Dale Brenke – Runner Up

January 2, 2009 Daniel Vance

Business Person of the Year Runner-Up Dale Brenke helped transform Mankato home improvement company into national industry leader.

In 1971, 22-year-old Dale Brenke had wrapped up his accounting training at Mankato Commercial College and was wiping windshields and pumping petrol part-time for Bernie’s One Stop service station on Front Street across from Hubbard Milling. The $1.10 an hour pay helped—somewhat. He was actively searching for a better job, but his search had been impeded by a pesky U.S. recession affecting Mankato.

Schmidt Awning and Siding Company, and its affiliated Fireplace Shop, had company offices and a retail showroom right next door to the service station. It had begun in 1949. Robert Schmidt and his son Gary drove their company vehicles in nearly every day to purchase gasoline from the industrious Brenke. They all became fast friends. In time, Schmidt offered Brenke an entry level, part-time, bookkeeping position that would unexpectedly lead to Brenke managing the Fireplace Shop, and, in 1981, a half stake in what would later become Schmidt Siding and Window Company.

The rest, they say, is Greater Mankato business history. In 2009, Schmidt Siding and Window claims to be the nation’s No. 1 home improvement company in terms of having a greater share of its eight-county market than all other American home improvement companies have in their markets.

“I grew up in Le Sueur and lived there through seventh grade,” says 60-year-old Brenke in a Connect Business Magazine interview from his Madison Avenue headquarters building. “When I was 12, we moved from Le Sueur to a small farm and I began going to Henderson High, where I eventually graduated in 1966. For whatever reason, Henderson High changed my life completely. I became a much better student. I don’t know what it was. I played a lot of sports and enjoyed growing up there.”

Besides being employed as a full-time Le Sueur carpenter, Brenke’s father farmed 40 acres between Le Sueur and Belle Plaine. He had to work hard: Brenke’s mother had a serious illness that completely ruled out her ever working hard physically or driving a car. Brenke’s parents raised him along with his only sibling, a sister, who was eight years younger.

“For the most part, my dad was simply an hourly worker,” says Brenke. “He never really could support me financially as far as eventually helping me through college. But they were wonderful, hardworking people. In seventh grade I went out for junior high football. I also had a paper route. My dad actually did my paper route for a while so I could go out for junior high football. I was the third string quarterback and played about two plays the entire season. That is my favorite memory of my dad. He would do just about anything for me.”

After graduating, he began attending Mankato Commercial College. A few quarters in, he abruptly learned his cousin had died fighting in Vietnam. “I will never forget my cousin dying,” he says. “The wake was in St. Peter and I went by myself. It affected my life. I walked in and ended up turning around and running out.”

He volunteered for the draft, and would leave the U.S. in 1968 for a stint in Germany—rather than Vietnam. Being in the military was an interesting experience, both good and bad, he says. Elvis Presley had been in his same unit years earlier. He enjoyed touring Europe and drinking “good beer,” but throughout that time had nagging doubts about the U.S. government’s role in the Vietnam war. Due to his commercial college experience learning to type, the Army made him a logbook clerk.

When returning in December 1969, he worked for a while in the Twin Cities before migrating back down to Mankato Commercial College in order to finish his education as an accountant. Then in 1971, as the story goes, he was working part-time at Bernie’s One Stop, a Front Street service station, when Schmidt Awning and Siding Company owner Robert J. Schmidt hired him as a part-time bookkeeper. The new pay beat $1.10 an hour. Soon, he was promoted to managing the Fireplace Shop. A year later, he married, and he and his wife Patti spent their honeymoon hitchhiking around Europe. (His wife now co-owns Collective Memories antique shop in St. Peter.)

Within his first year, Brenke was asked to help out Robert Schmidt, who was legally blind and therefore couldn’t operate an automobile, on cold-call canvassing trips to generate siding sales leads. Fairmont, Hutchinson, New Ulm—they covered huge swaths of outstate Minnesota. They were a team: Brenke hoofed the streets to conjure up leads while Schmidt followed right behind selling the siding.

