Matt Hullander, owner of Hullco Exteriors, in Chattanooga, Tenn., returned from a meeting in Virginia not long ago where he participated in a roundtable of home improvement company owners sharing ideas about lead generation. “They were all talking about canvassing, shows and events, call centers ... How much marketing costs were,” Hullander says. Those costs were considerable, some as much as 19%. When Hullander explained that his company doesn’t canvass, has no call center, and that being at two local home shows is the extent of his event marketing, “they all looked at me,” he says. “And someone said: I want to be in your shoes.”
Being in a small market — small compared with, say, Atlanta — can be a mixed blessing. If you put enough thought and energy into it, you can be the dominant player. The flip side is that if you develop a reputation for lousy service or inferior work, word quickly spreads.
Hullco, our Replacement Contractor of the Year, dominates the home improvement market in Chattanooga, in part because of its reputation, in part because of what its marketing has made of that reputation. Hullco’s sales today are more than double what they were when Hullander bought the company from his father, Bill Hullander, who founded the business 35 years ago. Brian Brock, the company’s general manager, remembers calling on Hullco as a media rep, trying to get Bill to buy a schedule. The elder Hullander saw no point. At that time the company spent 1% of revenue on marketing, mostly print ads. More than half its business came from referrals or repeat customers. Known as a strong service provider, Hullco could sustain sales growth mostly on word-of-mouth.
No easy street
Before Matt Hullander bought Hullco Exteriors in 2007 — he was 33 at the time — he worked in the warehouse and in the window factory (Hullco made its own vinyl windows from 1984 to 1999), installed windows, and ran leads. There wasn’t much about what Hullco did that he didn’t know. His promotion to president, prior to buying the company, came when he walked into his office one day to find a box of fresh business cards with his new title on them. But, unlike some second-generation owners counting on Easy Street, he planned to change things.“I had an agenda ready,” he says.
The agenda was to expand sales and to make Hullco the market leader. Changes were immediate. He focused the company product offering on windows and siding and ramped up the marketing budget. Within a year Hullander hired a production manager. Soon after that he brought in Brock as Hullco’s marketing manager. He looked into peer groups and now belongs to three of them.
How to Dominate a Market
Traditionally, home improvement companies throw all their marketing dollars into lead generation without much thought of brand. But at Hullco, where a strong brand existed, Hullander says he knew he needed to promote it. In a market with 260,000 people — 400,000 in the metro area — affordable media costs make TV and radio the vehicles of choice. Not that they’re free. Hullco’s marketing costs rose from 1% in 2007 to 5.5% in 2011. During those years, sales climbed from $3 million to $7.7 million (for 2012) while many companies struggled with recession.
“We talk a lot about branding around here,” Hullander says, because branding built the sales. “Most large companies spend 4% to 6%, and most build a brand,” Brock says. Home improvement companies, on the other hand, spend two or three times that much using methods such as canvassing, sweepstakes, and call centers to generate leads.
Many window and siding companies retain maybe 85% to 90% of their sales, whereas at Hullco Exteriors credit rejects and rescission are less than 1%. “We are looking at a different approach,” Brock says. The idea is not to create a commercial and get a response but “to be everywhere to create an equity position in the mind of the consumer.”
Learning From The Best
Hullander may have had an agenda when he bought the company, but he quickly discovered how much he could benefit from the experience of people outside it. “I went into it wanting to learn,” he says. He read books and publications and attended conferences.
Within the peer groups Hullander went from being the fresh-faced newcomer to a seasoned business owner, adept not only at problem-solving but at thinking long-term about growth and profitability. Scott Mosby, owner of Mosby Building Arts, a design/build remodeling company in St. Louis that, like Hullco, belongs to the Big Dogs, a Remodeler 20 group, says that after Hullander joined four years ago, he watched him at the group’s semi-annual gatherings present, step by “well-thought out” step, his plan to dominate Chattanooga. “I think Matt’s strength as an owner is that he has a vision for the company,” says fellow Big Dogs member Ken Moeslein, CEO of Legacy Remodeling, in Pittsburgh. “He knows where he wants to take it. He digs in, rolls up his sleeves, and gets started.”
What also impressed the group was that Hullander wouldn’t act before asking other people for their input. “The thing that distinguishes him is what I would call the ‘power of deliberate intention,’” Mosby says. “That involves planning, clarity, strategy. Some guys have all the answers for everything all the time but it doesn’t seem to work out. Matt seems to not quite have any of the answers but it always works out really well.”
Hullander is quick to credit others for ideas that he has adapted for his own use. For example, after appearing as a guest on Mosby’s remodeling radio show in St. Louis to answer call-in questions, Hullander went to the CBS affiliate in Chattanooga with the idea of doing his own weekly TV program. Mosby says that he was surprised at how much Hullander knew. “I thought: This is an exteriors guy? He understands moisture, flashing, relative humidity, dew point, what goes on inside walls, glass, windows. I wasn’t ready for that.”
Hullander says that, for his part, he saw the strategic marketing value of the program. “What [Mosby] did was establish himself as the expert,” Hullander says. “The majority of his business branding came from his local radio show. I’ve tried to do the same thing here [in Chattanooga].”
However you build it, being a brand means your company’s name is bigger than the products it sells, and it can sell anything, since the opportunity to cross-market to past customers exists. Take sunrooms, for example. Many home improvement companies that once sold sunrooms watched those sales disappear with cheap credit. Seeing an opportunity, Hullco found a supplier, private-labeled its own sunroom brand, and last year generated more than a million dollars in sales, becoming Chattanooga’s largest sunroom dealer. Next on the agenda: bigger projects involving multiple stages and some design work, which also will find their way to Hullco via branding.
Owner vs. Manager Vs. Leader
Bill Hullander remembers days when “I’d be over there until 11 or 12 at night making out schedules, figuring out what jobs we were going to get installed, who was going to run a lead ... I thought I had to do it all. Matt’s got some good people working for him and he has delegated those things to them.”
Hullco grew under Matt Hullander’s ownership not only because he was willing to hire people but because he learned how to hire the right people, motivate them, and make them want to stay. Peers in owner groups remark on the “exceptional team” at Hullco. “We’re more focused on team-building than anything else,” Hullander explains. At many home improvement companies, non-managerial employees aren’t asked for their views on anything, and sales might be the only department in which everyone regularly gets together to talk about goals and objectives. Not so at Hullco. For instance, the company recently sought to hire a marketing manager. Six finalists were called in for additional interviews. “We talked about all of them,” Hullander says, “and then we called in the receptionist and asked her to give us an impression of these six people.” As a result of her input, one of the six was immediately crossed off the list.
—Jim Cory is editor of REPLACEMENT CONTRACTOR.