What’s HOT in Roofing, Coffee Conversations LIVE From IRE - Day 1 - PODCAST TRANSCRIPTION

Editor's note: The following is the transcript of an live interview from Coffee Conversations LIVE at IRE 2021. You can read the interview below or listen to the podcast here.

Seth Pietsch:
Thank you, Heidi, for having us. Seth Pietsch with Integrity Insurance and Bonding, and we are also one of the influencers of RoofersCoffeeShop®. So thank you very much.

Heidi Ellsworth:
Yeah. So you are. Out of Portland, Oregon. Absolutely an amazing group. John.

John Gardner:
Well, kudos to RoofersCoffeeShop again, really good. Heidi, great to see you.

Heidi Ellsworth:
Great to see you.

John Gardner:
And gang. Good to see you too. My name is John Gardner and I work with Owens Corning and I'm responsible for all of our training and our education. And I roll up into our contractor team and our contractor network. So good stuff here today and thanks again.

Heidi Ellsworth:
We've been doing a lot of work together-

John Gardner:
We have.

Heidi Ellsworth:
John and I, on accelerators and working with contractors. So I'm excited to talk about that today. So Lauren.

Lauren Lausten:
Yeah, Heidi, thanks. Really excited to be here and appreciate you having us here and as part of RoofersCoffeeShop, I am with Angi. We're a home services marketplace that connects homeowners with pros to get their projects done. So we work with roofing customers directly and with a large network of service pros. So yeah, really excited to be here.

Heidi Ellsworth:
Wow. So, and this was planned. We have some powerhouse folks here who are covering all sides of the industry. So with Angie, everyone knows what's going. I mean, we're going to ask you a little bit about that, Lauren, just what is going on with Angie? Because so many contractors involved Owens Corning who leads away, Integrity Insurance, just really bringing value. We just have put a lot of new stuff on Roofers Coffee Shop from you, Seth, on the top 10 things to be looking for because insurance, it's hard.

Seth Pietsch:
Yeah. It's the best thing to put you to sleep at night. So if you can't sleep, read your insurance policy.

Heidi Ellsworth:
There you go. And then of course, my most favorite person in the world, because I am scared of lawyers until I met Trent and Trent's firm does so much for everyone in the industry. Everyone's been talking about you, Trent. I hope your ears are burning because every-

Trent Cotney:
Hopefully in a good way.

Heidi Ellsworth:
Yeah. All in a good way. All in a good way and I'm not scared of you anymore.

Trent Cotney:
Good. Good.

Heidi Ellsworth:
So we're all good. We're all good. So we're going to get going with what's hot. And so we're going to start out with kind of looking at what's been happening nationally this year. We know some of the biggies, but we may have a couple other things to come through here too. So Lauren, I'm going to start with you. What are some things and trends you're seeing with contractors and what's happening overall that you see in the roofing industry?

Lauren Lausten:
Yeah, I'd say on the contractor side, we're having a really strong year. We have 10% more roofers are active with Angi this year than we had the prior year. So lots of people who are looking to invest in and grow their businesses. On the homeowner side, we're kind of level with where we were in 2020, which was a really big year for us in terms of demand. So we started off super strong, January, February. It's leveled off a little bit the last few months, but across generally, really, really strong demand for roofing projects from both the homeowner and the pro side.

Heidi Ellsworth:
Yeah. It's really interesting when you think, I mean, we think about all the things we're dealing with, with COVID and with materials and pricing, all of that. But on the other side of it, the contractors who have planned ahead and who are diversifying and doing things a little bit different are they're extremely busy.

Lauren Lausten:
Yeah. A lot of our biggest customers are coming to us about geographic expansion, which markets look good, how should they change their product mix? We know metal roofing is growing in a lot of parts of the country. So yeah, a lot's happening.

Heidi Ellsworth:
Yeah. Metal roofing is, it's a lot. So, but John, what are you hearing? You have the top contractors in the industry are your platinum and so many others. What are you hearing?

John Gardner:
We share a lot of them, right? Right.

Heidi Ellsworth:
Yeah. Oh yeah. Yes we do. Thank you.

John Gardner:
Yeah, we share a lot of them. And, when obviously, when COVID, 2020, when COVID came, there was a little bit of a, a pause as we all know, but very quickly, one of the most interesting things is the contractors decided that by and large, if there was going to be a pause in the business, which there was very briefly because we saw a huge spike, it was the energy around trying to become better. And by that, I mean, for some of the tools and resources that Owens Corning has, we saw a substantial spike in the use as well as the engagement within our own sales organization to say, "Hey, can you help me with this?"

Heidi Ellsworth:
Yeah.

John Gardner:
And one of the kind of the key data points that I can share with you is Owens Corning University, we have a variety of course content, and we've got some content, obviously in partnership with RoofersCoffeeShop there. And Trent, we've done some stuff before in the past, too, some really good things. And the numbers that we're seeing with the engagement, prolonged engagement and extended engagement within the contractors themselves is very hot.

Heidi Ellsworth:
Awesome.

John Gardner:
And secondly is we have partnerships with great companies, including Angie, where we provide some of the best resources to grow your business. And those numbers with our third party partners, what we call our business services, has been equally as strong. And then the third phase, which can only happen in today's age, because we're in a place in the roofing industry where contractors are starting to leverage technology to make their business better. And so for the services that Owens Corning offers that have everything to do with technology, I'm talking about CRM, right, and all the things that go around the technology space within our contractors, small, medium, and large, boy, oh boy, they are absolutely taking advantage of at the time, some time to be able to educate themselves on that and introduce it. But the moving past, when COVID kind of passed in 2020 in business just spiked, the continuation of that has just been amazing.

