Black & Decker Lowers Profit Forecast
Friday, December 15, 2006
"The slowing housing market also caused Illinois Tool Works Inc., the maker of Duo- fast nail guns, to cut its profit forecast. 'It's spreading, and we don't know how far and how wide it's going to spread,' said Marvin Roffman, president of Roffman Miller Associates in Philadelphia, which manages $390 million, including Black & Decker shares. 'Be prepared for more disappointment from Black & Decker and others' who rely on the housing market."
"'Most disappointing, in our view, is Black & Decker expects their disappointing trends will continue well into 2007,' wrote Michael Rehaut, analyst with JP Morgan."
Labels: Construction News
Housing Market has Contractors Feeling the Crunch
Monday, December 11, 2006
The Worcester Telegram in Massachusetts: "In times of tough housing markets, the remodeling industry has historically seen a boost as homeowners tap into their equity to fix up their properties to sell or meet their changing needs. But after years of double-digit home price appreciation, the market is in the midst of a correction." "Area home prices have dropped more than 4 percent since the first of the year, and Central Massachusetts remodelers say their jobs have slowed down or been scaled back from what they were even a year ago."
"'I've seen everything since the early 1980s,' said William J. Morin, owner of Bill Morin Construction in Northbridge. 'I've been through three recessions. I haven't seen it this bad. I would average almost a call a day, but now I’m not getting a call a week.'"
"Guy A. Webb, executive director of the Central Massachusetts Builders Association, said some homeowners who would pay for remodeling projects with their home equity have probably already used it for other things."
"In his own contracting work, Mr. Webb said, more than half of his customers used the equity in their homes to pay for their projects. 'Tapping into equity is very common,' he said."
"'I think my membership is pretty well-prepared for this,' Mr. Webb said. 'They scaled down their operations already. I assume some let go of some employees. A lot of builders and remodelers… just use subcontractors now. They're just calling them less.'"
"Kenneth R. Gaumond, owner of New Surroundings in Auburn, said the housing market correction has not resulted in more home improvement spending, as it had in the past. 'Spending is down everywhere,' he said. 'People are still more likely to adapt their home to their needs. It's not scaring people away from projects, but they're scaling down their wish list.'"
"During the housing boom, homeowners took advantage of their growing equity, using home equity lines of credit for college expenses and purchases that could be paid off more cheaply than with a credit card's higher interest rate."
"'They're continuing to borrow, but at a slower pace,' said Gus Faucher, director of macroeconomics at Moody's Economy.com. 'Price growth (in homes) has come to a halt. People have been borrowing against their equity. And there is less equity. People are strapped. There's less ability to borrow.'"
"George Yacik, a VP a New Jersey firm that studies the home mortgage market and home equity lending, said the dollar volume of home equity borrowing in the Worcester area is about half of what it was last year. Dropping house prices have an effect, too, he said. 'That certainly plays a role. Their equity is not growing like three to five years ago. People have been tapping their equity all along.'"
"Walter Plew, owner of Gemini Home Improvement in Worcester, said that with the slow market and oversupply of houses, there is evidence they may be doing less. 'Last year and before, with the market up, there was more money available to spend,' he said. 'They've dropped doing the big kitchen and bathroom. For now, they're doing painting.'"
"'The lumberyards, Home Depot, the subcontractors, they all say it's dead. Builders are going into the remodeling business. That was always the golden egg when home sales dropped off. There's a lot more people in the business now,' Mr. Morin said. 'Mr. Morin, who has been in business 21 years, said the volume and scale of his jobs now are less than in previous recessions."
"'In the past, when new construction slowed, home improvement increased,' Mr. Morin said. 'Now, new construction and sales of existing homes are in the gutter. Values are dropping as well. Home improvement is off. People have less disposable income than they had five years ago. I make less money now than I did five years ago.'"
Labels: construction jobs, Construction News, Remodeling Jobs
Negotiations, Influence and Your Business
Law of Reciprocity
People want to repay you for doing something nice. If you give them what they want or something useful, they'll want to pay you back. If you're dealing with a supplier charging more than normal, you may want to ask for a reciprocal payback for the next time you purchase something. Or, if you give a useful calendar as a free gift to your clients they'll respond by referring you to others.
Law of Scarcity
When people cannot have something or find out it is a scarce resource, their interest is peaked. This law works not because people want to get the product or service before it's gone, it works because they realize that if others want it then it must be a good thing. If you go to your supplier because you're out of time or low on a product, the supplier has the upper hand. You have something they need. They can claim that they're running low and can charge you more. Or, if you are very busy because you have multiple jobs, a potential client who really wants your services may be willing to pay more to be made a high priority.
Law of Liking
People will believe in someone they like. They trust friends because friends are like them and feel the same way. When dealing with a potential client, it's important to build a rapport with them. Find something in common and you'll be letting them know that you're more alike than they realize. Suppliers will try to get you to like them and may use another salesmen or manager to be the one you don't like. Car salesmen do this by becoming your friend and then asking their managers for approval on a price - and they already know the answer - but pretend they're doing this because you're best friends.
Law of Authority
People believe in experts. Even if the expert is a famous person, they consider their opinions because they've been elevated based on their talents. If it's good enough for the "expert", it's good enough for them. They think they'll become more like that expert. Your supplier will tell you they have the best product or prices in town - you need to do your research to verify it. Or, if you spend more time with a potential client instead of just tossing out your price, you'll convince them you're the expert and can handle the job better than anyone.
Law of Commitment and Consistency
People want to make a commitment. Once they decide on what they like or believe - they'll stand by that decision. Even if it proves wrong. If a potential client trusts your service, they'll believe in you. One way to get customers to trust and believe in your services is to get them to agree with you. Instead of saying, "Here's how much it will cost," you could say, "You believe in the best quality materials, right? And you believe in making sure the project is done right and not just fast. True? Here's how much you'll need to invest for that level of quality and that level of care." Or, for example, your supplier may lead you to give many yes answers on a number of small questions. If the supplier gets you to agree to these small decisions, it will be easier to close you because you're already in agreement.
Law of Social Proof
People want to conform to the social norm. If you're not sure which product to buy, you'll buy the same product everyone around is buying. People are trained to do what society says. Didn't your parents ask, "If everyone jumped off the bridge, would you jump, too?" Give potential clients a long list of references and testimonials. By letting them know you’re the best person for the job, they'll trust in your ability to make them as happy as you've made others. Or, suppliers may tell you your competition buys from them, so why shop anywhere else? Follow up with your competitors to see if they’re willing to give a testimonial on those suppliers. Once you know the truth, you can use it to persuade suppliers that they need to work with you on terms that will provide a win-win situation for both parties.
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Maintaining Personal Relationships with Clients
Top 7 Tips for Great Customer Service
Top 7 Sales Killers
Source – Cialdini, R. (1998) Influence: The Psychology of Persuasion
Labels: Negotiation, Sales Advice, Small Business Advice
