etitive ligence Getting some respect

By Carla Waldemar

T ET'S get one thing straight right IJat the beginning: Dave Klun is not a laid-back individual (but what man of insight and ambition is?). Think of Dave as a televangelist preaching to remodelersthe Rodney Dangerfi elds of our industry-and he'll give them all the respect they can handle.

Serving remodelers has been his mission for decades, culminating with the launch of The Remodeler's Choice on-he might forget his birthday, but he's memorized this date-August 3, 2006, as a new division of Fullerton Companies. Why? Because he's been there. done that. and knows it's a vastly underserved market with its own unique needs. And just watch out: Today it's a flourishing Minneapolis, Mn., company, but already there's talk of franchising regionally and nationally. And don't rule out the moon.

A little backstory: Dave began work as a carpenter in 1979, after completing a course in carpentry at a local technical collese. After a few years of pounding nails, he took a job at Scherer Bros., a big-time local lumberyard. Working in sales, he witnessed the frustrations of that niche of customers who were not custom builders. One size fits all didn't set well with their needs, but they had no alternative.

Dave pushed to form (and head) a division which, fueled by late-night pizza and a thesaurus, he named the Remod Squad. He gathered a focus group of seasoned remodelers to learn their special requirements, and then took the business from $2 million to $25 million in l0 years. "But," as he tells the story, "the whole company wasn't behind it and didn't believe in it. The buzzwords 'operational excellence' ended when the sale was made. So," he explains with his hallmark guffaw that could penetrate steel and that naughty-kid grin, "after l9 years and ll months, I left. I didn't wait around for the gold watch."

Short-sighted? Only to those wear- ing corporate blinders. If there were a poster child for out-of-box thinkers, Dave would win the job. But let's back up: When you get right down to it, it was simply common sense. And a common ally, Jeff Howe.

Howe was Fullerton's new c.e.o.the first non-family member to hold that post for the nationwide lumber company in its 125 years, introduced to Dave by a colleague who'd learned of his disillusionment. Says Dave of Howe with evangelical fervor, "The man is brilliant! Another 'outside' thinker! The guy wanted to light up the remodeling industry-so, me and him together -holy crapt"

When a site became available in an ideal inner-city neighborhood of aging mansions, Howe asked, "Ready?"

Dave said, "Um, give me six or eight months?" Howe countered with "Opportunity knocks," so they moved boldly forward, remodeling the spacious lumberyard and transforming its sales floor into a gorgeous showroom, prepared to serve a customer mix representing 857o pros and l5%o property managers.

By now, Dave knew full well what sets these guys apart from your newhome builder, and took on staff (21 to date), product mix, and equipment geared to serve their special needs.

Which are...well, let Dave tell it. "Remodelers do demolition, number one. It's a whole different mentality/ It requires. say. covering up an existing floor and different equipment, like dust masks and floor proteition. Then, they've got to put it all back together, adding the challenge of working in an existing environment.

"Number two, the remodeling business is segmented all across the board. Some work just in the suburbs, while others never get on a freeway. Then there's the difference between adding a family room on a suburban home and working in a vintage inner-city home, where you never know what's behind the wall-'My God! Look what we found!'-which may require immediate and urgent action. And you've got to respond to that-so, we take our accounts and segment them: large, small, specialty, handyman, etc.

"Also, to serve these contractors, you have to think of complementary products. If they're doing beams and headers, have you got the right hanger? Yet, remodelers don't buy a ton of hardware compared with the buying volume of new-home contractors, so you have to balance how you stock oroducts.

"Remodelers require small deliveries"a key difference"so we bought smaller trucks. For a new house, you can unload in the middle of a cornfield at 5 a.m., but not at a customer's home. And you've got to be nimble, maneuver through an alley, or get around a fence. You can't block the driveway or leave material where ir will kill the grass. And when oil from a truck stains someone's driveway, who do they call?" he roars. Consequently, "we recognize that our vehicles require top-notch maintenance.

"Deliveries ahead of schedule are great for builders, but bad for remodelers-so you deliver what they need on a daily basis. In traditional lumberyards, you hear, 'Oh, they always think it's an emergency.' Well, 'emergency' is normal here. Builders can work around it if something's missing, but for remodelers, they need it now. So we also have better alignment with our suppliers to get product quicker. And if we don't have a truck available," Dave has figured in a spurt of genius. "we utilize a courier servicequicker and more nimble, and the cost is not that big a deal."

