Bath & Kitchen Galleria’s owner explains information asymmetry, firm quotes and why an experienced crew is a homeowner’s best insurance policy.
In this episode of THE CREEK, host Rico Figliolini sits down with John Hogan, owner of Bath & Kitchen Galleria, to talk about what separates a trustworthy remodeling company from the rest of the industry. Hogan explains how his background, degrees from Villanova and Emory and a management consulting career at Ernst & Young, led him to apply corporate growth and logistics principles to an industry he describes as plagued by low customer satisfaction and inconsistent standards.
The conversation covers the concept of information asymmetry that lets underperforming contractors stay in business, and how Hogan’s team builds trust by asking homeowners early on about their past renovation experiences.
He describes the company’s budgeting conversations, its Designalytics design process for kitchens and bathrooms and the value of experienced crews when unexpected problems, like termite damage found behind a wall, arise mid-project.
John and Rico also touch on where AI does and doesn’t fit into design work and why Johns Creek makes up a significant share of the company’s business.
Takeaways from our podcast:
- How John Hogan’s background in management consulting shaped his approach to home improvement
- Why the remodeling industry struggles with historically low customer satisfaction
- What information asymmetry means and why it lets underperforming contractors survive
- How Bath & Kitchen Galleria builds trust with homeowners from the very first conversation
- Why understanding a project’s true budget range leads to better outcomes
- What the Designalytics process involves, from precise measurements to 3D renderings
- How experienced crews handle unexpected problems like hidden structural damage
- Why bench strength and years in business matter more than price alone
- What role AI currently plays, and doesn’t play, in kitchen and bath design
- How Bath & Kitchen Galleria’s dedicated-crew system builds long-term homeowner relationships
- Why John Hogan sees Johns Creek as a significant and growing part of his business
Timestamp:
00:00:01 – Introduction to Rico Figliolini, John Hogan, and Bath & Kitchen Galleria
00:01:33 – John Hogan’s path from Villanova and Emory to Ernst & Young
00:04:36 – Why the remodeling industry has some of the lowest customer satisfaction around
00:06:23 – Explaining information asymmetry and why bad contractors can disappear
00:08:06 – Homeowners staying in place and multigenerational living trends
00:09:33 – Remodeling tissue scars and building trust with wary homeowners
00:12:54 – A roofer who finally earned trust after years of bad experiences
00:14:52 – The first conversation with a new client and setting expectations
00:16:45 – Asking homeowners the right budget questions without overselling
00:19:59 – Nearly 400 remodels a year and standardized bathroom pricing ranges
00:22:03 – How a consistent process delivers uniform quality at scale
00:23:49 – Why the same crew stays with a project from start to finish
00:26:09 – Why every homeowner is really looking for an honest guide
00:29:07 – Inside the Designalytics process of measuring and planning a project
00:32:37 – The difference between a quote and an estimate
00:33:52 – Where AI does and doesn’t yet fit into kitchen and bath design
00:35:17 – A kitchen project that grew into a full bathroom addition
00:38:20 – Discovering hidden termite damage behind a wall mid-project
00:40:19 – Comparing how homeowners research a car versus a contractor
00:42:37 – Why safeguarding your investment matters more than saving a few percent
00:44:22 – Bath & Kitchen Galleria’s growing presence in Johns Creek
Transcript:
00:00:01 – Rico Figliolini
Hi, everyone. This is Rico Figliolini, host of The Creek here in Alpharetta, which is the borderline of Johns Creek, I’ve got to say. So BK Galleria is where we are. I’m loving this because we’re going to be speaking to John Hogan. Hey, John, how are you?
00:00:16 – John Hogan
Hey, Rico. Thanks for having me this morning.
00:00:18 – Rico Figliolini
Yeah, no, I appreciate it. We’ve spent some time in the setup here talking, ahead of taping this, about where you came from and your background a little bit. Really interesting, and how you found your way here. So, fellow Northerner, like myself, although I’m from Brooklyn, a little different part of New York.
00:00:38 – John Hogan
Yep, we had a little discussion of common roots. Yes, yes.
