Manufacturers and Dealers Soak Up Industry Information
at Fenestration Day™ 2012
by Tara Taffera
No you don’t get any sort of formal credit for attending,
but one thing is for certain: The manufacturers and dealers who attended
Fenestration Day were rewarded with valuable information that will allow
them to become even more successful in their businesses. The event was
held April 12 in San Antonio, Texas, and included an educational track
for manufacturers and dealers as well as a few joint sessions. The individuals
in attendance were an engaged group who shared ideas and asked questions,
which added to the success of the program.
The annual event is sponsored by DWM magazine.
Economist Presents Housing Forecast
David Crowe, chief economist for the National Association of Homebuilders,
served as the keynote speaker with a presentation entitled, “Looking into
Housing Markets’ Crystal Ball.” Taking a look back at 2011, Crowe commented
that there were still many “30-year-olds living in Mom’s basement.”
“Household formation will start again when they move out,” said Crowe.
“They will need a house. Hopefully you will be ready to supply that building
when things come back around,” he said, adding that by the end of 2013
there will be an increase in housing.
“Mortgage rates are very low and may go up just slightly. We are beginning
to see a recovery in employment and that will lead the recovery,” he said.
According to Crowe, the distress in the mortgage market is heavily concentrated.
“In the United States 70 percent of mortgages are seriously delinquent,
but this is only in certain states,” he said. “There is a vast number
of states that have excess inventory.”
Speaking of home prices, Crowe asked, “What is the ratio of price to income?
Affordability remains high.”
He added, “All this information about markets is national, but you have
to remember that markets are local.”
According to Crowe, 101 markets are improving.
“We started this improving markets index to show growth,” he explained.
“They are spread out everywhere. It started out in September of last year
with just 12.”
“2012 will still be the stage setter–the year of getting our act together,”
he said. “2013 will be more robust.”
He added that 2011 was the worst year on record—the worst year since the
“We are starting from a low point, a 17-percent increase this year, which
sounds good but is still low,” he said. “We are still a long way off,
but a 17-percent increase will be the start of a recovery.”
Looking at multi-family housing, Crowe said this is a completely different
story. This segment saw a 55-percent gain last year and “between 2004
and now we have had the same number of homeowners,” said Crowe.
He also talked about remodeling, which he said has been a “bright spot.”
“The tax credits helped buoy the remodeling expenditures. We also had
a phenomenon of people who chose not to move,” said Crowe. “We have had
a reasonable surge due to that phenomenon.”
According to Crowe, the dollar amount of remodeling expenditures is higher
than new homes.
“That has never happened before,” he said.
He also pointed out there will be a long road back to normal for many
“The recovery is occurring in states that have little effect on total
production,” he said. These include, for example, smaller states such
as North Dakota.
During the presentation one attendee asked if the inflation numbers from
the government are real numbers.
“We are seeing spikes in certain building products such as lumber, gypsum,
etc. … This will be a bumpy recovery and building products may be the
worst of it,” said Crowe. “Underlying inflation, I am convinced, will
still be relatively low. If you don’t have strong demand it will be hard
to push up prices.”
Another question was about the Fair Issac Corporation (FICO) score. “At
what point do you see the banks releasing [this] so the people who live
in basements can get credit and move out? Don’t you think that is one
of the main factors that is affecting our market?”
“Yes,” Crowe answered. “When I do my survey of builders they say, ‘I have
a great buyer but they aren’t getting the loans.’ Yes, mortgage rates
are still low but we still have this problem of getting credit.”
Crowe told his audience, “The job of an economist is to make guesses as
to how all this will work out. There will be some modest easing in underwriting.
Also, the real key to the recovery is job recovery. It has to be consistent—convincing
the customer that this is here to stay.”
Get Creative with Financing Options
Jim Plavecsky, owner of Windowtech Sales, spoke to dealers about creative
financing options. He discussed four financing options: cash, same-as-cash,
unsecured loans and secured loans. While three people in the audience
noted they used the same-as-cash options, others said a lot of their business
is based on cash.
Plavecsky said there is a disadvantage to cash. “Could you have sold more
windows if financing was readily available?” he asked. “The advantage
of same-as-cash is it often turns a maybe into a yes. The disadvantage
is the customer may demand a discount in lieu of free money.”
