Lean Times Create Competition and Opportunity
January 22, 2009
For most people, 2009 could not get here soon enough. Who would have thought one year ago that we’d be in this predicament with the economy? True, there were signs of a slowdown but few people anticipated the September 2008 tsunami that froze the credit markets, turned the Dow Jones into a bouncing ball and shook the financial foundations of this country.
No doubt, 2009 will present some special challenges for our industry as nervousness about the economy continues. But it is the beginning of a new year, and time to engage in that traditional exercise of mapping out plans for your business for the coming months. Since I have a number of battle scars from past recessions, I’d like to share a few observations about surviving in this economy.
Expect Much More Competition
The one thing you can count on when housing starts plunge and remodeling slows is that contractors will flock to insurance restoration. You have probably noticed an uptick in competition from builders who are bidding on any work that will keep their crews busy and their income stream alive. Many of them are undoubtedly inexperienced and therefore likely to present bids that are really low or really high. You should anticipate how you will respond effectively to this new competitive environment.
Continue to Promote Your Expertise
What you, as a professional restoration contractor, must remember is that you are the expert. We tend to lose sight of our special skills and capabilities, especially during times of intense competition. But when a homeowner needs work to be done on his or her most expensive asset, the person they will seek to do that work will be the one who can do the job best.
We all know the qualities that constitute a good restoration contractor but the public does not. Our experience gives us the edge over newcomers to the field, so we must redouble our efforts to let people know that insurance restoration is a specialized field and not one that just anyone with a contractor’s license can jump into. Work through contacts, meetings, direct mail or any other way you can find to let people know why you are different than the Johnny-come-lately builder invading your turf.
Focus on Customer Retention
This is not a time for expansion, but rather for enhancing existing relationships. Don’t cut expenses on anything that helps you maintain your connections with clients. My relationships with agents and adjusters as well as property owner have gotten me through many a tough time. Those people are the source of the referrals for your next job.
Further Develop Your Niche
It’s amazing how much an economic slowdown can improve one’s focus. Take a critical look at your services and strengths of your company. Find a niche that you can serve and work out a plan so that you will own that specialty in 2009.
Do Not Neglect Your Network With Other Restoration Contractors
The network will help you discover new solutions, new products and better ways to handle problems. NIR is founded upon the principle that we as a group are stronger than we could ever be individually. The same is true for other associations. Keep up with how your fellow professionals are dealing with this economic downturn.
No doubt this year will bring all of us plenty of challenges. But these lean times also provide us a great opportunity to refine our services in a way that is not possible when times are booming and there is no time for reflection.
Happy New Year!