When it comes to the window replacement business, Portsmouth, N.H., contractor Ted Castonguay believes he's seen it all. “Two-leggers, one-call close, discounts, multiple drops. I feel like I've been on both sides of the fence.”

Three years ago the Portsmouth contractor sold fiberglass windows for $700 plus per opening on sales appointments lasting two to three hours. Today his average per unit retail price for vinyl windows is likely to be in the $300 range and he's in and out of the house in 45 minutes. Yet Castonguay says he closes on 66% of appointments, compared with 22% in the days of $700-plus per opening. Sales at his company last year were up 20%. He credits all that to a business decision he made in 2005, when he became affiliated with Window World. “It's been a paradigm shift,” he says.

Window World is the largest among low-price window replacement retailers, and also, president and CEO Todd Whitworth points out, the pioneer. Starting with a single store in rural North Carolina in 1995, Window World set out to make itself the low-price leader in the replacement market, with an advertised (and trademarked) price of (currently) $189 per installed vinyl window.

Demand was such that founder Leon Whit-worth decided to license the system. Last year, Window World dealers installed 1,092,000 windows; more than any other U.S. window replacement company. This year Whitworth expects to up that by 25%. In three years, he says, the company will be selling 2 million units.

Since 2002, operations such as Clear Choice, Window Depot USA, and Windows by Bob have joined Window World in the low-price arena. All aim to be the low-price leader. All use the low-cost, low-overhead model that made Window World effective.

If you figure that roughly 27.3 million vinyl window replacement units were installed last year in the U.S. — the figure given by the American Architectural Manufacturers Association, a vendor group — then the amount of product sold through all dealers affiliated with low-price companies amounts to about 5% of the market. Five percent may not seem like much, but that's starting from zero. Moreover, that 5% is growing at a time when consumers aren't buying as many windows and many window replacement companies are in revenue retreat.

Last year, for instance, Greg Cassidy, owner of Clear Choice of Gainesville, Ga., says that his sales were up 40%. Pat Moran, who operates Window World dealerships in Pittsburgh and Youngstown, Ohio, saw combined sales climb 52.5% last year. Other low-price dealers report similar double-digit increases. Window World itself has had a 40% compounded growth rate in the last three years.

OLD HABITS Initially, many traditional window replacement companies simply assumed, or hoped, that none of these low-price operations would survive in the market. That they're not only here to stay but are growing is a source of concern or annoyance for many.

Low-price companies such as Window World don't market, sell, or operate like window replacement companies traditionally have. Window World and its brethren freely dispense prices, advertise price, and operate on the slimmest of profit margins, gambling that their reward will be volume. It often is. In doing so, they've created an alternative business model. Proving that they can move product, they've forced a number of window manufacturers to reconsider their strategic route to the future.

Low-price window replacement companies have also changed consumer perceptions of the product and the sales process. For instance, when consumers see vinyl windows advertised at $185 or $189, they balk at paying any company two or three times that much.

They've also changed the way consumers expect to be sold. Where many window replacement companies typically block out a two-and-a-half to three-hour time slot to measure openings and demonstrate their product, Window World, et al., spend an hour or less in the house. Working off a non-negotiable price sheet, they get swiftly to the point — cost — avoiding time-tested multistep sales methodologies that use warm-up, trial closes, etc. Time-starved homeowners wonder why they should buy any other way. The effect on traditional companies — a “slow, steady, growing dynamic,” observes Joe Talmon, vice president of Larmco Windows, in Columbus, Ohio — can be canceled or broken demos and more frequent no-sales.

“I took a call from a customer who said: ‘Your guy was here two and a half hours. We had another guy who was here 30 minutes, tops. Do you think that's a good way to sell windows?'” Talmon recalls. “I said: ‘Well, did you feel like you learned something?'”

Such disruptions to traditional methods of in-home sales aren't confined to Ohio. As the low-price companies have expanded their dealer networks to just about everywhere but the West Coast, traditional window replacement companies find themselves squaring off against the newbies on price, quality, marketing tactics, sales techniques. (See “Would That Be à la Carte?” end of article.)

Some have developed their own arsenal of criticisms to combat low-price competitors at point-of-sale. The most frequently launched barb is that the low-price guys use bait-and-switch advertising to get a foot in the door, then upsell gullible homeowners.

Another complaint is that the low-price companies use “bottom feeder” subcontractors who will install the product in half or a third of the normal time because they're being paid half or a third of market rate. And another: Low-price companies don't stand behind their product because, should there be a problem, they don't make enough profit to be able to afford to service it once it's installed.

And lastly, there is the question they also often raise in homeowners' living rooms: How could anyone sell a window, at retail, and install it, for less than what manufacturers typically charge dealers or distributors on a per-unit basis?

TWILIGHT ZONE These are potent, often persuasive, criticisms. Of course the push-back from low-price dealers is no less fierce. Traditional window replacement companies, they say, charge three times as much for a product that is the same, or at least similar. Traditional players don't include cost in their ads because “who would be foolish enough to do that?” says Window Depot USA founder and president Jim Venable.

Traditional window replacement companies waste consumers' time with lengthy appointments designed to set homeowners up for a whopping big price at the close, then employ a series of discounts designed to create the illusion of a special deal and thus prompt an immediate buying decision. More and more homeowners, they say, see right through it. Traditional replacement companies, say their low-price challengers, are stuck in a sales and marketing time warp, a blue suede twilight zone that will ultimately doom them as more and more consumers become aware of window pricing and as they share their experiences on the Internet.

“I would say,” says Clear Choice co-president Matthew Gardner, who also owns two of the company's dealerships, “they're having a hard time breaking bad habits.”

All this, say executives at the low-price companies and their dealers, is what accounts for their success.