Credit: Photo: courtesy of Capizzi Home Improvement

Last year leads were down at Capizzi Home Improvement, in Cotuit, Mass., as was the average sale. So owner Tom Capizzi initiated two programs. One offers customers a free warranty inspection of past work that the company has done for them, the other a free gutter cleaning.

For either program, customers must agree to receive a written proposal for work, with no obligation to buy.

Though the gutter cleaning promotion ultimately brought in an additional $900,000 worth of business, the jobs generated by these promotions were small, such as installing gutter protection. “In a slowing economy,” Capizzi says, ”your average ticket goes down and your average commission goes down” — which is not something salespeople like.

HARD FACTS Many home improvement companies selling big-ticket items such as sunrooms have diversified into products that retail for a third to a quarter as much. That means salespeople must develop product knowledge and run more leads for less money.

Michael Cohen, president of Trinity Consulting, in Cumming, Ga., says that owners shouldn't be afraid of telling salespeople that they may have to work harder — run more leads for smaller commissions — and why. He suggests that owners of companies with smaller-ticket sales, or fewer leads, discuss it directly. “Have a company meeting,” Cohen recommends, “and say: This is what we're seeing. What are you seeing?” Then get input from employees about how they can increase sales and help cut costs.

That's exactly what Capizzi did. He held a meeting with his entire staff and presented charts correlating business cycles, housing starts, and home improvement sales, explaining what was going on in the market, and why. “The first thing to do is to educate them on the facts and realities of our current situation,” he says.

UPSIDE OF SMALL Smaller tickets can have an upside for salespeople. “You can make more money than the guys selling big-ticket items if you do it the right way,” sales consultant Rodney Webb says. “Show them the numbers.” Webb says closing percentage should be higher, turns should be greater, credit rejects fewer, and cash sales more plentiful on smaller tickets.

“If you sell four big-ticket items a month at an average of $20,000, if you're lucky, you might make $7,000 or $8,000. Say I sell three smaller deals a week at $8,000. That's $2,400 in commissions. So in a month I made $1,600 more in commissions.”