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Tackling the special needs of homeowner associations
Homeowner associations are one of the fastest-growing residential segments in North America. With 8,000 new community associations formed annually and an estimated $35 billion in annual operating revenues, the association-governed community will continue to shape the future of home ownership, and offers excellent margins for the painting contractor who understands how to work with these customers.
How to break in
HOAs need to be approached differently than commercial work and other types of residential jobs.
"It's more labor intensive from a marketing standpoint," says Chet Oshiro, a partner at EmpireWorks Reconstruction and Painting, an Irvine-based firm that works with HOAs in California, Oregon, Nevada and Arizona. "Unlike the multi-family market, where one good contact can get you a large amount of work, the HOA world is much more fragmented."
Joining your local chapter of the Community Associations Institute (CAI) is a great way to break in.
"Join the appropriate industry association in your area, and attend as many industry events as you can," says Debi Palumbo, a San Diego-based Sherwin-Williams account executive who specializes in the HOA segment. "Get involved and consider serving on a committee."
Exhibiting at tradeshows is helpful, she says, especially in your first year or two going after HOA business. "Sponsor the fun events – golf, awards, etc.,"Palumbo says. "You'll see more project managers at these than at the regular luncheons. This is how you get to know the managers and open doors."
Once invited, do your homework and learn as much as you can before you meet, and ask a lot of questions when you do get in the door.
Networking is essential
Once you get involved in your local CAI chapter, Oshiro recommends making friends with non-paint trades – general contractors, landscapers, lighting, pest control, tree care, maintenance, insurance, etc.
"Some vendors are more active than others," he says. "Those are the ones you want to seek out."
Teaming up with other vendors to share marketing costs is a good strategy. For example, buying lunch for 30 community managers is more manageable if you're splitting the cost with other vendors.
"When you are a reliable source, other vendors are happy to partner with you and share contacts," Palumbo says. "Consider partnering with these other vendors and hosting your own events, independent of the industry-sponsored events. This is a great way to market on a much more exclusive level."
She recommends setting up office meet-and-greets or lunch-and-learns to get your foot in the door.
"Get on their schedule and prepare to bring some knowledge," Palumbo says. "They want to be educated, not sold. You have to be respectful of their time – they answer to a lot of people and are spinning a lot of plates."
Pitfalls to avoid
HOA work is not like single-family and multi-family work. "Instead of one point of contact, you can have 200 to 300 clients," Oshiro says. That includes community managers, homeowners and their elected board of directors.
The actual painting requires a different mindset too.
"You need to have production quality painters to achieve the level of efficiency needed to be competitive on these jobs," he says. "Accurate estimates are crucial. Bid too low and you'll lose money. Bid too high and you won't even get a shot at doing the job."
For that reason, EmpireWorks prefers to hire estimators and painters who already have the experience needed.
"It's a close-knit industry where everyone knows each other," Oshiro says. "Your work has to be high quality every time, and the customer can never be wrong."
Know the HOA industry protocol
You also want to have the proper infrastructure to both do the work and answer customer questions on a timely basis. And make sure you know the protocol and follow vendor etiquette.
"Go through the proper channels to get to your goals," Palumbo says.
"Most property management firms do not take kindly to cold calling, and you will usually be stopped by a gatekeeper before getting too far. You will have much more success making appointments when you meet the PMs at an industry event."
Once you've done a good job for one manager, she says, they may be willing to introduce you to their colleagues. "Remember, they have hundreds of vendors who want their attention and business."
Utilize supplier expertise
Finally, don't forget to tap into the resources of your trusted paint supplier. The custodian program and color and design services of Sherwin- Williams are two good examples. You can also lean on their product experience to help you win work and ensure a long-lasting finish that will make the customer happy.
"Sherwin-Williams is a nationwide provider which ensures us a consistent product in every region where we work," Oshiro says. "They have a robust product line from entry-level to the highest quality coatings." He relies on his Sherwin-Williams team to guide him to the right paint products for every HOA budget.
Bottom line: Patience!
Patience is a necessity in this market segment.
"You need to understand the sales cycle of the HOA," Oshiro says. "It can be as short as two to three months, but more than likely it will be 12 to 18 months from RFP to project start."
And, Palumbo says, be prepared to deal with a lot of different personalities.
"HOA boards and the people who volunteer often change," she says. "What they usually want is someone to guide them through the process, and validate their decisions. Be there to help them – don't oversell."