According to Plavecsky, 80 percent of people who use same-as-cash don’t
pay it off during the same-as-cash period and this translates into a loan
with a double-digit interest rate.
“Unsecured loans are loosening up a little bit. The consumer doesn’t have
to put up collateral [for] amounts up to 7,500,” said Plavecsky. “This
rather low credit limit is a disadvantage but the interest rates are decent.”
According to Plavecsky, secured loans can go up to $24,000 for up to 240
“The minimum FICO is 660, which is good as you can get a good amount of
customers at that range,” he said.
Refinancing is the last option.
“Say you do their windows, roof, etc. That is where this would be beneficial,”
“Tell customers they can save their cash and use it for other items. This
will take you about 30 days, as an appraiser will have to come out, etc.,”
said Plavecsky. “This is a great option if you have someone with a decent
He also told his audience, “You have to be creative with how you offer
the options. If you know the value of your product really well and you
sell it well and the customer adds up all those value points that will
make a big difference.”
And he added, “It’s a cool thing if you can integrate your financing and
However, there can also be challenges.
“Financing can squeeze your profit margin,” said Plavecsky. “But that
could be better than not getting the sale at all.”
Another point of advice he shared was to differentiate products.
“If the consumer perceives you have more value you can roll it all in,”
he said. “Tell your finance companies you need instant approvals. Tell
them you want the money funded to the dealer.”
One dealer in the audience asked if using financing will increase sales.
Plavecsky responded that the fact that he asked that question shows that
more dealer education is needed on financing solutions and how it can
help improve their businesses.
Market Data and Survival Tactics
DWM columnist Michael Collins, managing director, building products group,
at Jordan, Knauff and Co., gave two presentations at Fenestration Day.
The first was geared toward manufacturers and detailed the latest merger
and acquisition numbers as well as future projections. His presentation
for dealers focused on meeting challenges head-on and how to survive a
challenging market—good advice for any door and window company.
Regarding mergers and acquisitions for door and window manufacturers,
326 transactions have occurred since 2000, 75 percent of which he characterizes
as strategic and 25 percent financial. The amount of expansions and plant
closures are nearly the same—77 expansions from 2006-2012 and 74 plant
closures in that same time period.
The amount of company closures has slowed considerably since 2008 and
2009, which is good news. Thus far in 2012 only one company was purchased
and one closed.
Door and window dealers are looking for ways to thrive in this current
market and Collins gave them some ideas on how to do just that.
“Be a problem solver, not just a seller of products,” said Collins. “Also,
don’t make your customers wonder about delivery dates, delays, etc.”
He also encouraged companies to stay up-to-date on current and pending
legislation and requirements that can ultimately lead to sales, citing
the $1,500 tax credit as an example.
“Know the lead paint requirements cold,” said Collins. “Don’t fight the
regulations, get out ahead of them. The homeowner will look to you for
assurance that the new rules won’t be a hassle for them.”
He also talked about the decision making responsibilities at respective
door and window retailers and reminded the group to keep in close contact
with the customer.
“Make sure that key decision makers are highly accessible to customers,”
said Collins. “Never make customers feel that you’re hiding behind a bureaucracy.”
The importance of customer feedback cannot be overstated, said Collins.
“Compare your own offerings with that of competitors and study why customers
buy from you instead,” he said. “Ask your customers why they buy from
Companies that know the most about their customers, what they want and
what they think of the company, are those who conduct surveys, according
to Collins. This is key to understanding a company’s place in the market.
Collins also talked to attendees about the importance of hiring exceptional
employees. A company is only as good as its key people and sometimes that
may mean looking to a competitor or a company that has closed.
“Look for managers, manufacturers’ representatives and other sales professionals
that may have been displaced by a company closing or a merger of a company,”
said Collins. “Your competitors will employ this technique even if you
Another key area for dealers is the constant acquisition of new leads.
“Don’t be afraid to ask for referrals,” said Collins. “Make requesting
referrals part of the process of completing a job.”
He also encouraged window companies to take a close look at their own
operations with a critical eye.
“Open your website and look at it from the perspective of a potential
customer,” said Collins. “Look at your showroom in the same way. Is it
helping or hurting?”
