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The Origin Of The Industry

The father of the remodeling industry was the Tin Man. This hardy individual traveled far and wide selling primarily exterior products; siding, storm windows, roofing, etc. Those not familiar with the Tin Man may rent the movie by the same name. This entertaining and enlightening film features such stars Richard Dreyfus and Danny Divito. The movie portrays business conditions which were prevalent in the 60's and 70's. If you pay attention you will learn some interesting characteristics about the Tin Man and his method of estimating and selling. There are some readers who are now asking themselves "Why study the techniques of the Tin Man knowing that he was a high-pressure salesperson?" Realize that the Tin Man sold with high pressure sales tactics in response to his market, and there are some tactics which the Tin Man used which are worth knowing. Today the Tin Man is almost extinct, not because he was guilty of any wrong doing, but because his market went away. The Tin Man's market was the blue collar worker who is a much smaller part of the population today than twenty-plus years ago. In those days the blue collar worker made up about 85% of the population, today the number is closer to 15%. The Tin Man was far from a failure, in his day he was a highly productive link in the business of the earliest remodeling contractor. The blue collar market traditionally would buy under high pressure sales techniques, today's white collar professionals who make up 85% of the population generally will not buy under high-pressure.

Watching the movie will create an awareness of several areas of business in which the Tin Man far surpassed the skills of today's mainstream contractor. The Tin Man realized that he needed three ingredients to flourish, these three ingredients haven't changed over the years.

1) He required lots of leads. The Tin Man's ambition was not to sell all the work, only those jobs on which he could make a businessman's level of profit. He did not expend much time and energy with those who he felt would not pay his price.

2) He needed a sales system which he could use over and over again to screen those who inquired about his services and otherwise create the efficiencies enabling him to direct his attention only to those who he felt were more likely to buy. Included in this sales system was a financing agreement with a lending institution which allowed him to quote his services and products not only on the basis of price, but most commonly on the basis of monthly payments. The Tin Man realized that it was easier to sell on the basis of monthly payments for a myriad of reasons, among them the fact that if there were competitors involved in a bidding situation any objections about the Tin Man's higher price could be overcome by revealing that the higher price of hundreds or thousands only resulted in a few dollars difference in the monthly payment.

3) He utilized a unit cost system of estimating which allowed him to calculate the cost of the project in the living room on the first call and relate the resulting price of the project to the home owner on the spot, usually in terms of monthly payments. If the customer wanted new siding, the Tin Man simply had to measure the overall dimensions of the house, calculate the number of squares (one square = 100 sq. ft.), and multiply by a dollar amount provided by the contractor on whose behalf he was soliciting business. The factor provided by the contractor included the required Job Cost, Overhead and Profit.

These three ingredients, when properly utilized, allowed the Tin Man the efficiency of selling on a one-call close.

As time passed, remodeling as opposed to moving became more and more popular. Many more products were developed to satisfy the growing demand. Projects had a tendency to become more complicated as a result. At the same time the evolution of the population from blue collar to white collar professional diminished the efficiency of the high pressure sales approach. There had always been more mechanics in the field than there were Tin Men in the sales force and in response to the popularity of remodeling many mechanics were forced into business because of the fact that they produced a good product. The fact that they possessed little, if any, business or sales experience was overlooked because they were able to meet the immediate need for product.

Thus the successor to the Tin Man evolved. This contractor knew the mechanics of production far better than the Tin Man, but hated the business and sales end of the business and neglected these areas as much as possible. This new general contractor looked to familiar territory when it came to estimating costs. Overlooking the availability of unit cost estimating systems in favor of the well used practice of sitting down and making a list of materials which were then priced through the local supplier, guessing at the labor, and consulting with sub-contractors for those unknowns such as plumbing, electrical and other trades. As a result, the one-call close evolved more into a three or four call close which prevails today.

However, there is a major change beginning take place among the ranks of contractors. The computer, when combined with a unit cost system of estimating has proven itself as the newest tool in the contractor’s arsenal. Today’s white collar professional has come to rely on the computer as a major tool at the workplace as well as in the home. The computer is a source of seemingly limitless information on which he has come to rely. When a contractor produces a computer generated proposal he often is instantly looked upon as more professional than other non-computerized competitors. The white collar professional finds computer generated proposals more credible. Recognizing this situation, those contractors who are on the leading edge of technology are now relying on laptop computers to produce proposals in the living room. The laptop computer has revived the one-call close! Reports from contractors about customer response include such responses as; "I never would have believed that the project would cost so much, but if the computer says it does, it must be right" The customer who is looking at a computerized print-out of the items involved in the project has been know to say; "I never would have thought it would cost so much, but I never imagined there were so many items involved." Armed with this new tool contractors report the ability to finalize orders on $50,000.00 projects on the first call.