00:00:43 – Rico Figliolini
So this is, you know, it’s funny… I guess my background is Italian, so it’s masonry, home improvement, a little bit, stuff like that. Yeah, so I can appreciate what you’re going through a little bit.
00:00:58 – John Hogan
Yep, and I myself, I’m half Italian, half Irish, a pretty common combination coming from the Northeast. And like a lot of Northerners, we found our way down here for education and found out it’s a great lifestyle down here, and we never left.
00:01:14 – Rico Figliolini
Me too. When did you come down, though? That was in ’89, so this place was way different back then.
00:01:23 – John Hogan
Way different.
00:01:24 – Rico Figliolini
Yeah. So tell us a little bit about yourself and your background. Give us a little bit, flesh yourself out a little bit more for everyone.
00:01:33 – John Hogan
Okay. You know, we’re here to talk about home improvement, and my background is a good place to start, because home improvement as an industry, let’s face it, doesn’t have the best reputation in the world. My background: I have degrees from Villanova University and an MBA from Emory University. And then I spent a number of years at Ernst & Young as a management consultant. So I come at the home improvement industry from a little different angle. Most guys, their dad was a carpenter, and they grew up with a hammer in their hands. I grew up with an Excel spreadsheet in my hands. And then, while I was with Ernst & Young, I really learned about rapid growth of businesses, roll-ups in many, many different industries, and really about the integration of logistical expertise. And then I applied it to an age-old and suffering industry called remodeling, where the typical customer experience isn’t so great. I applied what I learned from previous careers, especially at Ernst & Young, and started applying the very same principles that are driving the success of other industries. And we’re doing that here in home improvement, where it’s so much needed. So I’ve been applying these principles to home improvement and remodeling for over 10 years and achieving some remarkable results.
00:03:07 – Rico Figliolini
You guys have grown tremendously, over four times your size from when you started, is what I understand. And you’re right. I mean, I’ve been living in the same house since ’95 here, in Gwinnett County, just five to ten minutes south of Johns Creek. Dealing with home improvement people, it’s never easy. They either don’t show up on time, or they don’t show up at all, even after you’ve contracted them, which I just don’t understand. And yet you come at it differently. Most people come to this industry having banged the nails, or done the plumbing, or the tiling, or whatever, and you’re not doing it that way, which probably gave you better insight, I think, in how to run this business better than most people. So I’m glad to see that what’s happening here is that you’re also listening to clients, because that’s the biggest thing. I know from my experience, and from neighbors, because we all help each other, right? Someone sees a roof being done, and ten neighbors are asking, who are you using? So if we’re doing the whole house, or the kitchen, or whatever it is, they come over, everyone’s friendly, they check it out. So how do you get to that? I know when I talk to a home improvement person, they don’t always give me what… they’re not listening to me almost, it sounds like. So how do you solve that?
00:04:36 – John Hogan
Let me answer your question in two parts, one at 40,000 feet, one more at 200 feet. So the issue with home improvement, and the reason why I love this industry… I feel like the home improvement industry has, it’s the greatest fraud that’s ever been executed on the American public. And I mean that in a way that in our everyday life, no matter where we go, the dentist, the doctor, Home Depot, Best Buy, Amazon.com, everybody is striving for that last 10% of customer satisfaction. They’re already achieving 99%, but they’re looking for 99.5% customer satisfaction. The remodeling industry has trained the American public that somewhere around 25% customer satisfaction is all that you’re going to get. And if you get more than that, you should be very, very thankful. And that is a true stat, by the way. The stat comes in this form: over 300 homeowners were surveyed after a remodel, and 75% of them were no longer on speaking terms with their contractor. Can you believe that? We laugh about it.
00:06:08 – Rico Figliolini
But where else in the American public, in our economy…
00:06:10 – John Hogan
Does an industry, or companies, with such low satisfaction continue to exist? I mean, no place.
00:06:22 – Rico Figliolini
No, you’re right, no place. If somebody achieved that level of satisfaction, they’d go out of business.
00:06:23 – John Hogan
But this industry has trained us all that that’s just something we have to live with. Okay, so let me bring this home here. This is something that we’re attacking head-on, and we’re bringing higher standards. One way that this industry continues to exist, even with those low satisfaction levels, is what’s called information asymmetry. That’s just a fancy MBA term for: there is no realistic way for you to be able to compare and track the relative performance of any contractor.