So really thrilled about the roofing industry and our contractors that are saying, "I'm going to invest in my business. I'm going to invest in technology and I'm going to be able to be in a better place when it comes to how's my business operating and how can I better communicate and talk to a potential customer?"

Heidi Ellsworth:
Yes.

John Gardner:
And those are in partnership with folks like Angi and folks like Trent and RoofersCoffeeShop, right, to help our contractors to get there. So huge, lots of moving parts in 2020 into 2021, all good stuff.

Heidi Ellsworth:
Yeah. It's really interesting that you say that, John, because, I mean, even at the very start of COVID, we have seen our numbers of online visitors just continually increase and move up, and it's amazing. It's amazing that we see how much you need that digital input. And so I love that Owens Corning University is so cool. We am on there. We are. I love it. I love it. Seth, what are you seeing on the insurance front?

Seth Pietsch:
Well, yeah, well, to piggyback on the technology piece, we've seen many, many roofing companies and contractors in general just really upgrade their technology and really invest in that. And in our industry, we're very relationship driven and when you have to go out and you have to do an estimate and meet with a customer, that takes a lot of time. So we're actually seeing just huge growth in sales, because everything is done online or virtually now where you're not having that drive time. You're not having that time spent, which is I like customer service. I like all of that. That is awesome. But being from a sales perspective, your sales are driving, are increasing huge because of the time spent. Now you're able to hammer out multiple bids in a day or an hour versus the old fashioned way of, "Okay, I got to drive across town, deal with traffic, deal with issues like that," where now sales are being driven so much online and through virtual estimates and everything else that the sales increase and the spike in revenue, just from that perspective, has been just huge.

Heidi Ellsworth:
Yeah.

Seth Pietsch:
Now that's a good problem to have, but we're running into a problem of being able to fulfill those jobs and those deadlines on projects. So the sales side and we're getting jobs, we're getting things increased, but being able to actually do the jobs. Now that's a different hurdle that we're trying to jump over.

Heidi Ellsworth:
Yeah. Material shortages. It is like everybody, it's there. And it's so funny how you have the snowball effect from COVID and how it's worked its way down. Trent, you have done a lot of webinars on that. What are you seeing?

Trent Cotney:
So it will continue to be an issue, right? I mean, the material shortages, material lead times, I would anticipate, through end of second quarter, we're still going to be dealing with it. But if I'm looking at the upside, there's been a lot of great relationship building that I think has happened with distribution and manufacturers. I know OC, Owens Corning's done a tremendous job and I like this. I like the idea of us flying in formation. So it's been very positive in that regard. There's plenty of fingers to point. I get that. But at the end of the day, one of the things that, if I'm looking for a positive spin on it, is maybe we can start sitting down and figuring out how to work together rather than always pointing fingers at each other.

Heidi Ellsworth:
I like that. And I think as we're kind of talking about the changes since COVID and Zoom, right, we are online all the time. I'm online with all of you all the time. And that has made a difference too, I think, to assess point about time management and then also about building relationships and helping each other out. That's really become important. What do you see? I'm going to kind of go back around this way. Trent, what are you seeing with that COVID? It's funny when I wrote these questions, I said post-COVID, which it's not post-COVID, folks. And I only have my mask off because I am vaccinated. So I don't want anybody to be scared, but we are really kind of in a new stage now with vaccinations, with how we're handling it, with mask mandates and all that kind of stuff. What are you seeing for contractors on that level?

Trent Cotney:
Well, just like with the material issue where you're having to adapt your contracts and your negotiation tactics, we're seeing the same thing with the vaccine. So when the vaccines first came out, no one wanted to mandate them, right? Nobody, across the board. Literally in the last two weeks, we've probably had two dozen roofing contractors call us wanting mandatory vaccination policies.

Heidi Ellsworth:
Wow.

Trent Cotney:
And the reason has nothing to do with politics or what you think about it. It's chewing into their production and they're tired of dealing with it. And the other issue is many of them do federal work. And recently Biden came out with an order saying, you either got to be vaccinated or you've got to wear a mask and get tested periodically. So I think what you're going to see is an increased trend towards mandatory vaccination from employers to employee.

Heidi Ellsworth:
Yeah.

Lauren Lausten:
I'd like if I could jump in on the consumer side. Actually like a month ago, we surveyed a thousand homeowners to find out what they're looking for with their roofing pro. And at that point, still 60% of people said COVID safety precautions were very important. And then when we dove into what precautions people are looking for, the first one, the social distancing, and then the second one was employee vaccination program. So at least from the consumer side, I think if contractors can find a way to give people assurance that there's vaccination, there's safety practices being followed, then that does hold value in the eyes of the homeowner.

Heidi Ellsworth:
Yeah, I think so too. John.

John Gardner:
Yeah. And those are really good data points because if you can match up, if the contractor can match up to exactly what you said, it's like, "This is most important to me, this is the second, this is third." In your own organization, that's important, but I think it's also very important to be able to address that because those homeowners, they're sharing with you what they want to share with the contractor, but they haven't had an opportunity to yet. So those are really important to just male blend into the business. This is no secret, but once COVID did hit, the transformation began with regard to how a homeowner's going to actually contact a contractor. How do they feel comfortable about doing it?

And without even going towards the, once I have a relationship with a homeowner, what's my process there?, it's really even before that. Before that it's, to your point, it's making sure that the homeowner understands that the contractor is sensitive to those and that they're going to communicate those effectively in a way the homeowner can understand and they feel good about that. Right?

Heidi Ellsworth:
Right. Right.

