbers, he anticipated resistance. He met none. “They weren't freaking out and they were still willing to take risks,” he says.
MAGIC MOMENTS The Great Lowe's SFI Crash came about, ironically enough, because of Melani Bros. stunning success in selling sunrooms. That's another episode in Melani Bros. mythology. In the days when Ray and Ron shared a truck, a retired Philadelphia mortician who'd bought a siding job from them asked Ray whether the company installed sunrooms. “Of course,” was the unthinking reply. The Melani brothers, who had seen a few sunrooms at trade shows but had never sold or installed one, got on the phone with TEMO, a sunroom manufacturer in suburban Detroit. At TEMO, a receptionist handed the phone to owner Nino Vitale. “They were working out of a house, and I was a little reluctant,” Vitale says. “But their commitment was powerful.”
Step by step, TEMO technicians walked Ron through the installation process over the phone. So in 1991, the Melani brothers were in the sun-room business. Sunrooms quickly became their only business.
“Nino,” Ray recalls, “introduced us to marketing and selling.”