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Susan Marvin Sees Through the Recession

Marvin Windows and Doors won't change its "premium" identity in response to a punishing market.

Susan Marvin Sees Through the Recession

In the old days—just a couple of years ago—Marvin Windows and Doors, where Susan Marvin is president, had plenty of customers who wanted Marvin, only Marvin, and nothing but Marvin products. The company had built a reputation for doing high-end and custom work. If it had to bid for jobs, it typically faced only a few competitors.

Now, Susan Marvin says, every millwork company in town knows about every construction permit: “There are so few pulled, everybody is all over them.”

Even worse, people just aren’t building the kind of high-end homes that they used to—homes that were tailor made for Marvin’s premium products. “Even if they have money, there’s a psychological pullback. It’s a very different market,” Marvin says.

But she’s not interested in making her 97-year-old family business into a different company to compete in this new market. Marvin windows and doors are not found in big-box stores like Lowe’s or Home Depot, and they are rarely used in big developments such as those put up by Pulte. “Our customers are smaller independents” Marvin says, “lumber dealers, home stores, and window dealers whose customers in turn are independent remodelers and custom builders who will build between one and 25 homes per year.”

One of her company’s largest competitors, Andersen Corporation based in Bayport, has “gone very vertical,” Marvin says. “They have a window at every price point.” While the current economy creates pressure to follow suit, that would be allowing a relatively short-term crisis to cloud her company’s long-term vision of itself. “That takes you down into a market that we’ve chosen to stay away from,” Marvin says. “We’re a premier supplier, not a commodity supplier. We’re really good at marketing premier products. We’d be lost if we got into the commodity market.”

So, in an environment that offers slim opportunities—“the lowest levels of new construction since World War II,” according to an analyst at the Harvard Joint Center for Housing Studies—Marvin Windows and Doors is voluntary slicing away and rejecting much of the potential business that’s out there. It’s not because the company expects a quick economic recovery. It’s because the company knows what it is.

Last March, at a quarterly all-employees meeting at Marvin headquarters in Warroad, Susan Marvin didn’t sugarcoat her message: “I essentially delivered the news that we see no indication of a turnaround—and that there’s no reason to think it’s going to improve any time soon.” She was interrupted several times by applause. “Just when you’re expecting people to get really frustrated or mad or sad, you get a very different response,” she says.

Marvin Windows and Doors has closed no facilities and made no layoffs to help it through this downturn. Instead, the company is relying on innovative products, adherence to its brand and core abilities, and the support of its work force and community to see it through to better times.

“I’ve Gotta Have That!”

The scent of sawdust hangs in the air outside the Marvin plant in Warroad. Inside, employees fashion windows of every type and size: awnings, casements, bays, gliders, double hungs, tilt turns, and elegant round tops.

In 1939, when the company was just a local lumberyard, yard manager Harry York asked for a DeWalt saw so he could make sashes for barn windows in the slow winter months—and Marvin’s window business was born. In 1979, Marvin reintroduced the round-top window to the residential and commercial marketplace, thanks to the ingenuity of a factory employee who also was a boat builder and knew how to bend wood.

“A lot of the people we hired were either farmers or commercial fishermen,” says Susan Marvin. “And these were very independent people who were used to figuring things out on their own. If one of their machines broke down, they couldn’t call maintenance; they’d fix it themselves!”

Today, Marvin says, her company is counting on its homegrown ingenuity even more to carry it through hard times. “There’s not a lot of business out there, and we’re never going to be the lowest bid,” Marvin acknowledges. “And if you can’t be lowest bid, then you’ve got to be best value. And best value comes in the form of features and innovation and those things that people look at and say, ‘I’ve gotta have that!’”

Her company’s biggest recent introduction—the Ultimate Casement—has “gotta have that” appeal, she says. “There are maybe half a dozen features that come together to make that window a ‘wow’.” She calls one an industry first: The window can swing inward 140 degrees, not just outward, so you can wash the outside while standing inside. “Customers really respond to that,” Marvin says. Another “wow” is scale. The window can be ordered in any size up to 40 inches wide and 92 inches tall. “It looks larger than most doors,” Marvin says, but “you can crank it open, smooth as silk.”

Other distinctive Marvin products include picture windows that look stationary but push open, transparent screens, and French doors and swinging patio doors that have low-profile sills (important for people with disabilities). Dozens of product features are aimed at enhancing energy efficiency, views, and ease of installation. Energy efficiency is a must-have these days, Marvin says, especially given new federal tax credits for replacing windows and doors, part of the economic recovery act passed by Congress this year.