00:07:06 – Rico Figliolini
What does that mean?
00:07:07 – John Hogan
So for a remodeler, a roofer, a gutter guy, whatever, there’s no way… let’s say there’s a hundred roofers out there, it’s probably more like a thousand. So how do you compare one to another? What source of information do you have to actually do a comparison? There’s also a problem: if somebody does a bad job for a year or so, it only costs about $35 to close your company and open a new one, and therefore your bad performance is gone. So that’s called information asymmetry. There isn’t any way in which you can objectively compare different competitors or home service providers. And therefore, there isn’t a way, if you want to remodel your bathroom or your kitchen, there isn’t any source to go to, to be able to objectively compare and then select the best company.
00:08:06 – Rico Figliolini
Okay, and I can see that. I can see even when we do estimates at home, for example, there’s different levels: do I want to look at cost? Do I want to look at quality? What is it that I want to look at as a homeowner? I might be in a home for 30 years, and I know I’m going to be there the next 10, 15 years, maybe. So do I want to replace all my windows? Is the cost worth it or not? Or do I really want to just take care of the bathroom, because that’s really where it needs the work done? How do you deal with that when you’re dealing with… we were talking before about the demographic a little bit, right? You have a lot of homeowners staying in place. You have kids returning home. Even now, kids are living at home. It’s just like a friend of ours who moved into a three-story townhouse, and the daughter came back and moved in with her. My kids live with us too, two of the three kids, and I don’t mind, I can cook breakfast, have dinner with them, it’s all good. Good to have family around. But how do you deal with people who are coming to you, who are going to stay in their home, they need this stuff done, and they’re mortgaging the house to do it? Can they count on you to do it the right way, so they don’t have to become the live-in foreman, essentially, while the work’s being done, to make sure it’s being done right?
00:09:33 – John Hogan
So let me start with, you’re getting at the relationship with the homeowner, and it’s complicated in this industry. It’s complicated for us as a company, because… the first thing that we have to deal with is what we have named ‘remodeling tissue scars.’ It’s a little bit of a pun, but it’s dead serious. Everybody that comes to us, without exception, has experienced some project, large or small, that has gone wrong. It may be some things that you mentioned earlier: they received substandard work, or they wrote a big check to somebody and then couldn’t find them for six months, and finally got a phone call back. Or they came and demoed the room and then disappeared for three weeks and didn’t answer the phone, and finally came back weeks later. There’s all sorts of ways expectations get crossed, and it leads to dissatisfaction among homeowners. So when they come to us for a project or a remodel after they’ve already experienced something like this, they have that disposition of mistrust. So when we start a conversation or relationship with the homeowner, the very first thing we do is ask, have they done work on their home before? And then we say, how did it go? My standard instructions to my staff are: be quiet and listen, because you’ll find out exactly what happened before, and we’ll understand how to frame what we do so that they let their guard down a little bit and start to talk about what they’re really trying to achieve. Their first thought is that they don’t want to be taken advantage of. So once we get that out of the way, and they get to know us a little bit, then I can get more directly to answering your question. There are people who are seeking to age in place now, and that’s driven by the macroeconomic environment of interest rates and housing costs. People are staying right where they are. So aging in place, and making the home adaptable as they become older… it may be that they’re adapting their home so their mom or dad, who’s now in their 80s or 90s, can also live there and have a decent, somewhat independent life with their kids. There are other homeowners who maybe move frequently, so they’re trying to remodel to achieve a financial return. It’s not for them, it’s making sure they’re strategically investing in their home in the places where it’s going to pay off in resale value. So different people do remodels for different reasons, and it can very much impact the consultation we give them about where they should be spending their money.
