How Chad Hallock got creative about driving business at Budget Blinds during the recession Featured

8:01pm EDT August 31, 2011
Chad Hallock Chad Hallock

On the surface, Chad Hallock’s situation seemed contradictory: generate more business while spending less money.

Hallock, the CEO and one of five co-founders of Budget Blinds Inc., was forced between this rock and a hard place by — not surprisingly — the economic recession. As a manufacturer and installer of custom blinds, shades and drapery, Budget Blinds’ customer base took a hit as the economy took a nosedive in late 2008, slashing new housing starts and halting remodeling projects in the process.

That made it much harder for the company’s 800 franchises — employing about 2,000 people — to drive business and turn a profit. Up until the recession hit, the company had been growing by about 100 franchises a year, with a failure rate of approximately 3 percent. Once the economy began its freefall, Budget Blinds was opening 60 franchises a year with a 10 percent failure rate.

“The challenge was to keep our franchisees in business and thriving in spite of the situation,” Hallock says. “When things are great, you can get very little in the way of new business and still be successful. When the housing market goes, so does the lead flow they were accustomed to.”

Hallock and his leadership team had to re-evaluate how they were marketing the business, where they were spending money and how they were going about beating the bushes for new potential customers. With the economy crumbling throughout the end of 2008 and into 2009, Hallock and his team came to the conclusion that large, high-cost marketing campaigns paved a path to the poorhouse.

“You really have to take a look at how you’re generating those leads,” he says. “You can do things like a mailer, a magazine ad or a television ad. But those cost money. So we quickly realized we had to plug this hole another way, and that’s when I said we had to focus on the Internet.”

Over the next several years, Hallock and his team structured and rolled out a two-pronged plan: Get to the top of the main search engines without spending money on sponsored links and provide franchisees with support for their grassroots sales efforts, tactics intended to build up the customer base through personal relationships.

Don’t make them scroll

As a company with no storefront locations, Budget Blinds is completely reliant on networking and mass marketing to find new customers. By reducing the company’s emphasis on print advertising and moving toward the Internet, Hallock made it a necessity to get Budget Blinds to the top of all relevant Web searches, which meant he needed to partner with people in the growing marketing area of search engine optimization, or SEO.

Hallock had used the Internet as one tool in his marketing belt for about a decade, but now he needed it to become one of his main sales-driving vehicles.

“Over the past six or seven years, the Internet has given us the best bang for our buck,” Hallock says. “It’s called CPL, or cost per lead. Once you see that the Internet is helping to drive a certain amount of business, how can I improve that? How can I spend my money and time on things that I can improve?”

At the top of most Internet searches, the user will find a set of sponsored links. Those links are paid advertisements. The company pays a fee to get their link at the top of the page. Hallock wanted keywords and key phrases to do the pulling to the top of the search, not the marketing funds he was feverishly trying to conserve. But he was wading into the deep end of the SEO pool with e-commerce companies that are specifically designed to market and sell on an Internet-based business platform.

Though Budget Blinds markets over the Web and does not have a brick-and-mortar retail presence, the company isn’t designed to be an e-commerce outfit.

Hallock went to his Internet marketing agencies, which he has been working with for about a decade and began to map out a plan that would allow Budget Blinds to venture into the fray with e-commerce companies.

“We had a bunch of meetings, all the agencies getting together in our conference rooms and talking about the challenge,” Hallock says. “Just because they’re e-commerce doesn’t mean we can allow them to show up and place higher on the searches than we are. Before we solved that problem, several years ago, we weren’t showing up well at all on the free part of the searches. Now that we have worked together to address the challenge and solved it, according to recent searches, we’re the second-highest company in terms of SEO in our space. The company ahead of us is an e-commerce company, and they’re one of our key accounts.”

The key to mastering SEO, Hallock says, is to learn how large search engines such as Google, Yahoo and Bing work. The big search engines know who is searching for what. Once you have uncovered who is searching for your product or service, when they’ll search for it and how often, you can build a strategy that can help maximize your Internet visibility.

“We can go to Google and find out, for example, how many people tomorrow are going to search the term ‘blinds,’” Hallock says. “How many are going to search for ‘window company’ and ‘window treatments.’ Google has the ability, with the way they built their system, to see what type of searching is going on. There is kind of a fundamental math equation that says if all these searches are going on and I’m in the one through three position on the search results, I’m going to get X amount of traffic. And if I can convert on that X amount, it will generate a given amount of revenue. You put a profit percentage to it, and you decide what it’s worth to go after. How many resources and dollars should I spend if this is the potential outcome?”

If you’re going to make a large commitment to SEO and Internet marketing, one place you will need to spend money and resources is with your personnel. Despite a shrinking revenue base over the previous several years, Hallock has still invested money in beefing up his IT team.

