Houston, TX (PressExposure) April 10, 2012 -- ATX Global - As sales for houses pick up and show signs of stabilization, the latest reports by Reuters and Associate Press indicate that home improvement companies yet face the same wrinkle as homeowners: foreclosure.
For ATX Global founder Travis Jenkins, a construction company will have to redefine its contractor marketing services if it intends to survive an economy that's riddled by price-sensitive prospects.
An estimated 10 million homes are at risk of foreclosure for this month alone, according to broker Amherst Securities.
Price Sensitivity Re-Examined
Fears of not being able to keep up with mortgages and losing the property to the bank not only affect the homeowner. They're also hurting the economy and the construction industry.
The modern family does not easily take advantage of the price drop in home sales, explained ATX Global. People have come to observe that many of the properties that are sold for half their original price - some even for the price of new cars - need a lot of work.
The average homeowners today are price-sensitive, the company stated. Many would rather forgo renovations and forget about upkeep in favor of giving up the house, renting a place, and finding a job.
Such pattern has created what real estate analysts refer to as "distressed" houses - abandoned units in need of renovation and upkeep.
Old Problems Amplified
Apart from new construction, renovations and upkeep are the two things that keep home improvement service contractors afloat.
With more foreclosures looming ahead though, the ability and willingness of prospective clients to pay for these services are at the very least half-hearted, ATX Global opined.
Jenkins identified three perennial problems which the foreclosure scare amplifies and which new contractor marketing services are called for: advertising costs, profit margins, and clientele.
Huge Overheads for Advertising. Traditional methods require contractors to pay advertising companies upfront costs regardless of the results, he pointed out. If businesses continue to pay for advertising that fails to connect with prospects and fails to generate leads that convert, then the company is sure to be overcome by the present crisis.
Low Profit Margins. Jenkins also observed that a lot of contractors end up selling their services short. The root problem he said was going with the price dive. Targeting hard-up clientele instead of focusing on homeowners who have the ability to pay for services may have a lot to do with the issue, the renegade millionaire disclosed.
Lack of New Clients. Even if people wish to save their home, they might not have the means to, lamented the renegade millionaire. He said that the lack of income sources has directly affected construction businesses greatly that they must find a new way to bring in clients innovatively instead of relying on traditional techniques.
As of press time, ATX Global has hinted that it is currently testing a new marketing approach that could withstand any economy. Initial results are "promising," Travis Jenkins said.