00:12:54 – Rico Figliolini
I like the thoroughness of explaining that, because you’re right. I mean, everyone, whether you’re selling insurance or roofing or whatever, the guard is always up, because: is this a real price? And if it’s a real price, is what’s being delivered to the property what was promised? Because that can vary too. And your business is obviously a bit different than, say, the roofing business. The roofing business… I can’t tell you, at least a dozen, if not 15, roofers have knocked on my door over the past 10 months. Hail damage, you got hail damage, got a deadline, you got to do it by a certain point. So we ended up replacing the roof. One of those guys actually felt like we could trust him. The whole process was really good, and it just made me feel like there’s someone out there that can do this. They delivered on time, everything was neat, they covered everything. When they left, I didn’t know they were there.
00:13:56 – John Hogan
You’re getting at the sacred goal of what each contractor is trying to achieve, and that’s trust, trust with the homeowner. And when you can feel even a hint of that, of somebody you can trust, you’ll jump on it.
00:14:13 – Rico Figliolini
So when you talk to clients, or when your team talks to clients that come in… you’ve got a great, I mean, I walked in, 10,000 square feet, beautifully laid out, very impressed. And just looking around, I’m thinking, I could see that in my house. But when you’re dealing with homeowners, everyone’s different, right? They have different expectations of what they want, maybe they have certain costs to cover. What’s the process? I walk in, I say, I want a kitchen remodel. What’s the process of doing that with me?
00:14:52 – John Hogan
That’s a great question. The first thing we do is try to understand what their objectives are, and why they’re here today. The easy answer is, well, we want a kitchen, or we want a bathroom. So one question I always ask is, okay, I understand that, and thank you for coming, we thoroughly enjoy that you selected our showroom, we’re very, very thankful and grateful to come to the showroom today versus last year or five years ago. And that sometimes can be a very revealing question. They might say, my mom got sick, or the bathroom is leaking, or something like that. So it gives us a little more insight. Once we find out what’s driving the project, and if there are any timeframes, it has to be done by next month or next year or whatever. Then we start to head directly toward budget. Some companies leave budget as sort of the white elephant in the room that nobody talks about until the third, fourth, or fifth meeting, and our attitude is, why would we waste our customers’ time doing that? So there’s one question I like them to answer, and probably three-quarters of people don’t have an answer for it just yet. I ask them: my job is to tell you how much it costs, and, usually it’s a husband and a wife who come in, your job, what I’d like you to do, is understand what is the appropriate amount of money to spend on this project at this time. And very often they’ll say, well, we don’t know what it costs. And then I very politely say, okay, please listen to my question one more time: I’m going to tell you what it costs as soon as I learn a little bit more, but what you two have to understand, or figure out for yourselves, is what’s the right amount of money to invest in this project. And that involves some very personal questions that are none of my business. How many tuition payments do you need to make? Are you getting a new car this year? Are you going to Paris for vacation? You have all these personal expenses, but after you net all that out, how much money is left, and what is the right amount of money to spend on your house? It could be based on how much equity you have in your house, how long you plan on staying there. These are all very personal questions, but I ask them to come up with a range. They don’t necessarily have to tell me, but if the range is 10 to 20, they’re not getting a new kitchen, they’re probably getting countertops, a sink, and some backsplash. If the answer is 70 to 100, or 100 to 200, or whatever, then we can have a more productive conversation about some very significant remodeling in their home. So you really have to get to know them, and you have to have the courage. Some people are afraid to ask these questions, but you have to have the courage to really help them and advance the sale. If they say, my budget is $150,000 to $250,000, it doesn’t mean, oh my gosh, look how much I can raise prices. Really what I’m saying is, okay, we can move walls around, we can look at hand craftsmanship in cabinetry, we can look at natural stone. Otherwise, if a customer is trying to hold their cards close to their vest, then really, the only thing we can do is put them in very inexpensive materials, which may not be what they’re looking for after all.
00:18:53 – Rico Figliolini
I love the explanation, because I can see the process. If you’re wanting to get your shower stall replaced with tiling, but then all of a sudden you start expanding the look of it, and you say, you know, there’s that old jacuzzi, what would it cost to rip that out? Then what would it cost with the cabinets? We could keep the cabinets, but replace the top, the surface. All those things add money. By the time you get to a certain point, you realize you’re out of scope, out of frame of your initial budget. So I love the idea of asking that question. People might say, well, why would I tell them how much I can spend? Because then they’re going to want to maximize that. And my thought, as you were explaining it, because I do the same thing in marketing, is I’ll ask, what is the budget you have to commit to marketing? Because some people don’t understand what the cost would be.