John Gardner:
Number two is, and most importantly is roofing is I think he said, it's a relationship business and it's relationship business, even for Mr. And Mrs. Jones, who are about to hire a contractor because that relationship isn't that they hired that contractor is more than likely an extension of a relationship that they have with their neighbor or their family member or somebody. But what's very different about it is because people are gearing towards understanding what they want to buy, what they don't want to buy, learning via the internet and just doing a search. The intense need from our contractors is to make sure that they can be found because, at the end of the day, you're going to get referral business. You're going to get, and you could feel like, "Wow, I'm doing pretty well," but by and large, almost 100% of homeowners are going to do a reverse lookup on that contractor after their neighbor says, "Hey, I think you should trust this guy or this gal."

And so what I'm getting to here is that that whole piece on the technology side on the backend is so important because all of the dynamics change on a continuous basis in regard to what Google likes, what they don't like, folks like Angi are always looking at to make sure that they're always top, right, and that's why contractors do business with Angi, but contractors themselves, we've seen this in the last 12 to 18 months, is a resurgence in a much more focused interest, making sure that their digital side, that they've taken care of business on that side so that they can connect the dots for the homeowners that are already going to the internet to find them. The younger generation, they get it. In talking about the millennials, they know how to communicate that way, but that's a really strong parallel with what you were talking about and what I'm seeing with our contractors that are making sure they answer those questions plus more.

Heidi Ellsworth:
And it's interesting because we just launched Ask a Roofer this year, which is a homeowner site, just to educate, just research on roofing and different things. And then we have our contractors, to your point, are coming into our club because they get a directory, they get back links, they can get content published, they get to talk to the homeowners on Ask a Roofer. And so I think both of those, I agree 100% and we are continuing to see that same spike.

John Gardner:
Yeah. And I know we're at 15 minutes in, I didn't want to take anybody's time up, but I think this part is really important with regard to contractors with this particular area is the need to, to be able to connect the dots between what homeowners are seeing, right, from what they're looking for and what they're building into their own websites, building their social media is it's important to be able to work with a marketing agency that enables that contractor to see what's going on in his market. And if you're not working with a marketing agency that enables you to be able to virtually see what your competition is doing, what homeowners are doing, what their interest levels are, what they're looking at, how they're behaving, then you're in the wrong agency.

Heidi Ellsworth:
Right.

John Gardner:
Right?

Heidi Ellsworth:
Yes. And we know, I mean, let's talk about this. The accelerator program has Anna Anderson with Art Unlimited and they are amazing. And these are the kind of, having been in roofing for so long, I say all the time, work with people who understand roofing because it's not the easiest thing in the world. And you don't want to spend your time training somebody else on what's going on. So Seth, are you seeing some of those same things with your contractors and folks?

Seth Pietsch:
Yes, I am. Mandating the vaccinations, there's definitely pros and cons in that whole situation. We just came out where many states were shut down. There was deemed essential workers, non-essential workers, lots of businesses struggled. We're already in a labor crisis trying to find enough labor to perform jobs. So now you start mandating vaccinations. There's going to be from employees that say, "I'm not getting vaccinated." So what happens to those employees? Well, those employees now have a choice, whether or not okay, they either get vaccinated, which may be a religious belief on why they don't do it, or just a personal, "Hey, this is, I don't, I don't know enough about the vaccine. I'm not going to want to do it." So now all of a sudden, now the company's put in a situation where they have a government contract that's mandating vaccines to be on the job where now all of a sudden you have more of a labor crisis because a bunch of the employees said, "No, I'm not getting the vaccine and now they walk."

So what happens in those situations is, "Okay, it sounds really good on paper. Let's mandate it. Problem solved." Well, the problem isn't solved because you're not going to have every employee comply with your new mandate. And when that happens, what's going to happen is we're going to continue this labor shortage, this labor crisis that we're in, which we're already understaffed, under manned, under gunned, under everything. That's only going to add to this crisis. So how do we now overcome those hurdles? Because there's only going to create more hurdles now with mandating things. Sounds great, but not everybody's going to do it. So when we're losing people that no longer want to work for us because now it's required, that's going to be a big problem to have that's going to hit us in the face that is, I don't know how we're going to deal with more labor shortages when there's already a labor shortage.

Heidi Ellsworth:
Right. Trent?

Trent Cotney:
So Seth brings up a really good point and it's a polarizing issue, right? And there are people that are for it, people that are against it. But from an employer standpoint, I understand the need and the desire to have it. What's interesting is I've had a couple of contractors call me with potential issues of faked vaccination cards.

Heidi Ellsworth:
Oh, my.

Trent Cotney:
That's become a thing. And people need to understand that there's significant criminal liability for faking one of those documents. So I was reading up on this. I was like, "Wow. It makes sense that you would get this right." So the Federal Trade Commission said, "Look, these little cardboard documents were never meant to be the equivalent of a vaccination passport." Right? Other countries have QR codes or something that show exactly how you've been doing it. So I think, what we're going to see is you're going to see an evolution of this to where just like you have TSA pre-check, you're going to have a more robust passport type system for employers, I guess. But yeah, I agree. The last thing we need is run some of our workforce off. Right?

Heidi Ellsworth:
I know. And well, and when you think about immigration and the borders being closed and everything that's going on, that I think that is just causing this ripple effect more than ripple, avalanche effect, that is kind of taken us all in different places. And it's really interesting, because I want to talk a little bit about material shortages. And it's been really interesting as I've talked to a lot of different people and there were people who were saying their materials shortage is not due to material. It's due to lack of labor. So they aren't able to run the factories at the full capacity, stuff like that. So again, I'm going to kind of start with you on what you've been kind of hearing that way.

