Aaron and Harley Magden, co-owners of Window Nation, in Glen Burnie, Md., grew up working for Regency Windows, in Cleveland. Regency was founded by their grandfather, Melvin Magden, and was owned for many years by their father, Mike Magden.
The Magden family sold Regency Windows in 2005 to an investor group, and in 2006 the Magden brothers moved to Maryland and opened Window Nation. Since that time, Window Nation has expanded to four branch locations, including Cleveland. The company recently purchased the assets of Regency Windows, which went out of business in February 2012.
Replacement Contractor: Rumor has it that selling windows is a tough business right now. Any truth to that?
Harley Magden: There's a little truth to that. It's definitely challenging now, for multiple reasons. A mild winter, along with the economy and the election, has repressed demand. We had a similar situation four years ago. People sat back waiting to see who would be elected. In Maryland, a lot of them could lose their jobs one way or the other. But it's slow in all the markets where we are. So it's more the industry than anything else.
RC: Why did you and your brother decide to open Window Nation?
HM: We grew up in the business and knew it well and wanted to take what we learned on the street with my father and grandfather. I'm a college graduate, but I wanted to take window replacement to the next level. We looked at it less as a family business than as entrepreneurs. We started from scratch and set out to build something new.
RC: You must have learned a lot working with your father at Regency. In running your own company, what turned out to be the biggest surprise?
HM: I like to think we were prepared for almost everything. The only thing you can't prepare for is the economy tanking. We opened up in 2006, and two years later the stock market crashed.
RC: Were you having second thoughts about your career choice at that point?
HM: We didn't look at it as discouraging. We looked at it from the standpoint of what we needed to do to make growth, and sales, happen. We knew people needed windows, and we knew they would buy them from somebody, so we set out to be the company that they would buy them from.
RC: What would make those customers buy them from you?
HM: Well, without giving away the secret sauce, we sell a good-quality product at a reasonable price and we make customers happy. We won the REPLACEMENT CONTRACTOR Service Excellence Award because we make them happy. We've won awards from Angie's List and the BBB.
But we also offer a fair price, and selection. We're not pricing ourselves out of the market. And they don't have to go to four places to look at four different kinds of windows. They can buy vinyl, wood, fiberglass, or metal from us.
Branch Location Strategy
RC: You started your operation in Maryland and now have three branches operating in five states. What's key to making a branch operation succeed?
HM: The only thing that will make it succeed is having the right person running it. Take someone working for you for a while who is willing to move. You have to grow with them. If you don't have that right person — someone you trust, who understands the company and its systems — you can have all the leads you need, the best salespeople, it doesn't matter.
RC: How do you monitor what's going on at the branches and how often do you monitor it?
HM: You have to have a good software package, a system that can produce Readers Digest version reports, so you can track things. We use ImproveIt 360. That allows us to keep our eye on the important metrics in each office. We also do video conferencing once a week with all the branches.
RC: How has your marketing changed since you opened Window Nation?
HM: It's been a roller coaster. One reason is the tax credit. All you had to do with the tax credit was say you were selling windows and they'd call.
Our ad costs fell because so many people wanted windows. Of course, today a lot of our marketing — this is no shock — is based on the Internet. Living Social and Groupon are media sources we use on a monthly basis. They weren't even around seven years ago. We were doing none of those.
Rising Lead Costs
RC: Dave Yoho Associates says a survey of its members found that leads — issued appointments — are costing $299. Have your lead costs gone up in the last year or two?
HM: Yes, they're up. We have tried to analyze why. It's not because of the cost of advertising. A lot of our advertising costs have fallen, like with print, for instance. But our actual lead cost has gone up. It's actually because there are fewer buyers out there right now.
RC: You launched a canvassing operation about a year ago, right? How have you done with that?
HM: That's a small part of our marketing. We launched a canvassing operation in Virginia. And we now have one in Ohio and one in Maryland. It's met our expectations. But we don't do shows and events.
RC: How do you make canvassing work?
HM: You have to find the right person to manage the program. It's all about finding and training new people. And it's a tough job. Without an experienced canvass manager, it's very tough to get it started. And with an organization the size of ours, it's not like you can send a few people out and come back with four or five leads. We need a lot of leads.
RC: Are you finding the canvassing field overcrowded? Are people in neighborhoods starting to react negatively?
HM: Yes, definitely in certain areas. We try to avoid them. Places where you knock and people say: Hey, there was somebody here last month canvassing. We feel it's best to canvass around your installs rather than throwing a dart in some area.
RC: What other kinds of marketing have been successful?
HM: In Charlotte we find the customer who is really happy and feature them on a piece of print material. So it's a little more personable. We are trying different things to see what works. We experiment. We advertise in everything from high school sporting events to online, church events, community newsletters ... Everything but home shows.
RC: Does social media generate leads for Window Nation?
HM: It does bring in leads, but those leads take longer to develop. It's more about branding than a call to action. Contests generate activity. We have 4,000 fans on Facebook. Not as many as Hansons, but not bad for a window company.
Why Buy Regency Windows
RC: You recently bought up the assets of Regency Windows, in Cleveland, the company your father and grandfather once owned. Why did you feel that was a smart business move?
HM: Regency had been around for such a long time, and there were assets that had value. I mean, intellectual property and the customer list of 50,000 names. We felt that the purchase of Regency would help us toward our goal of being the No. 1 window company in Cleveland. If we hadn't bought it, someone else would have.
RC: Does your father ever offer you advice, or does he stay out of what you're doing?
HM: Both. He's always there to answer questions. He called me today to tell me he'd gotten something of ours in the mail and he'd also gotten a coupon book with advertisements from all these other window companies.
He'll go through the book and discuss the offers and what we should do. He is as active as we want him to be. We do ask him for advice every now and then, and he's always willing to offer his opinion.