00:19:55 – John Hogan
No, that’s very true. Inflation has been pretty brutal as of late.
00:19:58 – Rico Figliolini
But I can understand why homeowners feel that way.
00:19:59 – John Hogan
And again, it comes back to their predisposition. And if you really look… I’m very much a closet psychoanalyst, and I love the psychology of buying behavior. Many people are trained that in a negotiation, you never make the first offer. So it kind of rhymes with that a little bit. We’re very good at disarming any potential conflict in that type of conversation. We’re presently doing just under 400 remodels each year. Over the years, we’ve done many thousands of remodels. So we know what things cost. We know what the average size master bathroom is in Johns Creek. We know that full bathrooms, the size of them, doesn’t change between Alpharetta, Johns Creek, Marietta, or any place else in the country.
00:21:01 – Rico Figliolini
Right, roughly the same size.
00:21:02 – John Hogan
What we can do is give them a range. Say we’re flipping out everything in a full bathroom, everything stays in the same place, but we’re flipping it all out, updating everything. That project is going to be… we’ll give them a $5,000 range, and depending on whether you put in more expensive or less expensive faucets, you’ll be in that $5,000 range. When you go to the master bathroom, it’s actually a $10,000 range, because there are more variables, and the size of master bathrooms varies a lot more than a full bathroom. So when we say, your bathroom, I haven’t seen it yet, but it’s going to be between X and Y, that can disarm the conversation. A lot of times people are surprised, they say, I wasn’t quite sure it was going to be that expensive. And I politely say, that’s the same thing I say when I check out at Kroger or Publix.
00:22:02 – Rico Figliolini
Yes, yes, I can’t believe this amount of issues.
00:22:03 – John Hogan
So, and that’s just a result of inflation. But because we do so many of these projects… I’m not saying each individual project isn’t special to each individual homeowner, it is, it’s your home, it’s your baby. However, despite the dimensions of your master bathroom differing slightly from your neighbor’s, or someone else’s in Johns Creek, what we do is exactly the same. We lay tile the exact same way, we install the bathtub, we put in the shower, we put in vanities. Even though each item’s size may be a little different, we have the same workflow process and the same quality standards. We’re able to provide a uniformity of quality that almost nobody else can, and it’s because of the volume we do. And please don’t take that to mean we do things haphazardly, because we do so many. That is exactly not the case. We have dedicated teams, one week they may be putting in a $250,000 bathroom, and three weeks later, they finish that project and they’re doing your $4,000 half bathroom. These are very capable teams, and they go from one project to another.
00:23:42 – Rico Figliolini
And it’s always the same crew you’re working with? There’s some uniformity, or consistency, to that?
00:23:49 – John Hogan
Oh, you’re absolutely right. First, we have many crews, we’re typically installing 20 to 25 jobs, we’re on site in 20 to 25 locations at any one time. However, for each place where we are, which could be your home, there is a single crew assigned to your job, and that single crew comes every single day until the job is finished. You’re going to spend a lot of time with the designers designing your project, but you’ll spend more time with the installation crew, and you’ll know them a lot better. They’re great guys. And very often there are long-term relationships that start and persist with our installation teams, usually three to five guys, not only because they’re in your home for a number of weeks, but because they’re good guys. Our propensity for homeowners to call us back for a second, third, or fourth project is actually quite great. So after three or four projects, we’re like family to them, we go out to dinner with them and all that. So that’s awesome.
00:25:04 – Rico Figliolini
I mean, to be able to have that consistent presence and trust-building.
00:25:10 – John Hogan
Trust, there’s that word again, trust.
00:25:11 – Rico Figliolini
Yes, because you’re letting people into your home. You might have kids in your home, dogs, cats, valuables. So you want to be able to trust that whoever’s coming is going to do the right thing, and you don’t have to keep an eye on them all the time. You don’t have to be the live-in foreman on the job, because they know what they’re doing. And going back a little bit to what you were saying about pricing, about asking what’s your budget, what are you thinking… I think people are afraid sometimes of sharing that, for really no good reason, because you could always walk away. If you feel it’s too much out of your budget, and you need a different level, maybe less than what John gives, you can just walk away. But at least you’re giving yourself the opportunity to say, okay, this is my budget, let’s see what we can do, how we can maximize it.