Trent Cotney:
Yeah. And it's, it's a complex issue. Most people, when the thing first started, you blamed COVID-19. That's why we don't have materials. That's really one of about 20 different reasons why you don't have materials. One of the biggest issues is just in time inventory process where a lot of the raw materials and components that were used to make the end product aren't, if there's a problem with getting those, it creates a tidal wave effect. And there are other things. There's a trucking shortage, there's a shipping shortage, there's border closures, there's refinery shutdowns. And it's just led to this perfect storm, not to mention that, due to great marketing from Angie and others, the demand is through the roof, right? So you just can't, it's not an easy solution. And the thing that shows me that it's not an easy solution is that President Biden put together a task force. Anytime the US government puts together a task force, it means they have no idea how to fix it, but they want to look like they're doing something.

Heidi Ellsworth:
Well, and I think it comes down to communications and we were talking about this earlier today in that homeowners or consumers are actually starting to understand that there is material shortages. And so contractors now have this ability to have that discussion and to talk about it and to be able to put it out there. Are you seeing that, Lauren?

Lauren Lausten:
Yeah. I mean, we put alerts on our cost guides months ago saying we're expecting prices go up five to 10% this year, there are widespread shortages. So don't be surprised if lead times are higher. So we've been trying to do our part with setting customer expectations appropriately. So they don't just blame it on the pro or question the contractor, if they get that news later down the road, and generally, we've seen customers, if there's continuous communication and the right expectations, that they're willing to wait a little bit longer or have less choice of colors or product lines or whatever it may be. So I think that kind of started to sink in. And it also seems like with inflation just being so kind of top of mind and in the news, that's also factoring in a little bit more to people's decision making on what their projects or what to expect than it probably was a few months ago.

John Gardner:
Yeah. If I could add to that a little different take on it is, Trent, we've been talking about this and this whole group has been talking about it and it is what it is.

Heidi Ellsworth:
Yeah.

John Gardner:
Sometimes you can get lulled into a false sense of security when it comes to high demand and limited supply because your work just keeps coming. And so you decide, "Well, maybe I can cut costs here, or maybe I can shave this a little bit. Maybe I can." Right? And you start to kind of tweak the business a little bit. And now, right now, is the time to look a year from now and say, "What does my business look like a year from now?" Let's just imagine that the supply level is changed and the demand level has changed. And what we have to be aware of is that it takes six months, 12 months, 18 months to place something in the business and make it work, make it affordable element of the business. If we wait 12 months from now to say, "Oh, wow, it did dry up," it puts the contractor in a really tough spot because many of the elements we're talking digital, we're talking technology, some of those elements take some ramp up time.

Heidi Ellsworth:
Right.

John Gardner:
And also the way you're communicating with a homeowner and how you're approaching your lead gen and what you're doing for your labor, all is going to be, it's going to be an interesting rollercoaster when that time comes, when that's the client demand start to converge again.

Heidi Ellsworth:
Again.

John Gardner:
And so my advice, I think everybody at the table here would agree with it is right now is the time to look out 18 months and to start to kind of put your business, put their plan together and implement it and be ready to pull the trigger.

Heidi Ellsworth:
I really love that. And we're going to actually, that's what we're going to end on is your guys' advice for the next 18 months, because now is the time, John. I think that's so wise. What I see, too, is contractors trying to diversify their business. We just had a contractor out here, Wendy Marvin with Matrix. She is added on home improvement, some interiors, some remodeling, some different things so that she's diversified her business. So she's a residential and commercial roofing contractor, very successful in Vancouver, Washington, but she looked at it and she's doing exactly what you're talking about and diversifying it through there, excuse me. And Seth, you work with Wendy. So what do you say to some of these contractors, I mean, when it comes to their insurance? I mean, as to John's point, they're making changes in their business, they're looking at more technology, more risk. How does that relay?

Seth Pietsch:
Well, historically when it comes from an insurance perspective, if you're doing roofing and you're covered for roofing, you need to be pretty much to be covered for everything else, because roofing is about as hard as to get insurance for any construction trade out there. So really, yes, the diversification of just the types of business that you do and planning ahead and really looking down the road of, "Okay, I have this project coming up. It might be starting in six months, but how do I get prepared for it now?" It's trying to back order materials for a project that may meet may not be starting for six months or a year. It's just being prepared. And the best resource that I've been able to come across is, I mean, just to give kudos to Roofers Coffee Shop, is you have very talented people. I've been on half dozen to a dozen virtual meetings with Cotney, talking as a guest speaker and then Michelle Boykin and Reid Ribble and all these different resources, it's not just in your one geographical location, it's countrywide.

And so you can see what's happening just in different areas all across the country. And you can see how very creative ways have been implemented to deal with labor shortages, with material shortages and just, you can never just get comfortable. If you're not advancing and learning, you're falling behind. And you're just always, I'm always trying to find, even though I don't engage in construction with our company, we do the insurance for contractors, a big difference in doing construction, but I'm constantly learning new ways to try to help my clients be like, "Hey, did you think of this way? Or did you think of that way?" And with all the different panelists and influencers that are involved with RoofersCoffeeShop giving their best practices, that's where the information comes from on how to have the best ideas and procedures to deal with labor shortages, material crisises, everything else.

There's no one set answer that is just going to solve all problems. There's going to have to be trial and error and finding ways that work best for your specific needs. But having all of these different people join on these different social media things, it's huge and you can get information and, and everything that you need right there at your fingertips anytime you need it.