 

“You can’t get numbers on the replacement market nationally, but it is probably the healthiest of all the segments,” Marvin says. In better times, her company estimated that 55 percent of its sales were for replacement, remodeling, or renovation projects, and 45 percent were for new construction, but the balance has shifted even further toward replacement projects now.

One particular corner of the replacement market where Marvin has made its mark is in historic renovation. Many of the old windows at the University of Minnesota have been replaced with Marvin windows, for example. And for the Convent of St. Cecilia in Nashville, Marvin supplied approximately 440 custom-built windows in a large variety of shapes and sizes, including 22 windows with an angel-wing design.

“Some of our more noteworthy competitors are unable to address that market’s needs, or just don’t bring the service and product package together as well as we do,” Susan Marvin says. “We’re really good at it.”


From Switchboard to President’s Office

George Marvin started the Marvin Lumber & Cedar Company in 1912. His son, Bill (Susan’s father), led the company from 1960 to 2001. Under his leadership, Marvin’s window business grew exponentially, first serving the new-housing boom after World War II, then expanding into the replacement and historic-renovation segments.

Marvin touted its unusual practice of making every window and door “to order,” rather than manufacturing standard sizes for inventory. In the early 1980s, its “Made to Order” advertising campaign was misunderstood to mean that it specialized in custom work. But the company was happy to fill the custom orders that flooded in, and it soon developed expertise and a solid reputation in that niche as well.

Today, Marvin Companies, a holding company, operates three businesses: Marvin Windows and Doors (all-wood and aluminum-clad products), Integrity Windows and Doors (made with Ultrex, a durable fiberglass material that undergoes a Marvin-patented acrylic finishing process), and Infinity Replacement Windows (also made with Ultrex).

Together, the businesses have eight plants around the United States (Marvin Windows and Doors operates five, including one in Honduras). They sell products in the Americas, the Middle East, Europe, and Asia, and employ 5,000 people. Marvin Windows and Doors, the largest of the companies, doesn’t disclose its revenues publicly, but reportedly had revenues of $600 million in 2006.

Susan Marvin, 54, has been president since October 1995—thought it’s not a role she sought. Her first job, in sixth grade, was working the Marvin lumberyard switchboard. Later, in the manufacturing plant, she fitted sash parts together for nailing. “My dad said I wasn’t particularly good at it,” she says. “Maybe I missed defects in the wood or something. I think he thought I was better on the phone.”

At the University of Minnesota, she majored in journalism, with no plans to return to Warroad. Instead, she got a job in marketing at the American Hoist & Derrick Company in St. Paul, producing product catalogs and press releases for backhoes, scrap grabbers, and trenchers. She’d been there two years when her dad called and offered her a job in advertising—at Marvin’s soon-to-open one-person advertising office in the Twin Cities.

In 1985, she became vice president of sales and marketing. She says she was surprised 10 years later when the board (primarily family members) asked her to be president of Marvin Windows and Doors.

“I just know that I was talking to my brother Jake one day about how I thought certain things should be done—like I did every day,” she recalls. “And he said, ‘Well, how would you like to do those things?’” Most of her five siblings also were working for the family business. Today, Jake is chairman and CEO of Marvin Companies, Frank is vice chairman, George is taking a new role overseeing manufacturing for all businesses, and Bob is recently retired as a vice president of transportation. Peg, a schoolteacher, also has worked on the company archives and museum.

Vice President of Marketing Tom Angelis came to Marvin around that time of transition 14 years ago. “I’ve known a lot of company presidents,” he says, “and Susan is refreshing—bright, a quick study, fun. She’s passionate about accountability, and she has an incredible passion for the business, mostly for the employees and the customers. She’ll walk through the factory at 10 o’clock at night, visiting with workers in the plant. She’s the first to arrive at a customer meeting . . . and the last to leave.”


Looking for “Adjacencies”

Marvin has seen her share of challenges during her tenure at the family business, including a $2 million fine from the State of Minnesota for illegal waste disposal in 1990 (six years later, the state would honor the company for its pollution prevention efforts), and an 11-year legal battle with supplier PPG Industries, whose wood preservative allowed Marvin products to rot prematurely. Marvin spent tens of millions of dollars to replace defective windows for customers before it ultimately won more than $145 million in a court judgement against PPG in 2005.

