You might not think the insurance restoration contractor has much in common with Best Buy, you know, the giant chain that sells electronics, appliances and digital devices. But I see some disturbing similarities.

Best Buy is struggling now because of what some business experts call “Showrooming.”  People go into the stores, check out the latest TV or electronic gadgets, decide which model they like best and then order online where they can get a better price.

Best Buy provides the facilities and expertise and the online retailer, which has none of the overhead or costs required to operate a walk-in business, gets the sale. As Walter Loeb recently commented on the Fortune Magazine blog, “Best Buy has become Amazon’s showroom.”

A version of this scenario is playing out in our world. I recently helped with a fairly complex loss in Missouri where the property owner was a do-it-yourselfer. His challenge was to find an agreeable scope that addressed issues of smoke odor and damage. He researched information online and then called in people like me with the expertise to advise him. I wrote up the scope of the job including technical requirements for dealing with smoke and water damage, and helped the property owner settle the claim with the adjuster. Then he proceeded to take over the job himself.

I believe this scenario is becoming more common and is accentuated by the recession. After a fire, flood or similar disaster, a property owner calls a restoration contractor to handle the technical work and write the estimate for restoring the structure. Once the smoke order is removed, the structure is dried, the mold problem handled or any chemical byproducts the disaster caused are neutralized, the property owner then gives the repair work to someone else.    

Like the Best Buy conundrum, we provide the expertise and someone else gets the job. While the number of disasters taking place is about the same as before the recession, the playing field is changing. We’ve always had to contend with an influx of new home builders and remodelers who are lured into insurance restoration when their other jobs disappear. But our arena now includes a new player: the buddy. Unemployed family members, neighbors or friends of the policyholder are becoming one of our biggest challenges to getting a job.

How can the restoration contractor fight back?   

Think about what family, friends and neighbors bring that we don’t – a personal relationship. We must work harder to expand our networks and personal relationships so that we become the trusted source for the whole job, not just the parts that require our specialized expertise.

  • Market directly to the public. You should maintain your relationships with property managers, agents and adjusters but you must expand your network.
  • Reconnect with past customers and ask them for referrals. Collect their testimonials to show others.
  • Go directly to those who have experienced a property loss and let them know your expertise and reputation.
  • Offer classes on ways property owners can winterize or storm-proof their property.
  • Be sure everyone in your company offers exceptional customer service. Remember, your company is judged by the courtesy and responsiveness that every employee provides.

Best Buy is revamping its retail operations in an effort to fight the walk-ins’ exploitation of their services. We should take a lesson from that chain and take a hard look at how we are reaching and serving property owners who have experienced a loss. Looking for new ways to market to the general public will help us compete with Cousin Ralph, who knows a little about construction and could really use some extra work.