Heidi Ellsworth:
Well, thank you because that's what we try to do every day. I mean, I sit here and ask the questions. You guys have the wisdom, and we have it from so many contractors, like you said, across the country, sharing that knowledge across and being open to helping each other, I think makes such a huge difference. And kind of talking about that, Seth, I love this direction. When you talk about that, Trent, you work with so many contractors and you network them and bring them together also through Cotney Consulting and through Cotney Law. Are you kind of seeing more of that peer group, more of that looking for places to come together, like RoofersCoffeeShop or like Owens Corning or Angi or Integrity, Cotney.

Trent Cotney:
Yeah, absolutely. I mean, to piggyback off what Seth said, if I want to know what's going on in the industry, I go to RoofersCoffeeShop. All right. So that's where I'm getting a lot of my news and it's because a great influencers like Seth and the contributions of everyone else that puts me in touch and allows me to do the work I've got to do. So one of the real interesting things that's come out of COVID is acquisitions. There's just a ton of contractors that are buying and selling. I had a couple of great conversations here. There are so many contractors that are looking to either buy businesses or sell their business. And I think part of it is it's just the right time. So part of that networking strategy is also knowing who in the various geographic market you can look to, to potentially buy or sell or partner with. We see a lot of strategic partnerships develop, which I think you're going to continue to see to help navigate some of the issues like materials issue we're dealing with now.

Heidi Ellsworth:
Yeah. Thank you so much for bringing up acquisitions. Talk about hot news of the day we are seeing, Tecta just purchased Empire out of Texas. We're seeing that on our last Coffee Conversations, we had the conversation with Ken Kelly and Kim Simone with Reliant and that exciting part. You should watch it, if you haven't. John, what are you seeing that way with some of your? Are you seeing some acquisition stuff going on?

John Gardner:
Yeah, for sure. I mean, you mentioned a few of them, but what's most interesting about that. You mentioned a few that are within the roofing space, right?

Heidi Ellsworth:
Yeah.

John Gardner:
So Tecta, et cetera, but what's most interesting is never before like we're seeing now is investments. That's when companies outside the roofing industry looking at roofing, roofing space as this is a place where we can invest. Because it's sustainable investment that has pretty high return. And so I think that has a lot to do with the growth and maturity of just our roofing contractors and what they decided that they were going to do to invest in their own business. And, , I remember back in the 90s when I first started, it was few and far between of those contractors of size that really had that platform put in place to be able to shine and have those investors take a look at it. So that's the most interesting part of it is from my perspective and Owens Corning's perspective is the interest from outside roofing space is, I mean, that's a considerable thing.

Heidi Ellsworth:
Yeah.

John Gardner:
That's a really interesting dynamic going on and that's fueling, in part, why there's so much activity. Trent, you just mentioned people are thinking about it, they're asking questions. Right?

Heidi Ellsworth:
Absolutely. Yeah. It's every single day. I've got a lot of friends that are contractors and they call me up and say, "Hey, time's come. Do you know anybody?" That's basically how it starts.

Well, I have to tell you, when obviously talking to Ken Kelly at the FRSA show on Coffee Conversations, he was very much about looking that it's private equity and then, like you said, the roofing looks very positive to private equity and that's a totally different vibe than what we probably looked at with the roll-ups of the 90s.

John Gardner:
Remember the roll-ups.

Heidi Ellsworth:
I was there. I remember. Yeah. Angie, are you seeing that outside of roofing because you have so many contractors that you work with or is it mostly kind of just roofing?

John Gardner:
Yeah, we are. I think in exteriors and kind of the home renovation categories, the most, I know, one our chief economist always points to is that Americans got like $2.5 trillion of home equity built into 2020 just because the property values were going through the roof. So I think that, and seeing how resilient demand was basically May of last year, quickly bounced back from the shutdowns and it was going gangbusters while a lot of the economy was still of kind of lagging. So I think that really caught a lot of people's attention. And I'd say pretty much all of our larger customers who are in exteriors, so windows, siding, roofing, or kind of like kitchen, bathroom remodel, especially, seem to really the hotspots where there's a lot, you're either talking to private equity or have recently gone through some kind of [crosstalk 00:33:18] action. Yeah.

Heidi Ellsworth:
Yeah. It was interesting because we had a really great conversation about this at National Women in Roofing that how do employees navigate this? So these mergers and acquisitions are happening. I've been through a few on both sides and it's not easy. So one of the things we want to look at is that kind of education for people. How do you best navigate that, keep your culture, take care of your people and how people kind of take care of themselves? We were talking about it around women, but it's everyone. So, I mean, Seth, are you seeing any of that?

Seth Pietsch:
I'm seeing actually quite a bit. So in the insurance industry, a lot of the large nationwide insurance companies are acquiring the smaller independent agencies. And there's been about six or seven acquisitions of very well-known insurance agencies throughout Oregon and the Pacific Northwest that have been acquired by big insurance companies.

Heidi Ellsworth:
Wow.

Seth Pietsch:
And what's unique is it's actually creating a really good situation for smaller agencies because the big nationwide firms, they definitely serve a role and they serve a very important role, but there's also a role for the smaller companies. So talking about on the roofing industry as, okay, these smaller roofing companies may be getting acquired from a larger roofing company, but that creates new opportunities for a project manager or a foreman that has been on the cusp of wanting to start his own roofing company. And now he has an opportunity because now there's really just big, huge, giant roofing companies that may not want to deal with a residential homeowner. And that's where this project manager has been working for the last 20 years. So now it gives him an opportunity to start up his own roofing company, service the industry and the area, the property owners, that he's serviced for the last 20 years and now he has that opportunity to do it. And that's personal experience.

