Guest Blog: Being Comfortable with Feeling Uncomfortable

October 14th, 2014 by Editor

If you are not uncomfortable in business, chances are you have settled into the sea of sameness of the industry. This comfort brings a maintenance mode of doing business; you merely grow or decline in parallel with the overall organic industry.

People in this mode who want year over year growth usually resort to an approach of stealing share from other competitors. This leads to a share shift game played by many competitors, which usually brings a similar share breakout but price reductions and profit loss to the market. This creates a lower price position and value platform through the channel, all the way down to the homeowner.

The ultimate form of growth is “demand creation,” where the overall size of the category is made larger for everyone. This is the most difficult, as it requires a huge shift in thinking about what the market could be, therefore creating an intense sense of discomfort.

Demand creation is not initiated by the overall industry, it takes one company to have a more progressive vision and commitment. The company who leads it will be rewarded by their unfair share of the market growth.

According to US Census C-30 study, the overall construction industry is over $330 billion in value, with R&R making up nearly 40 percent ($176 billion), with new construction single family (50 percent) and multifamily (10 percent) rounding out the balance. But for many product categories, their largest incremental sales opportunity lies within the R&R market.

There are approximately 100 million existing homes in the US, with 79 percent of these homes over 20 years old. This means – given replacement and repair rates (which are usually 12-20 years) – that there are 79 million homes that need some level of updating. Because exterior products are very visual and battle the elements, these products are the most likely to replace.

With nearly 80 million homes to repair/remodel, the following categories are examples of segments that have only taken advantage of a small percentage of their overall R&R opportunity. The challenge is finding a new approach to playing bigger and finding incremental growth. The following are sales (and share percentages of the 79 million opportunity) estimates based upon industry conversations.

Entry Doors:               7.5 million units          (8 percent)

Roofing:                      4.5 million roofs          (6 percent)

Attic Re-insulation:     2.5 million attics          (3 percent)

Garage Doors:             1.5 million units          (2 percent)

Decking:                      1.5 million projects      (2 percent)

 

Taking doors as an example, although there are nearly 8 million entry doors sold in R&R (at 1.2 units sold/home), as a percent this would mean we are realizing less than 8 percent of our opportunity. The challenge is finding the path to leverage this gap, and stepping back to say “what if” the industry sold 2 million more entry doors (or 26 percent increase)? This would mean an approximate incremental $800 million for manufacturers, and $3B for dealers. So take it down to your geography, and define what your true share is of your local market opportunity? What would your business look like if you grew over the market by 25 percent?

To drive your grow in the door or window category, consider stepping out of your current comfort zone and ask “how can I think differently about how I sell, position products and look for new customer opportunities?”

Bill Rossiter has over 30 years of experience as a branding and marketing executive in the building materials industry and is CEO of Interrupt, a branding and strategic marketing agency specializing in the building materials and home improvement industries.

Tags: , , , ,

One comment
Leave a comment »

  1. Well said “The ultimate form of growth is demand creation”. A business grows when demand for its products or services rises. Hence creating the true value or demand for your brand elements is quite necessary and this will require stepping out of comfort zone..I completely agree with this thought of Bill……

Leave Comment