Don’t forget that it is the little things that matter, he reminded attendees.
Panel Proves Communication Still Lacking Among Dealers and Manufacturers
It doesn’t happen often that you gather manufacturers and dealers together
and have an open question and answer forum that offers honest feedback
regarding what each group wants from the other. But it did happen at Fenestration
Day in one of the most interesting and informative sessions at the event.
The result was an honest exchange of ideas that ultimately proved that
companies on both sides of the aisle, manufacturers and retailers, still
have some improving to do.
DWM gathered together two dealers: Dan Wolt, president and founder,
Zen Windows, Columbus, Ohio, and Scott Barr, steward, Southwest Exteriors,
in San Antonio, and two manufacturers: Dennis Northcutt, national sales
manager, NT Window in Arlington, Texas, and Mike Loter, executive vice
president of Don Young Co. Inc. in Dallas together to share ideas.
If you weren’t already aware of how competitive the market is, and how
price continues to play a crucial role, Loter offered a reminder.
“One thing we would like to see is less demand for cheaper products,”
he said. “We used to have six competitors in Texas and now we have 30
and they drive the price down.” He added, however, that many companies
do have loyalty to Texas-based manufacturers.
“We can’t always offer the lowest price,” added Loter.
Wolt echoed Loter. “If you want quality service you can’t get the lowest
price,” he said.
During the panel, moderator Tara Taffera, editor and publisher of DWM
magazine, asked participants a variety of questions and one of the questions
to the manufacturers was, “What do the great dealers do well?”
Again, some of the answers came down to dollars. “They present the product
at a fair price—not the lowest price—a fair price,” said Northcutt.
What else do they do well? “The good dealers take time to learn,” said
Loter. “We encourage our dealers to come for training.”
Wolt said the training he receives from his chosen window manufacturer
“I wish dealers had to get together every year for training,” said Wolt.
He told the story of one manufacturer that canceled his training appointment
With another, Wolt said, “In five years I haven’t gotten a phone call
saying ‘I can come train you.’”
Another hot topic during the panel revolved around websites and technology
and how the groups interact using these forums.
“The good dealers have great websites,” said Loter.
Wolt counts himself as one of these good dealers and said if the manufacturer
he works with doesn’t have a great one as well that is a deal-breaker.
“Having a great website is crucial to me doing business with you.” In
fact, he said he had met with a manufacturer who had a great product but
the website was very low quality and “paled in comparison to his” so he
declined to work with that manufacturer.
For Wolt, the manufacturer’s site is crucial as he sends customers there
before he even shows up at the home.
“I tell my customers ahead of time to visit the manufacturer’s site, that
way they are informed before I show up,” he said.
Other panelists agreed that a great website is crucial.
“The website is there to support the dealers,” said Northcutt. “The homeowner
will go to the manufacturer’s website. Some direct them there. Some don’t,
but the better dealers do.”
“We encourage our dealers to link directly to our site,” said Loter. “This
is a great tool if used properly. I don’t think enough dealers direct
As far as other ways to use technology, both Barr and Wolt said all their
order entry is done online.
“We email, we tweet, we Facebook—we communicate in every way,” said Northcutt.
“Technology has helped us reduce mistakes greatly,” added Loter.
“Anyway you can connect to technology you can get us,” said Northcutt.
“Hopefully later in the year we will have an iPad app.”
So while much communication occurs during forums such as this one, it
seems more work on improving communications is still needed. For example,
Wolt said his manufacturers don’t even inform him of new products that
One dealer in the audience shared that he “doesn’t sell on price and doesn’t
lose on price.”
“I buy x windows because they’re made in America and sometimes that is
a tipping point,” he said. “But for a company my size if I don’t have
help from you that hurts me.” As an example, he pointed out that he has
lost sales due to the transferability of warranties.
Could that “help” from manufacturers include sales leads?
Barr pointed out that he gets a few leads from his manufacturers, a point
with which Wolt was interested as he gets none.
So an attendee posted a question to Wolt: “If a manufacturer could deliver
you leads, would you change?”
“If they could provide me with one lead a week, I would jump ship if they
offered a comparable product,” he answered.
“Nothing makes us happier to get a lead and pass it on,” said Loter.
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No reproduction of any type without expressed written permission.