That's what we did. Our insurance company that we started with got acquired by a large company. We wanted to do something different from a huge giant company. And so that gave us an opportunity to branch out and start our own. So it's a very good opportunity for a smaller business to start and now become a larger business because now that client that they serve is now being underserved because the larger companies wanting to serve the larger clients.

Heidi Ellsworth:
Right. I think that's really smart. I mean, that's really, it's right on. And I would say too, as we, because this always happens, remember in the industry, I mean, how many times, we go through all these consolidations and then-

John Gardner:
And then it unravels.

Heidi Ellsworth:
And then everybody, all these startups come out and it starts all over again.

John Gardner:
Starts all over again.

Heidi Ellsworth:
We've seen it, I should, say decade after decade. Yeah, yeah. It's crazy. So one of the things I would say out there for people who are thinking about starting a roofing business or who have just started a roofing business, this is the group to talk to. I mean, let's be serious. You need great insurance, you need great legal, you need a great manufacturer. You need a great lead source with someone marketing that's going to help you do that. So there's a lot to be said about these new companies coming up and what we can do for them. What are, let's just kind of go there. And I do want to say one thing out there is that we have, we're a little bit over halfway through this. If you have any questions, if you have any comments, of course, we have Megan Ellsworth in the background, she's monitoring the chat and everybody else.

Heidi Ellsworth:
So she will give me the high sign and we can ask some of those questions, but feel free. This is still wide open for questions, either on YouTube or on the go-to. Excuse me, Angi, you got people starting out, you got young companies out there already who have just started, what should they be doing working with Angi to help grow their business and to do it in a way that is sustainable?

Lauren Lausten:
Yeah. I mean, I think the fundamental to being successful on our platform, because anyone could pass kind of the licensing, background checks, there are certain table stakes things that any pro has to pass, check those boxes, but the profile ratings and reviews, customers are getting kind of more and more choosy as far as what they look for. And really the reviews number of recent reviews, average score, is kind of front and center as people are deciding. And even if they got it as a referral, they'll Google you and check you out on different platforms. So I think kind of delivering the positive customer experience and following up with homeowners to get that online reputation is kind of the table stakes. And that also leads to the referral business and in a more diversified helping marketing mix up over time.

Heidi Ellsworth:
Yeah. We, Karen Edwards and I, wrote a book, Sales and Marketing for Roofing Contractors, and we're kind of like, "Oh, everybody's going to think this is kindergarten." Right? But it has turned out to be so many contractors were like, "That's exactly what we needed. We needed to start at the very beginning and be able to understand how to walk our way through it." And I think that's one of the things that Angie does really well is to be able to deliver that in a way that is easy to utilize and whether you're new or old, you've been around for a while, this technology, the digital, like we talked about before, is where you got to be looking. You got to figure out reviews and what people are saying.

Lauren Lausten:
And I think people are more and more looking different places, or they're not just going to fill out one form on your website and then sit back and wait, they'll keep filling out forms or calling in. And so the more quickly, however, kind of the homeowner raises their hand and says, "I'm interested," the more quickly you can get ahold of them, get out there, run the appointment, get them the proposal, the more successful you'll be and the top pros more and more are using technology to automate text messaging and emails and all of these different channels of communication. So we really encourage all the pros in our network to kind of follow up as quickly as you can, using as many channels as you can because otherwise people kind of attention spans are short and they'll be off looking at it at something or someone else.

Heidi Ellsworth:
Every digital communication is important. John, you're doing this every single day with contractors. And I know Owens Corning is just wide open, bring in a lot of young contractors and kind of help them. What are you seeing with that?

John Gardner:
Well, I think for Owens Corning anyway, and I think in general with regard to the roofing industry, we've come a long way since the 90s. And I'm speaking primarily with regard to manufacturing and Owens Corning, for sure, we've made a massive investment in our contractor group and our contractor team comprised of a dozen, two dozen folks that their job is nothing but contractor.

Heidi Ellsworth:
Wow.

John Gardner:
And so you mentioned something with regard to Angie and making sure homeowners have various ways in which to connect with you. But for many of our contractors, just saying contractors in general, they never get found. And so you're always guaranteed to lose a job if you're not going to be found in a place where a homeowner wants to be. And then number two, and what we've learned over the last 10 years, but really focused heavy in the last five years is look, the products that we manufacture, we're super proud of them. We are absolutely super proud of them. And I think they stand on their own as being some of the best in the industry and so it's not table stakes, but it's not good enough to just have a great product anymore.

Heidi Ellsworth:
Right.

John Gardner:
Our contractors want a absolute, shake my hand partnership. And when they say that to us, when we've earned our contractor's partnership is because we were able to, and this is what they're asking for, I'm not satisfied with just the shingles and the accessories that you're providing us. I want you to help me with installation. I want you to help me with production. I want you to help me with sales. I want you to help me with marketing. I want you to help me with coaching. I want you to help me with labor. I want you to help me and these are questions and these are the partnership requirements today. And we have invested heavily in that, in part with partnerships with RoofersCoffeeShop, with Trent, with Angi, because we know what we're really good at. We also know who are the best in the industry and outside of the industry, they bring to help.

And so to kind of summarize, answer to the question for you in a different way as is contractors that feel like Owens Corning or other manufacturers truly have their back when it comes to what's your one-year, five-year, ten-year goal and how can I help you get there? are those contractors that will rise to the top, but those are also the contractors that reward you with their loyalty. And so with that, it starts that whole process and that cycle again of second generation contractors, third generation contractors.