00:26:09 – John Hogan
Let me answer a question that you didn’t ask, but it brings this whole thing together. What people will never say, but what they’re thinking when they walk through the door of my showroom, is that what they really need is a guide. They need a guide. It makes me think of some investment company, I forget the name right now, but their whole tagline is, ‘we do better when you do better.’ Basically what they’re saying is, we’re fiduciaries, so there’s independence, and we’re on the same team as you. In remodeling, because of the things I’ve referenced before, everybody has scars, everybody’s received some sort of substandard service, so everyone has their guard up. What everybody’s looking for is that guide. They think it doesn’t exist, but everybody’s looking for a guide who’s actually going to help them, instead of just trying to sell them something. They’re looking for someone to say, you know, everybody has beige bathrooms, everybody has beige houses in North Atlanta. Everything was built in the ’80s, the ’90s, early 2000s, and the builders just painted everything beige. Travertine tile, beige, beige, beige, and jetted tubs. So what people are looking for right now… they’re not professional interior designers. We’re doing a project for a professional basketball coach, we’ve done projects for nuclear submarine commanders, secret service agents. Everybody is at the top of their game. We’re in North Atlanta, everybody is a senior executive, a business owner, small or medium business. Everybody’s at the top of their game in their industry, but they are not interior designers. So what everybody is looking for is somebody who will be an honest guide. In their ocean of beige, when they go home, they know they need to update, but what is it they should do? What color can they paint the room, or the bathroom, without jeopardizing the consistent color throughout the house? They’re looking for honest design advice. Maybe they’re taking down a wall, maybe they’re not, but what do they do if they take down the wall? How do they repair the floors, that honey oak that’s discolored? Do they stain it a different color? Are they taking a risk? Are they going to spend $50,000 or $100,000 on this project, and then try to show it off to their neighbor? Their neighbor’s going to walk in and say…
00:29:06 – Rico Figliolini
What did you do here?
00:29:07 – John Hogan
What I want is people to say, ‘oh my gosh, this is so amazing.’ So they’re looking for a guide, and that’s how we’ve structured our business here. We have different resources available for homeowners. Everybody needs a guide, everybody needs decorative design, colors, textures, lighting, everybody needs that. Everybody needs spatial design, too, a very different thing. Spatial design is figuring out where we can relocate things inside the kitchen so there’s better flow. Most 1990s kitchens have a big peninsula that traps people, there are logjams whenever there’s a family event. And of course, everybody wants that big island, better flow for larger groups. The island also serves a multi-function purpose: kids can do homework there, you can do casual dining, it can be the buffet when you have people over. So we’re designing all of that, that’s spatial design. Spatial design in bathrooms can revolve around freestanding tubs, more storage, whatever, we’ve got lots of solutions for that. But what people are looking for, and they don’t know this, is a guide. And the second part is, people don’t know this either, they need everything all at once. Because if you do this sequentially, you go to a granite company, a countertop company, then a cabinet company, then a tile company, then furniture, you’re six months down the road, and where are you with your project? Nowhere, you’re overwhelmed, because you don’t remember what you saw in month one, and now you see something you like in month six. So you need everything all at once. So we have a process here called Designalytics, and it happens in this room. We go out and assess the mathematics of your room, kitchens, bathrooms, anything on the first floor. Everything starts with precise measurements of where we’re starting from. We do a complete photographic record: what are the colors, the textures, what does your house look like? Is it heavy traditional? Honey-colored floors? Are the banisters white pickets, or have you upgraded to metal? So we have a complete pictorial history, and the mathematics of the sizes of every room, window, door, everything. That’s our starting point. And only when you know where you’re starting from can you really give good consultation, be that guide for somebody. Then we start assessing where you want to get to, and we build a realistic plan with measurements and real cost line items. We have a policy in this company: we give no estimates, we give quotes. The difference between a quote and an estimate is that an estimate is the figment of somebody’s imagination that can be altered at any time. And that’s where homeowners get into a lot of trouble.
