So we have a market that encourages remodeling, however hesitant consumers are to spend, and an Internet that is fast becoming a home improvement tool in its own right. This combination has spawned a major rise in online referral services. These companies, such as CalFinder, offer homeowners an online resource on a smorgasbord of home improvement topics and an easy-to-use link to contractors in a given area. You, the contractor, pay to have these homeowners connected to your company, in the form of their contact information.

Working with these Internet leads can be a bit tricky, requiring more work on your part than traditional leads. As Dave Lupberger pointed out in a related post for Qualified Remodeler, an Internet lead will likely fall short, in terms of information provided, when compared with traditional referrals. Unless you work with a service like CalFinder that pre-qualifies every lead, you generally won’t have a personal view of the homeowner, you won’t know how serious they are, you won’t know their budget situation, and you won’t know when they want to start.

What you will have is their contact information, which is something to work with. Homeowners are generally serious about wanting to remodel, but they may be very hesitant, given today’s economy, to jump right in. Therefore Internet leads may require a little work on your part, some more aggressive marketing. Lupberger put it very nicely when he stressed the importance of developing “a good marketing pipeline.”

You note and keep track of homeowners, Internet-lead or not, that have expressed interest in your services in the past. You then be sure to make regular contact (every few months at least) with these prospects, by way of marketing tools like company newsletters, new project notifications, open houses, and more. The idea is to engrain your company’s name and services into the minds of these homeowners, so that when they are ready to remodel, it is your name that will first come to mind, and your phone that will ring.

Of course when you get a homeowner’s contact information, do not simply send them your next quarterly newsletter. Be sure to make contact with them, offer free estimates and start building a professional relationship with them. Online referrals allow you to specify the region or areas which your company services.

You know the neighborhoods and relative income levels of your best past clients. You can use this a priori knowledge, combined with a lead’s contact information, as clues to who your best prospects are likely to be. But in this day and age it is unwise to ignore any lead, especially as personal referrals give way to Internet leads as a major marketing source. Develop your pipeline and work to expand it; these are the benefits of Internet leads and your task at hand.

Online referral services serve a number of purposes. For the contractor, it is essentially a new form of advertising — contractors typically pay to be included on the list. For the homeowner, online services help expedite the contractor-finding process by doing a lot of the legwork. That includes such laborious tasks as:

• License verification
• Background checks
• Referral verification (the service calls references themselves)
• Insurance verification

Many also provide feedback from previous customers and make getting free estimates from these contractors a simple form-filling process.

Add to that the fact that many services are free, and the appeal is not hard to realize. Still, as Remodeling Guy points out, that doesn’t necessarily make online referral services a foolproof option. While the verification services provided are useful, and probably effective in general, it would not be too difficult for a dishonest contractor to get around these obstacles.

That is why the online referral service should not free the homeowner from all research obligations. It is important to remember that many of these services make money off the contractors — a good reason to let some mediocrity slip through the cracks. Now, there are plenty of online services out there; the rise of the online referral service will inevitably spawn even more hungry entrepreneurs to the cause. Therefore, it becomes necessary to effectively research the researcher, for homeowners to spend a few hours looking into the referral services themselves.

So while online referral services are an ever more effective way to reach homeowners and potentially gain some serious business, they are unlikely to be as easy for contractors as paying a fee and reaping the benefits. Well-researched homeowners will still judge by personality, although being on their list (narrowed down by the online service) will certainly help the cause.

In addition, when it comes to researching the same advice applies to contractors looking to advertise within this rising trend. It would be unwise to place your bets with a service that has had a negative reaction around the web.

1. Confidence. Of course the way in which you carry yourself is important. Many homeowners are already tentative about new remodeling projects, so the last thing they want is a contractor is unsure of himself.
2. Knowledge. There’s no need to know everything, but homeowners will have a lot of questions and those contractors who can adequately answer them on the spot will move to the front of the line.
3. References. Any blog similar to this one, but geared toward homeowners, would have references very high on a list of 10 things to look for in a contractor…and for good reason. In an age of high competitiveness as we have now, getting some sense of a contractor’s past performance is key.
4. History. That leads us to history. If you had a choice between the new kid and the contractor who’d been in the business for 30 years, who would you choose? This is not meant to discourage new contractors. By no means, even the youngest remodeling contractors have likely had several years of experience under the tutelage of a tested predecessor; you just may have to sell yourself on other counts. For time-tested remodelers, having a long history shows endurance and commitment.
5. Thinking on your feet. With budgets and time frames often tight in remodeling, a contractor who remains calm and composed under pressure and can address problems accurately as they arise will garner a second look from homeowners.
6. Reasonable Price. Oh yes, and we can’t forget that giant number (no matter how small you write it) that is the price on a bid sheet. Just remember that price is only one of these 10 things homeowners are looking for. Of course you must be cost competitive, but homeowners who have done their research will know better than to rely simply on the bottom line.
7. Honesty and to some extent, transparency, is also a key. Because homeowners cannot know for sure how honest someone’s words are on first meeting, they’ll rely more on feeling. At the same time the best way to convey a sense of honesty is to be honest. This means not getting yourself in over your head by claiming abilities you don’t have or promising time frames you cannot keep. This is how contractors get bad references and lose money.
8. Resources. A tape measure, pencil, and a pretty face do not a good contractor make. Be ready to field questions about tools and manpower to complete the work on time and with quality and professional performance.
9. Organization and Cleanliness. During the interview and bidding process a show of organization will make a positive impression. After the job is underway, maintaining a clean job site will make that impression last and go a long way toward getting your name spread around to other prospective clients.
10. Energy Efficiency. Remodeling in the near future will likely have a heavy focus on energy efficiency. Tax credits and the stimulus package are pushing the green envelope even further. Therefore knowledge of energy efficiency upgrades and even available tax credits for different projects.

Our natural inclination in times like this is to look for ways to cut costs. One way to do this is to target unnecessary or unproductive programs or services. Even though green-related ventures may not yet be your top producers, don’t give them the boot quite yet. Your company can benefit from more eco-friendly practices in more ways than you might imagine.

First of all, if you are looking for ways to cut expenditures, how about recycling and reusing wherever possible? Look for ways to reduce the amount of materials used; in other words, conserve and reuse. Not only can instilling some more eco-friendly practices into your daily routines help your bottom line, but offering green building to your customers may potentially help your business to grow.

There is an emerging trend amongst younger homebuyers that consider green living of the utmost importance to them, and they need a builder who is knowledgeable about and able to accomplish LEED standards.

So, not only can you save money by implementing more eco-friendly practices within your business, but you can tap into a growing market and have the potential to grow your business, recession or not. Sustainability could very well be your best defense against this recession.

They surmised the following reasons for this unexpected behavior.

It is difficult for homeowners to sell their homes.

They realize this, and are looking for improvements that will make their homes more appealing and competitive with other homes on the market.

When unable to sell their homes, some people opt to improve the one they have to better accommodate their family.

If more space is needed, they add an addition, or they try to improve the areas that made them try to sell in the first place.

There are a growing number of homeowners preparing their homes for retirement and their later years.

This trend is called “Aging in Place,” and entails revamping the house to accommodate their changing lives. Whether it is wider doorways, more conveniences or walk-in showers, they are doing their best to plan ahead.

The article also touched briefly on the growing number of homeowners converting to a greener lifestyle. They are looking for ways to make their homes more energy efficient with alternative energy, along with more eco-friendly materials throughout the home.

One point the article didn’t mention is that with the slower construction industry, contractors have more time and more competitive rates. How do you compare?