Jim Ziminski felt disaster looming. He saw it in the company’s
revenue growth, which was nearly flat. He saw it in the declining
sales in his business’s most important distribution channel. He
knew Crane Performance Siding LLC was losing market share.
And he knew homeowners were becoming disenchanted with
vinyl siding, which was practically the only product offered by his
company since its founding in 1977.
“Vinyl siding had somewhat of a bad reputation,” says Ziminski,
who was promoted to president of Crane Performance Siding in
late 2002 to help turn around the struggling, family-owned company. “They didn’t think it looked real.”
It was a hard truth to face, but Ziminski, who previously served
as vice president of sales and marketing for this division of Crane
Plastics Co., knew fighting it wouldn’t help. His company had to
find a new niche — and fast.
“We started looking at our brand and our products and our offerings, and what we realized was for us to position ourselves as the
best vinyl siding company with the best service, lowest cost, best
value was not a realistic proposition,” Ziminski says. “We were
kind of late in the game. Even though we’d been in vinyl a long
time, we hadn’t kept up with the Joneses. What we did realize was
we needed to focus.”
That focus came in the form of a new, higher-end siding product
that appeared promising, but would require sweeping and immediate changes at the company, which employs more than 300 people.
It would require an almost complete turnover of Crane’s sales
team. It would require a drastic reconfiguration of its factory. It
would require new customer service systems and different distribution methods. But, if it worked, the payoff would be sweet.
Ziminski figured he had little to lose.
“We were in a tough position at that time,” he says. “But when
everybody panics and runs around, somebody stays calm, somebody stays focused and somebody takes [market] share because
they had a plan, and they stuck with it.”
Ziminski’s plan was solid-core siding, a sturdier, more attractive
alternative to vinyl siding, which his company began making and
marketing as CraneBoard.
“We ultimately focused on that, and it absolutely rebuilt our company,” he says. “It helped us get customers. It helped us retain customers
that were, perhaps, going to leave. It helped our customers get new
customers because now they had a unique product.”
In Crane’s first year selling CraneBoard, revenue grew more than
20 percent, Ziminski says. Since then, sales have jumped at least 50
percent more.
“We’re between $150 and $200 million with plans to grow beyond
that, even though the market is contracting,” Ziminski says.
Here’s how Ziminski’s bold decision turned around Crane
Performance Siding and how Crane’s renewed success has positioned the company to remake itself into a completely new entity:
Exterior Portfolio by Crane.
Hearing the critics
When Ziminski began assessing Crane’s market position in 2000, he
didn’t like what he saw. So he went to the primary source of his company’s lackluster sales: homeowners.
“We did a lot of focus groups with consumers,” Ziminski says.
“Those can be pretty eye-opening. Sometimes you’re hearing
things you’re not so comfortable with, but you’re hearing things
you need to hear.
“What we heard about vinyl siding was that people didn’t like the
fact that it was shiny or glossy. They didn’t like the seams. They
liked how competitive products like cedar and fiber cement were
straighter and wider. … They absolutely wanted maintenance free,
but they wouldn’t give up good looks to get maintenance free in
many cases. What they really aspired for was a better, high-end
product.”
That gave Ziminski hope. Not only was there still room for Crane
to carve out a slice of the marketplace, but there was a whole new
pie to be had.
“People in tough times, they see problems, they see challenges.
We saw opportunities,” he says. “When we went out and talked to
our dealers and distributors and contractors and builders and,
most importantly, homeowners, we had no doubt they wanted this
product. There was a need for something different.
“The thought was if we don’t do this, a competitor will. So who
better to cannibalize your own product than yourself?”
Get on board or get out
Ziminski wasted no time getting CraneBoard ready to launch.
The first task was convincing employees this was the best —
perhaps only — way to a stable future.
“The first people we sold this product to (were) our people,”
Ziminski says. “We were open and honest and said, ‘We can’t be
the best at vinyl siding. It’s too little, too late. But the market is
telling us that we’re really onto something here [with
CraneBoard], and we can be the best in this category, which is a
higher-end category.’ We essentially sold them on why we were
doing this and why it made sense.”
Getting buy-in from every member of the sales force was particularly vital if this turnaround plan was going to work. So
before Ziminski even called the first sales meeting, he sent everyone the book, “Who Moved My Cheese?” by Spencer Johnson, a
best-seller about dealing with unexpected change.
“I told them, ‘Your cheese is going to get moved,’” Ziminski says.
“‘And it’s going to get moved rapidly, and you really have one of
two choices. One path is you’re going to embrace this change and
be motivated by this change, and you’re going to enjoy it … or you
can fight it. And if you fight it, I would suggest that you probably
want to leave now because we’re going to change with or without
you.’”
In the end, a whopping 70 percent of the sales force either headed out or was shown the exit. The remaining 30 percent got down
to business.