00:32:36 – Rico Figliolini
I like that.
00:32:37 – John Hogan
A quote is something based on preciseness, measurements, and exactness. And this is my instruction to my team: whenever you offer a quote, you’d better be darn sure it’s 100% accurate, because somebody could sign it, and if you sign it, we’re obligated to do the project for that precise amount of money. There’s no going back to the well, you have to do it at that exact figure. So we put a lot of work into the front end of our quotes.
00:33:10 – Rico Figliolini
So you’ve got a process here, the team does all the work, you have software to work with the pricing and all that. So this Designalytics process, you go out, get the information, listen to what they want to do, and then present 3D photorealistic renderings of exactly what their ideas are, with exact quotes and exact job schedules. Let’s say there’s an A, B, or C version, do they get a quote and a schedule for each one of those? Can I ask this, because I ask everyone this: AI is out there, right? Does AI come into use, to be able to do some of these renderings? Are you using that at all?
00:33:52 – John Hogan
AI is new for this type of an application. I think in the coming years, it’s going to be more useful. There are some AI tools out there that can help with some broad-brush coloring, if you wanted to change the flooring, you upload a picture, and you can change the flooring and see what it looks like. But when it comes down to the precision of how much flooring needs to be ordered, or the precision of cabinet placement, in homes in Johns Creek or anywhere in North Atlanta, where homes start at $600,000 or $700,000 and go up to $2 million-ish, each cabinet costs a different amount of money because of different attributes and storage capabilities. So that’s where AI, maybe in a few years, can be helpful. But right now, it’s very much a craft done by a professional cabinet designer.
00:35:01 – Rico Figliolini
John, can you share with us a customer experience you’d want to share with the audience, maybe about someone who came in anxious? Anything that comes to mind, a true-to-life experience someone had with you?
00:35:17 – John Hogan
Absolutely, it’s easy, because there are so many customers who come through here. Let me first describe a customer type. When somebody comes in the front door for the first time, they see a 10,000-square-foot showroom, and they can see that we have everything. The first feedback we get is, ‘oh wow, you have everything here, I’ve just wasted the past three weeks trying to find… there are specialty stores everywhere, but I never found one company that does everything.’ And then they find out we install everything too, we don’t just sell products, we install everything. And then they almost fall over and say, ‘you mean you can do all of this for me?’ So that’s a typical experience. There are fewer and fewer kitchen and bathroom showrooms open, and even the ones that are out there are getting smaller, whereas we did the exact opposite, we went from 3,000 square feet to 10,000 square feet, because the need is just growing. But let me get to a particular one that comes to mind. This is a project we finished about 30 or 45 days ago. It was a customer who started with the kitchen, but the kitchen naturally led into their great room, where there was a wet bar, and then a sunroom. And while we were doing our typical Designalytics consultation with them, they wanted to know if we could take a closet and part of a storage room and make it a full bathroom. So the project scope started to grow. And what goes through their minds, as they understand how we work, is trust, that’s why the scope grows, because it’s about trust. And in this particular case, this is what is important to the listeners of this podcast: when you’re dealing with a company, and I’m not the only one that’s been around for 15 years, there are others, the level of experience, the years a company has been in business, is incredibly important. I’ll relate it to this story. We started to dismantle some walls. They had this texturing that was popular in the ’80s, where you’re taking a very thick paint, there’s almost sand in the paint, and it’s almost like you’re stuccoing the inside of your house. I think Ralph Lauren had something like that.
00:38:20 – John Hogan
So anyways, it’s impossible to deal with. So basically, we just take off the sheetrock and re-sheetrock the walls. We’re doing that, taking apart a wall, and what we found is that the previous homeowners had termites, the termites are gone, but they had eaten through the two-by-fours and the joists, to the point that the structural integrity of the home was jeopardized. Somebody had gone in and identified it, but instead of fixing it, they just covered it up. So now we’re faced with some structural work to do: two-by-fours, two-by-tens. And this is what everybody needs to know: when you hire a company with deep bench strength, with 10 or 15 years of experience, a situation like this is no big deal at all. Two-by-fours cost three or four dollars at Home Depot, two-by-tens are a bit more expensive. It probably delayed the project by two days, and it was two or three thousand dollars of additional expense they didn’t expect. But when the homeowners saw that, they were appalled.
