In 2000, Keanu Reeves (as quarterback “Falco”) and Gene Hackman (as the Coach of the Washington Sentinels) starred in “The Replacements,” a not-so-famous but pretty funny film that came to my mind in preparing my first article focused on the replacement window industry. I don’t mean companies who have some replacement window lines. I mean those manufacturers and dealers who sell and install replacement windows as their core business, often relying on salespeople that sit down in customer living rooms with a “pitch book” in hand.
What has been a sturdy albeit fragmented industry, fraught at times with a few bad players, has been working a real opportunity. The Replacements have grown in business savvy, technological capability and revenues. Obama’s .30/.30 and the pending “cash for caulkers” programs are putting new light on an asset that has been there all along.
The Replacements are the experts at working the broadest available market, i.e. the nearly countless homes/buildings with windows and doors that are ripe for replacement in order to take advantage of the most up-to-date glass and frame materials. Recently, the replacement market has found itself in line to benefit from the country’s drive toward energy efficiency and escape recession all at once.
But, back to the movie. There, “The Replacements” are down-on-their luck football players given an unexpected chance to play in the big leagues because of a players’ strike. The owners’ reaction to the strike was, of course, to hire replacements. The replacements are initially despised by players and fans alike, but they persevere. After much struggle, the featured Washington Sentinels begin to improve, get “professional” (Hackman is a good coach after all) and as is always the case win over their fans with victories.
The colorful replacements grasp their opportunity with heart and humor. In response, the “real” players around the league begin to cross the picket lines to regain their jobs and their positions. Indeed, in the final game of the movie the “real” Dallas players ALL play against the featured Washington Sentinel replacements, but the Sentinels somehow remain successful and Dallas suffers a bitter loss in a thrilling last minute Sentinel victory on national TV.
How deep are the parallels other than the name? I don’t know. I have seen that the replacement window business takes an entrepreneur’s spirit, and the ability to develop understanding and strategy for a really diverse and sometimes boisterous market. If you can do that and bring success to both the challenge of managing a free-wheeling sales force and the need for iron-clad customer service, you’ve got yourself the recipe for some serious wins. The Replacements have done pretty well and continue to gain experience in a market less dependent on the ripple effects from Wall Street. There have been some significant winners in this market and it will be interesting to see if market consolidation is inevitable.
There are certainly plenty of serious legal issues requiring identification and management. The traditional certification and product performance issues’ affect on warranty liability are ever-present and risk is multiplied when installation is within a company’s contractual obligation. In-home sales impose Federal Trade Commission oversight and regulations, which are often matched at the state level. Compliance requires knowledge, training and documentation. At the moment, the Environmental Protection Agency's lead-based paint certification and prescriptive isolation practices, pertaining to any home built prior to 1978, are about to take effect. The penalties for violation are draconian.
To these, I should add the industry’s tendency to struggle with communication of the pricing benefits of dealing in a direct from manufacturer sales and distribution channel. At the same time, The Replacements have a unique opportunity for straightforward communication of company assurances and disclaimers direct to consumer that the law will respect when handled properly.
It’s simply a fact of life that as The Replacements show repeat victories and take a larger segment of current sales, the press of these legal issues will become more immediate and the need for identification and management of them tending toward critical. But, let’s back up for a second: Here’s to an evolving American market which has proven remarkably resilient. The Replacements becoming mainstream, well look at that.