Local contractors find ways to adapt in tough times

Electrician Bud Bandfield took a hefty 30 percent pay cut last year, and has nobody to blame but himself. After all, he’s president of his own Colorado Springs company, BudCo Electric Inc.

“Commercial jobs dried up for me last year,” Bandfield said, explaining one of the reasons for his pay cut.

Over the past two years, Mark Witte, owner of DreamMaker Bath & Kitchen, has laid off two full-time designers and a part-time marketing employee, reduced a full-time office manager to part-time, eliminated two office phone lines and even scoured through his cell phone plan looking for savings.

“You just make sure you don’t have anything extra,” Witte said.

General contractor Kenton Pass, of the company by the same name, says he used to target remodeling jobs of $50,000 to $75,000. Now, he chases jobs in the $5,000 to $10,000 range.

When asked about his occupation, Pass used to say he did high-end remodeling. “Now,” he said, “I say I do any remodeling.”

Over the past couple of years, the recession has slammed Colorado Springs-area contractors, remodelers and other construction-industry members like a hammer upside the head. The tough times triggered pay cuts, layoffs and different ways of doing business, and now are prompting some industry members to adopt new ways of reaching customers — from different forms of advertising to embracing Facebook and other social media.

Construction and remodeling goes in cycles, and there have been other downturns, such as one that grew out of the 2001 recession and Sept. 11 terrorist attacks. But the current slowdown — which industry members say is finally showing signs of easing — has been devastating, some say.

In 2009, home construction, as measured by numbers of single-family building permits, slowed to its lowest level in nearly 20 years, according to the Pikes Peak Regional Building Department. That means less work for electricians, plumbers, drywallers, carpenters and others who work as subcontractors. Suppliers also suffer; when contractors, remodelers and others do less work, they cut back on purchases of construction materials, electrical equipment, light fixtures, kitchen cabinets and the like.

Permits for residential remodeling jobs have increased of late; they were up 27 percent in April compared with the same month last year, Regional Building Department figures show. Yet, many homeowners have opted to scale back the size of those jobs, experts say.

“People are doing more upgrades, but not as many large additions, large renovations, not as many huge, complete kitchens as before,” Pass said.

In addition to cutting pay for himself and his two electricians, Bandfield said he has opted to bid on smaller residential jobs that he didn’t always go after before. As the owner of  a smaller company, Bandfield said, he has the flexibility to strap on his tool belt and tackle a kitchen-lighting upgrade, for example, that the owner of a larger company can’t do.

Bandfield also said he’s had to be more competitive on pricing, although it’s a balancing act. Even if he can’t pay himself, Bandfield said, he still must make sure he’s charging enough so that he can pay his electricians and make his mortgage payments. That’s been tough, in part because everybody’s battling for the same customers.

There’s also been growing competition from what Bandfield calls “trunk slammers” — tradesmen who have been laid off, gone to work on their own and who hunt for jobs around town with their tools in the trunks of their cars. Their prices might be lower, Bandfield said, but such workers might not be licensed, bonded and insured. When homeowners or businesses hire someone, they have to look at more than just price, he said.

In Witte’s efforts to survive the downturn, he has outsourced administrative work where possible, such as his payroll.

And with fewer employees, Witte said he’s had to become more involved in all facets of his company’s work. Before the downturn, Witte said he worked maybe 45 hours a week. Now, depending on how many projects he has, he might work as many as 60 to 70 hours a week.

“I basically am touching every project and helping with the sales, design and (cost) estimating of every project,” Witte said.

The severity of the economic downturn has prompted some industry members to embark on alternative ways to woo customers.

Witte said he stopped most of his regular advertising, instead choosing targeted ads in the Catholic Herald and other small publications.

He and others also say they’re emphasizing so-called “relationship marketing” — getting in touch with existing and past customers and going to places where they can network and literally shake hands with customers.

“It’s better for me to touch base with past clients to remind them we’re still around to take care of any of their remodeling needs, rather than spend hundreds or thousands of dollars to make contact with people I don’t know,” Witte said.

Pass says he’s taking relationship marketing a step further. He’s using a relatively inexpensive Web-based service that allows him to send personalized greeting cards, thank you cards, appointment confirmations and even occasional gifts of brownies to past and current clients. The correspondence — individual cards and letters sent to customers, not mass mailings — can be tailored with his photo, signature or other personal touches, he said.

He said he’s already received calls from clients thanking him for the cards they’ve received, Pass said. His success with the Web-based service has prompted him to abandon print advertising, the purchase of vendor lists and other forms of marketing that he said cost him more than $50,000 last year.

“I was using a shotgun method of trying to buy new customers,” Pass said. “None of that effort went to cultivating my base.”

Jeremy Pierce, owner of J & J Construction in Colorado Springs, has posted examples of his construction work on his company’s Facebook page and has posted videos on his website, which also pop up on YouTube.

It’s not just the economic downturn prompting him to go in a different direction. Tech-savvy customers get their information via their laptops or their new iPads, and they want to know that the contractor or remodeler they’re thinking about hiring has a cool Web presence and not just a static phone book ad, Pierce said.

“You don’t look as professional when you don’t have that Web presence,” he said.

Pierce said he doesn’t know whether social media platforms are helping him win bids, but they are helping to drive customer traffic and at least give him the opportunity to get more work.

Some contractors and remodelers say market conditions are looking brighter, based on an uptick in the number of phone calls they’re receiving and increased opportunities to bid on jobs in the community. But even as the economy improves, Pierce said he and other contractors need to keep embracing Facebook and other forms of modern marketing to keep their businesses in front of customers.

“It’s 2010,” Pierce said. “The game has changed. If you’re not on Facebook, if you’re not on LinkedIn, if you’re not texting, if you’re not e-mailing, if you’re not doing all these things to keep in communication with your customers, you’re going to be left behind.”
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Contact the writer at 636-0228.

REMODELED HOMES TOUR
The Housing and Building Association of Colorado Springs will hold its third annual Remodeled Homes Tour from 10 a.m. to 5 p.m. June 12-13.
The tour gives area residents a chance to see kitchen and bathroom renovations, home additions and other work by area contractors and remodelers at 13 homes in Colorado Springs and the Pikes Peak region.

Fun for a cause
Tickets go on sale May 31 at Safeway stores; the cost is $8 for adults and the tour is free for anyone under 18.
A portion of the proceeds will benefit HBA Cares, the association’s philanthropic arm that provides help to individuals and families in the Pikes Peak region.
For tour information, call the HBA at 592-1800 or go to www .cshba.com.