In May 2008, Weather Tight opened a 4,500-square-foot home improvement showroom in Milwaukee featuring window, door, sunroom, roofing, and siding displays in a brand new 25,000-square-foot building that also houses the company's offices and warehouse. The $3.5 million investment could be seen in several ways. The first is that it was just plain nuts. The U.S. economy was five months into the worst recession since the 1930s, and consumers were already reining in their spending. Who would come?
The other way to see it was the way Weather Tight's owners and managers did. Given the level of planning and how hard the company's people had worked to make the project a success, how could it possibly fail?
May 13 arrived as a near-perfect spring day and by 9 a.m. the parking lot surrounding the new building was filling fast. Inside, prospects and salespeople swarmed around displays. Owners Tod Colbert and Todd Schulz seemed both excited and relieved. In 2008, the Idea Center, as the showroom is known ? projected to generate a half-million dollars in revenue ? ended up adding $2.077 million to Weather Tight's nearly $14 million in sales for the year, a big jump over the roughly $9.5 million the company sold and installed in 2007. This year, Schulz says, "if we perform similarly to previous years, we'll be up 7% to 12%." Meaning the company is on track for about $16 million net.
No Growth and Lots of Stress
In a year when "flat is the new growth" and companies with sales reverses in less than double-digits consider themselves blessed, Weather Tight's numbers must seem either miraculous or suspicious. But take note that in 2000 this company did $1.2 million in sales. In that year, Colbert and Schulz were thoroughly burned out and on the brink of failure. "We'd reached the point where we were ready to throw in the towel," Colbert recalls. Lots of stress. No new growth.
Colbert, who founded the company in 1986, was spending a lot of time marketing a software product he had created to make home improvement management more efficient. Meanwhile there was a company to run. A decision was made: The two owners would refocus on their core business ? windows and siding ? and familiarize themselves with what other companies were doing and what consultants could teach them. They went to seminars and joined roundtable groups. "I realized," Colbert says, "there was a lot we had to learn." Soon they were spending a good deal of their time developing systems and processes.
Many is the home improvement company owned by a Type A personality and run in a top-down manner. Weather Tight is no such a company. Managing the operation, and generating ideas for tactical and strategic directions, is a group process. Among other things, that allows this company to change fast when it needs to. In September 2008, for instance, management had wrapped up its marketing and sales projections for the coming year. October came, with banks failing and Wall Street crashing. Secured lending for large-ticket projects grew scarce.
At the time, sunrooms were Weather Tight's second biggest product category. Company managers went back to the drawing board and came up with a new marketing and sales plan for 2009, one that redirected resources into windows. In the months that followed, sunroom sales fell by a million dollars while window sales rose 30% and "made up for our sunroom fall," Schulz says.
Here's another example. When President Obama signed the American Recovery and Reinvestment Act into law on Feb. 19, Weather Tight, like most home improvement companies, had no idea anything like that legislation was coming. Within a day the company's sales and marketing managers sat down to find a way to link tax credits to window sales. "We had to figure out what was eligible and how we could promote it," marketing director Michelle Vincent says. Just as important was trying to come up with a new pricing structure that could accommodate a discount that matched, dollar-for-dollar, the homeowner's tax credit. By mid-March the promotion was launched, and it was "hugely successful," Vincent says.
Division of Labor
Weather Tight has grown quickly in this decade. It added salespeople, marketers, and products. For instance, five years ago, after a lot of research, the company entered the residential roofing market. Roofing became a key product for Weather Tight, at one point generating 18% of sales.
With six products, Weather Tight was better positioned to withstand the downturn than most home improvement companies. Small-ticket items such as gutter protection and attic insulation were in place when secured lending for home improvement projects began to diminish or disappear and bigger tickets like sunrooms became more difficult to sell.
For years the company has generated most of its leads from face-to-face sources such as canvassing, sell-furnish-install programs, shows, and events. Marketing managers were able to hit their lead targets all through the downturn ? except in the dark days of last fall ? so sales held steady.
Though not everything the company has tried has worked, mostly it has met with success, and much of that's due to the fact that two people share the authority to make decisions. It's a big help to be able to separate and manage different parts of the business. "We have separate strengths but the same values," Colbert says.
Colbert, a one-time social worker, is good at systems development. Schulz, a star salesperson and sales manager, is "passionate" about sales. Colbert oversees production and administration. Schulz manages the three sales managers and the salesforce. Both owners play a role in marketing.
But with $14 million in sales, Weather Tight ? the largest home improvement company in Wisconsin ? is past the point when even two people who work well together can come up with all the plans and proposals to drive the business, especially in challenging times. "After 20 years," Schulz observes, "you don't get a lot of original ideas anymore."
So at the end of 2007 Schulz and Colbert formed the "Brain Trust." Vincent remembers that the idea grew out of a need to iron out frequent misunderstandings between marketing and sales. How better to do that than by putting managers in the same room to talk about lead flow, lead quality, and sales goals? The concept grew from there. "We were getting to the point where we had to make a lot of decisions but we didn't have a lot of guidance about how to make those decisions on our own," she says.
The Brain Trust consists of the two co-owners, the three sales managers, and marketing director Vincent. The group meets each Monday and Thursday for two hours, but meetings can and do run twice that long. "The company does better when we involve other key individuals in the decision-making," Schulz observes.