About today’s challenges she is calm: “Business is not easy. But having said that, I think because of experience, personally I’m finding my stress level is very low. You know, I guess you learn not to worry about what you can’t control.” She laughs. “Maybe it just comes with age. It’s like, ‘been there, done that.’”

She won’t quantify in any way the effect of today’s housing-industry downturn on her family’s business. She does say, however, that all management employees have taken a pay cut, plant workers are on a 32-hour workweek, and every expenditure is scrutinized.

It would be a mistake to assume, however, that the company has hunkered down in scrimp-and-get-by mode for the duration of the recession. While it won’t go outside of its core competencies, Susan Marvin says the company is investigating “adjacencies” that it could expand into. She cites Marvin’s move into the entry-door business as an example of what she means. Marvin had long made patio and French doors, but in 2004 it purchased an entry-door plant in Honduras.

“It was a natural expansion, and we’ll look for others like that,” she says. “And we’ll look for opportunities where we can leverage our ability to work with pultrusion”—the process by which Ultrex fiberglass components are made—“which we’re really good at. And we’ll look for ways to leverage our ability in other made-to-order types of manufacturing environments. We’re good at that, too.”

Brett Boyum, director of marketing for Marvin Windows and Doors, says the company also is investing more in marketing and social media now, working to drive more of its customers and consumers to its Web site. It also has a presence on sites including Facebook, YouTube, and the DIY site eHow. Boyum points out that the fastest-growing segment of Facebook users is people 50 and older—people likely to have a home and the means to refurbish it.

Also new is the “myMarvin Project,” a marketing campaign in which renowned designers (graphic designer Milton Glaser, product and interior designer Karim Rashid, and architect and author Sarah Susanka among them) were asked to design their “dream windows,” which the company then built. The myMarvin videos, posted at marvin.com, showcase the potential of custom window design, and Marvin’s expertise in that niche.


Warroad: “A Major Competitive Advantage”

Susan Marvin stays close to the company’s marketing efforts. Each week, she divides her time between the headquarters and manufacturing plant in Warroad and Marvin’s 100-person marketing office in Eagan. She doesn’t have to rely on commercial flights because the company maintains a fleet of four shiny yellow planes. (Marvin’s signature yellow came about when Bill Marvin looked out the window one day and noticed how a yellow truck stood out from others on the road—and ordered all of his company’s trucks painted yellow.)

The planes shuttle managers back and forth, but just as often carry customers. The relationship with them is another area where Marvin won’t scrimp on resources. And oddly, the company has managed to turn its remote home base into an advantage.

About 3,500 Marvin customers a year—architects, builders, remodelers, dealers, and distributors—board a yellow Marvin plane at the Minneapolis–St. Paul International Airport. They fly up to Warroad (population 1,700), where they watch windows being made at the 2-million-square-foot factory and attend training sessions at the William S. Marvin Training and Visitor Center.

“Dealers and distributors learn how to price and sell our products,” says Angelis. “Builders learn about features and why Marvin is better. Architects learn about our products’ flexibility, and how they can specify them in their projects.”

Marvin customers also spend time at the 6,000-square-foot Marvin Museum, opened in 2005, which tells the intertwined stories of family, company, and town. They often dine with the locals in Warroad and stay overnight at the Patch Motel, run by Susan’s cousin, David “Izzy” Marvin.

“Our Warroad location is a major competitive advantage,” Angelis says. “Cities all look the same; our customers get to get away and truly learn something. They get to experience the Marvin culture, see true craftspeople at work, and meet the people of the town, who are committed to the company.” Boyum adds, “When you bring a customer up to Warroad, more often than not, they come back a believer.”

Susan Marvin says that refusing to cut back on customer relations is paying off, partly because some of her competitors are not doing the same. “It’s costing them, because their customers are now coming to us. It’s fundamental, it doesn’t change: You’ve got to take care of your customers, no matter how hard it is,” she says. “You can’t afford not to.”

Which brings to mind another reason—besides product innovation and fidelity to its brand, employees, and customers—that Marvin is able to see a way through to the other side of the recession. One of founder George Marvin’s sayings is highlighted at the Marvin visitor center and has set the tone for the company’s fiscal discipline: “Don’t buy a car until your house is paid for.” One reason why Susan Marvin can afford to serve her customers well is that Marvin Windows and Doors went into the recession with no debt.

“Clearly, there were individuals who, up until this housing depression, would have suggested we were underleveraging our resources,” she says with a smile. “And that might have been true. But today, it looks very smart.”

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