00:39:46 – Rico Figliolini
Yeah, they were appalled.
00:39:47 – John Hogan
They were scared, their whole house was torn up, and they’re thinking it’s going to be $30,000, that we’re going to have to bring in cranes or something. But we were able to call in one delivery from a lumber yard, and two days later, they’re looking inside their walls, and the work is just immaculate, the placement of all our framing members. And life goes on.
00:40:17 – Rico Figliolini
I like the way you put that.
00:40:19 – John Hogan
It’s just very simple when you have the bench strength, and that’s what everybody has to be more focused on when choosing a company for their projects. It’s not just about the price. Let me go down a little side trail here, this is something that amazes me, I use this analogy all the time when people walk through the front door, the husband and the wife. I compare it to this: when a husband reaches a point in life where he can afford a $150,000 or $200,000 car, he knows the engine displacement, the size of the tires, the battery, the electric motor, the input to the rear wheels, he knows everything about that car, everything. When the same couple decides to spend $150,000 or $200,000 on their house, they talk to their neighbor about Joe, who has a pickup truck they see driving around the neighborhood every so often. They heard he did a good job a couple of years ago at the house down the road. And then there’s a workmate who knows a guy, and someone from church whose son’s neighbor knew of a guy. And then they hire one of those guys. They didn’t check the Better Business Bureau, they don’t really know how long he’s been in business, they know almost nothing about him. It’s the same $150,000 or $200,000, but there’s little or no due diligence. It ties into what we started with: information asymmetry. That doesn’t mean it’s impossible to get information, it just means it’s not easy to get. Now let me relate it back to this story. We’ve been in business so long, we’ve got 50, 75 installers we deal with on a daily basis, and this type of thing is just a non-issue. It would have stopped any TV show, I bet.
00:42:34 – Rico Figliolini
Yeah, next episode. But it just really isn’t a big deal, because the people who hired us…
00:42:37 – John Hogan
They hired our bench strength and our experience, and that’s their insurance policy for whatever amount of money they’re spending, whether it’s $5,000, $200,000, or $300,000. A homeowner’s first objective should be safeguarding whatever amount of money they’re spending. And it’s more important, if a contractor is 5% more expensive on a $20,000 project, isn’t that more important than potentially losing all $20,000? And I’m telling you, it happens all the time.
00:43:26 – Rico Figliolini
Oh, I bet. And I’ve seen people do that, go down that rabbit hole based on price, and all of a sudden it’s costing them way more money than the initial estimate. So there’s something to be said about having experience. I see that all the time when people get laid off, they’re laying the wrong people off, the experienced people, in different industries, and you can’t get that back, and that saves a lot more in time. John, this has been a great conversation, I loved walking into the showroom, had a good experience.
00:44:03 – John Hogan
I’ve enjoyed it.
00:44:03 – Rico Figliolini
And I appreciate talking to another Northerner too, although… something’s fine.
00:44:08 – John Hogan
I’m not going back.
00:44:08 – Rico Figliolini
It’s been… yeah, the South is cool. But everyone, BK Galleria is where we are, right at the edge of Alpharetta and Johns Creek, just on the borderline. And you guys do quite a few homes in Johns Creek.
00:44:22 – John Hogan
Probably 30 to 40% of our business is in Johns Creek.
00:44:28 – Rico Figliolini
So visit them, check out the website, we’ll have links in the show notes. If you’re watching this on Facebook or YouTube, feel free to share it. And if you’re listening on Apple or Spotify, leave us a review. Again, John, appreciate you being with me. Thanks so much. Thank you guys, hang in there with me. And everyone else, again, check the show notes for additional information and share it with your friends. Appreciate you all being with us.
00:44:45 – John Hogan
Thanks so much.
00:44:57 – Rico Figliolini
Thank you.