Heidi Ellsworth:
Yes.

John Gardner:
Listen, it's the best job in the world, to be able to say, we have an amazing product for you, but it's just an awesome experience to be able to have the privilege to be in somebody's business and do what we can to help them. And that's the part of being in the roofing industry as a manufacturer and particularly with Owens Corning is that is the agenda for all of us. So it's across the board.

Heidi Ellsworth:
Yeah. Well, and it goes back. Yeah. It goes back to what you're saying is that we want more young people in the industry. Now, whether they go to work for a contractor, manufacturer, distributor, or whether there's someone like Greta with Golden Construction out of Massachusetts, who said, "I have my degree in entrepreneurship and I'm going to start a roofing business" and her and Freddie did it and they are doing, they are just shaking up the world. She's one of our RCS influencers. She's amazing. And, but I think they have hurdles and they need help. I mean, Seth, it's not easy for brand new contractors to get insurance, right?

Seth Pietsch:
It's not. I always advise the new contractors that are trying to get licensed with the Construction Contractors Board is, "You really need to have a good attorney. You need to have a good CPA and you need to have a good insurance agent" and having a relationship with those people around you is key because one insurance policy, it doesn't cover everything and there's a lot of different dynamics that go into it and you really need to know what type of coverage you have as a roofing company, because there's different forms and exclusions that are going to pertain to residential roofing versus commercial versus height exclusions. So when you first start out and with your business, you just need to have that dialogue option to be able to talk to your agent, find out what the pros and cons of each insurance policy is, and there's a place for this, too, but buying online is usually not the best option when you're a roofing company, because it will get you licensed, but it provides a very watered down version of the insurance policy that you're needing.

So you really needed to have a relationship with the people that you're working for where you can call them on their cell phone or their office and they'll get back to you. It's very important to be able to answer your questions when you have them, because you're going to have a lot of questions the first couple of years and even after, but the first couple of years, especially.

Heidi Ellsworth:
And that kind of brings me, Trent, I would love to, you have Cotney Consulting, you're doing estimating training, you're doing so much training that's going to help, not just in new businesses, but also in people moving up and really finding that career in roofing. What are you seeing with the people coming in with the consulting and the estimating and all of that great stuff?

Trent Cotney:
Sure. So about a year ago when we brought John Kenny over, he's got 45 years of experience in the industry, we started developing a suite of estimating training and we've got intermediate and advanced modules, and we just saw a big hole in the industry there. We didn't see really that kind of training readily available. So it's digital, we have it in Spanish and we're moving forward with additional training. We've got safety and other training modules that we're going to have. It's all on shopcotney.com and the idea behind it is to help those new contractors that sort of come into the business. I think one of the things that I see with new contractors is a lot of times there is a focus on sales and sales is critical, but you also have to watch out for the bottom line.

So part of the thing is making sure that you shore up your standard operating procedures that, like Seth said, it's what you don't know that that kind of gets you. So you want to make sure that you're doing everything you can to protect whatever your bottom line is going to be. And I think it's just like Seth said, you got to have a good accountant, good legal, good insurance agent to do that.

John Gardner:
You got two out of three.

Heidi Ellsworth:
Yeah, right here. I think we got everything we need. Now we had a quick question come in and I want to just read that question here. And it was the velocity of delivering quotes is faster because of technology. The valid timeframe of a quote is shorter because of price increases while the lead time for material is longer. How does it contract or reconcile all those different dynamics? I'm going to start with you, Trent. Do you want me to read it again?

Trent Cotney:
No, I got it. So there's two different scenarios that you've got to look at. One is whether you're entering into a new contract or you're already stuck in an existing contract. So to keep it simple, if you're in a new contract, there are certain contract provisions that you absolutely have to have in there to protect you. One is the price acceleration provision because it's Roofers Coffee Shop, if they reach out to me, I'll give it to them. No problem. And the other is a material availability provision that deals with delays. Okay. There's other things, but those are the two big ones. If it's an existing contract, then what you need to do is I've got a four step process that I like to go to. First is you set the stage. You work with your manufacturers and distribution to provide letters and documentation, evidencing, whatever the issue is. The second is you review your existing contract.
So what you want to do is you want to go down and see what provisions do I have, regardless of whether it's residential or commercial, it may help me get this in front of the customer. Okay. The third step is get in front of the customer. It's either a change order or a claim, or if it's a homeowner, just simply going up to them and explain what the issue is, then you negotiate, right? So a lot of negotiation techniques have really come into play with the materials issue, everything from offering added workmanship warranty, we're willing to split the baby on material price increases. I've seen adding walk paths. I've seen upgrading, I've seen maintenance plans. I've seen all kinds of stuff to get from point A to point B. But the key thing that I want everyone watching this to understand is happy customer, happy contractor. That is the key thing. Focus on keeping that customer happy.

Heidi Ellsworth:
Yeah, that's great. That's great advice. Thank you. And thank you for the question, Nancy. That was a great question. Okay. I want to, we're getting close to the end of our hour. So one of the last questions that I tasked to this great team was what should a roofing company, a contractor, even an individual, what should you be thinking about and planning for the next 18 months? I mean, we know what we went through the last 18 months, so now the next 18 months, and some of it we've already talked about, but if you could kind of summarize what you think are some of the most important things. So we'll start with you, Lauren.