“Our model was to sell the higher end, to sell the uniqueness, sell
the different things,” Ziminski says. “We ended up with a very high-functioning sales group very quickly, and we have not had turnover
of those people. That was the first major makeover.”
The next was manufacturing.
“When it came time to rework our factory and get new equipment, the question was always, ‘Is this what’s best for solid-core
siding, which is our future, or is this best for vinyl siding?’”
Ziminski says. “Each department, be it manufacturing or customer
service or distribution, they all understood what the vision was for
the company: This is what we are; this is what we’re not. And it all
fell into place and became pretty clear.
“Quickly thereafter, the results began to turn. Once we had the
results, people really began to believe.”
Rapid results
By the end of 2006, Crane had introduced six new solid-core siding panels that were wider, straighter and less glossy than vinyl
and 12 decorative trims and corners — just about everything
homeowners had said they wanted in a maintenance-free siding
product.
Sales of these new offerings were leaving Crane’s traditional
vinyl siding in the dust.
“If you look at our sales mix, where it was heavily weighted to
our lowest-cost products in 2000 and 2001, it is equally heavily
weighted to our solid-core products now,” Ziminski says.
In addition, sales-per-employee figures are up roughly 40 to 50
percent, and the company’s throughputs, scrap rates and on-time
delivery have improved significantly since focusing on solid-core.
“Our profitability results increased dramatically,” he says.
It’s a turnaround that essentially saved the company.
“I would question whether we would have been able to sustain
[ourselves] over the last seven years if we just kept doing vinyl siding,” Ziminski says. “That’s not because vinyl’s bad. It’s because we
weren’t going to be able to compete and change with the dynamics of the marketplace the way (other manufacturers) were. If we
were here — and that’s a huge if — we would be very, very different-looking.”
Ziminski says his turnaround strategy starts by being honest with
employees.
“You need to tell them what’s going on and be fair,” Ziminski says.
“Sometimes it’s scary. When the market is shrinking, no one wants
to hear that, but they need to.”
Hearing criticism is also difficult for CEOs. But it’s essential if
you want to grow.
“I think the difference between us and our competitors is we
heard what our customers said, and a lot of people hear what they
want to hear,” Ziminski says. “We wanted to hear they loved vinyl
siding and everything was great. We didn’t hear that. We heard
what their issues were with the product, and we knew solid-core
could solve some of their concerns. We didn’t try to fight it. We didn’t argue with them. We went to what they wanted.”
More change ahead
The next big change for Crane Performance Siding will be just
as monumental as the last — and it’s already well under way.
“There are dynamics in the market that we can’t ignore, so we’re
repositioning ourselves once again,” Ziminski says. “We’re focusing our company on exterior design. People are using a mix of
materials, colors and textures on the exterior of their homes now
to get a more unique look.”
Ziminski is capitalizing on that trend by transitioning his company into a completely new one.
“We’re going to essentially become a new company called
Exterior Portfolio by Crane,” Ziminski says, noting that Crane
Performance Siding will remain in business, but will sell only vinyl
siding products. All exterior design elements, including BellaStone
— a new, realistic-looking stone product introduced this spring by
Crane — as well as the company’s wider, more decorative trims,
will be shifted to the new company.
Delineating the product lines in this way is important for the
future success of both businesses, Ziminski says.
“If you’re going to buy BellaStone, a very expensive, high-end
product, for example, do you want to buy that from a vinyl siding
company? I’m not so sure. It’s a different image,” he says. “We’ve,
again, talked to our customers and talked to the consumers and
gotten great confirmation on the path we’re going.”
Ziminski will spend much of the remainder of 2007 positioning
Crane internally and externally for the changeover to Exterior
Portfolio by Crane. He’ll get some help from Duo Dickinson, a
nationally known architect and contributing editor in home design
for Money Magazine, who has been hired to help with Crane’s
repositioning and marketing of its new exterior design products.
“You have one chance to make a first impression; just one,”
Ziminski says. “When we come out with this stone product, we
have just one chance for someone to try it the first time, so we better make sure we have it right.”
Naturally, Ziminski will also continue to seek input from consumers on how to improve upon his company’s new offerings.
“We’re a big believer in launch and learn,” Ziminski says. “We
want to hear they love it, but we also want to hear what they don’t
like, what’s not right and what could be better. We believe in 100
percent brutal honesty.”
By the start of 2008, Ziminski expects to make the full transition
to Exterior Portfolio by Crane.
“I think [employees] know and accept that we’ve got to keep
changing,” Ziminski says. “The only thing we can count on is we’ve
got to continually evolve because the market is not static.
“We can see what we’ve done in the past, and we are proud of it.
But what we’re going to do in the future is even bigger. We owe it
to our employees and to the Crane family and to the corporation
to reach our full potential. Our full potential is far greater than
what we’re doing today.”
HOW TO REACH: Crane Performance Siding LLC and Exterior Portfolio by Crane, (614) 443-4841,
(800) 366-8472 or www.cranesiding.com or www.exteriorportfolio.com