“Over the past three years, our IT team has grown to 22 people,” he says. “We’re not an e-commerce company, but we have grown our IT team and we have specific, exclusive agencies that handle our Internet, because of the level of commitment we’ve made. I am in meetings constantly, all focused on how we can improve our Web presence, how can we improve the lead flow.”

Lead the way

The Internet is a useful tool for marketing, but you can’t lean entirely on Web searches if your company isn’t structured strictly for e-commerce. You still need a personal touch, and that means putting power in the hands of the employees who develop relationships with your customers, and that’s where the second prong of Hallock’s strategy comes in.

You have to educate employees and back up their training with resources. At Budget Blinds, Hallock and his leadership team have worked for the past several years to give franchisees a ready-made jump-start in driving new business.

From the corporate office in Orange County, Hallock and his team have spent the past several years negotiating partnerships with major homebuilders around the country. The partnerships allow Budget Blinds to attain status as the exclusive provider for window shades and treatments in new homes.

“We’re working with a number of huge companies now, doing tests to see of they’ll be able to add us as one of their suppliers,” Hallock says. “With those kinds of deals in place, our franchisees don’t have to go out and generate leads. They automatically get a book of business when they start out with the Budget Blinds brand.”

If you’re going to ask a lot of your workers in the field, you have to provide them with a lot of support. You have to lay the groundwork before your people can excel. Hallock used his franchise system as an example of how to support employees in the field.

“The struggle with being a franchisee as the economy backslides is, I’m the franchisor and I’m asking, ‘What have you done for me lately?’” Hallock says. “But if you can start giving your people, the day they move into their franchise territory, some great opportunities, you’ll put them in a much better position for success.

“If, for instance, a franchisee knows that the brand is going to have a presence in all the big box retailers in their territory, that’s a big deal when you consider all the customer traffic that the different big box stores get. If you can negotiate deals to get into those stores, then when a franchisee signs on with you, they know they’re going to get all of that big box store’s traffic. They’re going to have a display in those stores.”

As a corporate leader, your job isn’t on the grassroots level. Your job is to hire the right work force to conduct operations in the field, and then leverage your resources to make them better at their jobs. Hallock has fully embraced the notion that he and his leadership team are the main support staff for the company’s franchisees.

“The franchisees are on the grassroots level,” he says. “They’re the ones we’re teaching to go knock on doors, go to meetings, do all the networking. That’s not corporate’s role. We have all the contacts, we meet with the vice presidents of the departments and work with them on a much higher level than grassroots.”

You need to maintain a global perspective on your business because you need to develop an accurate picture of how to best utilize your resources. Some employees, divisions and regions in the field will bear more fruit than others, for a variety of reasons. Hallock says that when you’re deciding where to distribute your corporate-level resources, it’s often best to aim toward the middle of the pack — toward the areas that are performing adequately, but could do much better. That is where the potential is often the greatest.

“Don’t always focus on the worst performers,” Hallock says. “I’ve seen people who want to focus all their time and energy on the worst part of their business, and you’re going to spend all of your resources and effort on trying to help them to be successful, and it won’t work. Instead, focus on where you think you can get the biggest return.

“The people in the middle, they’re responsive. They react when you give them sales tips, when you help them. You want to go where people will make a change, and the help you give them will put them over the top to where they’ll become more successful than they ever thought possible.”

Hallock’s multifaceted approach to driving new business has allowed Budget Blinds to weather the recession in relatively good shape. The company has remained in growth mode with a long-term goal of 1,500 franchisees. Budget Blinds generated $240 million in revenue last year.

“Just remember, don’t put your eggs in one basket,” Hallock says. “As you grow, probably eight out of 10 things won’t work the first time, but the two that do work make up for the eight that don’t. If you try only one thing at a time, when that one thing doesn’t work, you’re six months behind the eight ball again. You’re in an even worse position. That’s why you need to have that multifaceted approach.”

How to reach: Budget Blinds Inc., (714) 637-2100 or www.budgetblinds.com

The Hallock file

Name: Chad Hallock

Title: Co-founder and CEO

Company: Budget Blinds Inc.

What is the best business lesson you’ve learned?

Never let the failures get you down, because success always seems to be right around the corner. I can’t tell you how many times that happened. I work on things all the time that don’t work. But if I quit, I’ll never find the one thing that does work. When you’re hearing ‘no,’ you never know how close you are to a ‘yes.’

What traits or skills are essential for a business leader?

If you ask me, transparency is the one word I’ll come back to. They have to see your heart, your integrity, and your ability to take the bad with the good.

What is your definition of success?

Freedom. When I hit 1,500 franchises, and the franchisees are successful, I’ll have hit every goal I’ve wanted to achieve. That is what everyone bought into. And with that comes freedom. Freedom from worry over what is going to happen today.