Lauren Lausten:
Yeah. Thanks, Heidi. I think the two things that stand out to me are the customer experience and technology. So on the customer experience, I know it's when things are busy and chaotic, it can be easy to kind of let communications slip through the cracks, but really honing in on the processes to hold the customer's hand and deliver a great experience from end to end and beyond the project and have them be kind of an advocate and building your online reputation is, is really a solid foundation for kind of whatever the future brings in terms of demand. And then on technology, I think we've seen a lot of the same things John was kind of speaking to earlier, more and more requests to integrate their feeds with their CRM or their automated texting service, all the tools that are now out there. And I think a lot of our kind of leading edge smartest contractors are really investing in that and ditching those things together into their business processes to run more efficiently and also kind of lay the foundation for growth and ending profitable in the long-term.

Heidi Ellsworth:
And being profitable. That's a big one. We want to make sure. John.

John Gardner:
Well, I think for me kind of looking forward, two places. First, just kind of emphasize what we talked about earlier, and that is with regards to look, you can't sacrifice sales for marketing. You can't sacrifice marketing for sales, but because the space has changed so dramatically and the space meaning what's in between Mr and Mrs. Jones' head and how are they going to go to market is really hyper-focused on my brand and hyper-focused on how I get found. And so there's a lot to unwrap there, right? But one of the things that we recognized about two years ago, Heidi, as you know very well is look, there's three primary pillars here that that can help essentially to drive the business. One is brand and marketing. The other is sales process and having a sales process for the sales person and a sales process for the ownership and the management of the company. And they have to work simultaneously. And the third part is what's my overall process? How do I get everybody in my organization, whether it's 2, 5, 10, 200 people, totally on the same page running in the same direction?

Heidi Ellsworth:
Yes.

John Gardner:
And we call them our business accelerators and that's Rodney Webb, Sue Hawkes with Yes, and Anna Anderson with Art Unlimited. By far some of the most advanced training, but digestible for contractors of all sizes. So I highly suggest taking a look at that. And Heidi, you know that really well, because we worked on that and we communicated a lot of that out to the market.

Heidi Ellsworth:
It's really important because they can help you plan for that next 18 months.

John Gardner:
Exactly.

Heidi Ellsworth:
Right?

John Gardner:
Yes, exactly. And the last part is we, we talked about this, but it's worth noting again, invest in your employees. Invest in your employees, and the way that we try to help with that is to provide the right type of training and education, whether it's live or on demand or virtual through Owens Corning University, is you have to invest in your employee. I don't care if it's the marketing person, the sales person, the installer, production guy, if the employer employee is not engaged with our company and feels like you're not engaged with them, the chances of them leapfrogging to somebody else is really high and the amount of dollars that we all spend on our employees and the numbers it back up, substantial. The cost to lose an employee who you find to be productive, it can be thousands and thousands and thousands of lost dollars and lost time. So I would encourage contractors to, look, start simple.

Here's a simple sales process. Here's marketing, here's production. Here's how you, et cetera, et cetera. We've done it. We've tried to help. And we think we have a great platform at Owens Corning University to be able to plug those in. In addition, we have partnerships with awesome folks like Trent Cotney, awesome folks like RoofersCoffeeShop, awesome folks like Angi, where, look, if we're not great at it, we need to have somebody else speak to our contractor and that's great stuff. So those are my two.

Heidi Ellsworth:
I think that's so great and prepare and prepare. Seth.

Seth Pietsch:
There's been so many great ideas thrown out there today. If I can just advise one thing to take away from this whole hour long informative talk we've had is get involved. Get involved with the roofing industry. I mean, this industry is, is absolutely amazing. It's one of the best industries that I've ever been part of. And look at all these talented people around that you can reach out to and get information from, whatever it is. And it's everywhere. It's the east coast to the west coast. And there's, don't think that it's just, "Oh, I don't want to be involved because my competitors are there." No, you know what? You're going to find that a lot of your competitors turn out to be good friends and that want to help you. I mean, there's so much business out there right now that we kind of all need to help each other.

And that's what this panel's for. That's what this industry is for. That's what the NRCA is for. And, if you're on the borderline of, "Well, I should be involved or not," do it because you're going to be able to get all the information that you're looking for through somebody. Somebody will know somebody who puts you in the right spot and getting involved with the roofing industry is the best advice that I could give anybody out there listening.

Heidi Ellsworth:
So that's great. That's awesome. Trent, can you bring us home?

Trent Cotney:
It's hard to follow you guys. It's pretty good. So, if I had to say, I would say look to the future. I mean, I think renewable sustainable energy is going to be key. I think what we're going to start seeing is roofs as profit centers. I think we're going to start developing solar, wind, kinetic hydroponic, advanced green technologies, carbon capture, that I think are going to reshape and revitalize a lot of what we are currently doing in roofing. So how do you keep your finger on the pulse? Roofers Coffee Shop right there.

Heidi Ellsworth:
Yes. Keep it on the pulse because all these folks, they have it and they're bringing it to you. And I also want to, I want to talk about ABC Supply because ABC Supply sponsored this today and they are another great company that is looking out all the time for their contractors, bringing them home, making things happen, offering great programs and working with all of the folks who are here. So I want to say thank you to ABC Supply. You rock. Thank you so much for sponsoring our live Coffee Conversations at IRE. And I really want to say thank you to all of you. You, I'm humbled at the wisdom and just the giving back to this industry that you all do. And thank you so much. So please join us again. We're going to be doing this again tomorrow on our IRE Coffee Conversations.

It's going to be with our RCS influencers, all contractors, and they're going to be talking about what they're seeing at the show, what's happening in their areas. Again, sponsored by ABC Supply, who is really wanting to bring this show to you wherever you're at. We're also going to be live the rest of the day with fun interviews and information, including some happy hour visits with our Latinx friends and the first timers and welcome party. So don't miss a moment and we'll see you next time. Thanks.