Another key difference he cites:

"Our drivers need to have customerfocused mindsets, too. The driver is the last person to see the homeowner, so it's absolutely critical that he leaves the homeowner with a sense of caring." A final challenge: "The owners live here, so we're being inspected all night long."

The rewards come in different flavors, too. "The money won't be made in volume-rather, in margins," he explains. "Our customers will pay a little extra. They say that price is important, but service is number one."

Another bonus: loyalty. "They're relationship-driven," he says. "You earn their respect, offer a fair price, and they're not out there shopping."

It takes a different mindset on the part of every employee (some of whom followed Dave from Scherer Bros., as did more than a few customers; others were culled from "banged-up remodelers, a fount of information," Dave rejoices.). "This staff all want to work with remodelers. But you've got to change their way of thinking from that of a traditional yard, not fall back on old ways." ("Flexible and open," a passing employee calls out the motivational team slogan with a grin.)

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Com petitive I ntelligence

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"We're tighter and more cohesive, a relay from sales to operations to drivers. If the baton is dropped, you don't win the race-you don't even compete!" he booms. "The key is, you don't just stop with the sales group. You have to have the whole company on board. The operation needs to be seamless."

Thus, voicemails are updated daily and phone calls returned before dark, along with other user-friendly practices not yet on the radar of most yards. And Remodeler's Choice is all about being proactive. "We don't just wait for the phone to ring. We call them: 'How can we serve you?"'-and then act on it. At first, the yard was closed on Saturdays, like every other yard. But Dave soon heard that that was the only day his customers' customers could drop by the showroom and made a quick switch. Soon a 24ll access system will add to their ease.

The company's forte-indeed, its core mission-is to serve as the only resource a client ever needs. "Today, businesspeople are taking over the remodeling industry, and that's fine," Dave professes, "but they don't know the intricacies. They can't put it all together-so, we can serve as their resource. We'll be rfte choice: That's our vision.

"The traditional yard as we know it is not designed for the remodeling industry. This industry is starting to come into its own. People have got to believe it's not a stepchild. Lumberyards have sold to remodelers ever since the very first house was ever built-but there's never been a business plan specifically for the industry before."

All very well and good, Brother Dave. But how will you get the salvation message out to those in need?

Well, on the seventh day, Dave didn't just say "Good" and take a rest. He stepped up to the pulpit and started marketing. Because the idea was nourished over countless slices of pizza, Remodeler's Choice lifted the pizza pros' delivery method. They sent out a series of eight boxed "slices," each containing one of the company's mission statements. They read like this: Save your energy. Maximize your time. Increase your efficiency. Improve your bottom line. Expand your knowledge; maintain your schedule. Satisfy your customers. And build your business.

Knowing that branding was vital to making an impact, they hired a specialized company, Image Patrol, to devise a memorable logo: red R for remodeler in the center of a circle (Get it? Remodelers are embraced.) surrounded by photos of remodeler "customers" who are black, Hispanic, female and young.

That's no accident; that's the wave of the industry's future. "Diversity," insists Dave, "is an integral part of this. We're in the process of hiring a Spanish speaker" to address the grow- ing workforce in what used to be Swedish Minnesota.

Bottom line; Is it coming together? Says Howe, who's done his homework, "In 2005 for the first time nationally, revenue from remodeling equaled that of new construction at $300 billion. And that was a good year for new homes. Knowing that, in time remodeling will surpass the new-home business. Fullerton is a company that understands niches-we have a very successful cattle feed lot building niche and another in panelizing chain restaurants. so once we define and refine this new model, there's no upside limit. We don't stand out now as much as we will, when the economy turns around. Right now, everyone's competing for the business that's out there. But a gap will [again] occur when the market gets better. We understand the emotions of the remodeler, and we'll be there for them."

According to Dave, "We're seeing gradual increase. Our market penetration is slow but steady-over $5 million today and growing." A sprinter by nature, Dave has learned to train for the long-distance marathon. "We're laying the footings; the foundations will come. Go slow and get it right."

So maybe it'll take a year or two longer to franchise on the moon, but I'm placing bets he'll get there.