Says Brenke, “I learned a lot being in those homes listening to Robert sell. Canvassing was difficult for me at first, but I grew into it. It was a lot easier then than today—as a company, we don’t do it anymore. People are just so much more reluctant to answer their doors. Back then, someone was usually home during the day. Now, both partners work and they don’t want to be interrupted at the dinner table. I would canvas in the afternoons from 1:00 to 5:00. We did that only a few years.”

Eventually, in 1981, Brenke became a 50-50 owner with Gary Schmidt, when they bought out Robert Schmidt on comfortable terms that provided Robert with a nice retirement income. The elder Schmidt set up a separate agreement with Dale and Gary in selling the company’s Madison Avenue headquarters building.

“I owe a lot to the Schmidt family,” says Brenke. “They are great people and have been great to work for and with.”

Three notable changes happened his first five years in ownership—the first personal. In 1985, his mother passed away after having spent four months in intensive care at Mayo Clinic. Having his mother sick his whole life may have subconsciously enhanced his work ethic, he says. (Even today, he gets to work at 6:30 a.m. and leaves at 5:00 p.m. He still feels guilty when away from work.) The second change involved the company quitting the fireplace and wood stove business, in part due to extensive Environmental Protection Agency pollution standards, becoming solely a windows and siding company. The third change occurred in 1986, when Schmidt Siding and Window acquired an ABC Seamless Steel Siding franchise. “We were the only seamless steel siding company in this area of southern Minnesota for the next 10 years, until other people were finally able to begin buying the seamless machines,” says Brenke. “In that period, we were selling lots of windows, too. We were putting sales people on staff and were growing.”

In the mid-‘90s, the company that manufactured seamless siding machines for ABC Seamless Steel Siding had fulfilled its exclusivity agreement. Other companies could begin purchasing the $30,000 machines. Suddenly, with competition, the company had to place more emphasis on marketing. It became a Renewal by Anderson windows franchisee in 1997, now America’s only Green Seal-certified window in America, meaning they are made from recycled material and are completely recyclable.

Then the company began making whirlwind progress when a wild wind lifted company sales exponentially. “The 1998 St. Peter tornado changed our operation greatly,” he says. “We had so many customers over there with damaged homes. What was really unique about the damaged homes in St. Peter—and we’ve never run an ad saying it—but of all the destroyed homes, only one home had seamless steel siding. The steel siding homes in the tornado’s path had dents all over them and the windows were knocked out and the roofs destroyed, but only one of the dozens of our steel siding homes over there was actually destroyed. Some of our homes stood while the ones around them with vinyl siding or masonite were gone. For whatever reason, the steel did a much better job. Regardless, we did so much repair work there replacing thousands of windows. We had hundreds of homes with Gutter Helmet and siding.”

Today, Schmidt Siding and Window employs 50 year around and about another five every summer. The company can install siding and windows—and even some steel roofs—all winter. The service territory covers a “very defined” eight-county area consisting of about 220,000 people. “In addition, we’re in Sibley County just for windows and Gutter Helmet,” he says. “We’re the 174th largest home improvement company in the U.S. according to Qualified Remodeler, a magazine that lists the Top 500. We’ve been in the Top 200 the last 14 years. The top 200 remodelers, except for us, are all in larger cities. Our claim to fame is that we’re the No. 1 home improvement company in the nation in terms of market share.” Washington D.C.-based Remodeling Magazine honored Schmidt Siding and Window in 2004 as a national Big 50 remodeler in terms of remodeling quality. This was special to Brenke because of it being a qualitative, rather than quantitative award.

Four years ago, the company added residential steel roofing to its product mix. Steel and metal, unlike asphalt shingles often dumped in county landfills, are 100 percent recyclable. The company also has opened a Third Avenue facility where employees stain and varnish windows to match existing customer woodwork. Nearly all company window sales are from replacement windows, rather than new construction windows.

“It’s all about service,” says Brenke. “We have a slogan: Exceed expectations, create customers for life. We live by that creed. That’s what it’s all about. It is the culture here. There is no one here who works for me. We all work together. It’s always been that way.”

Brenke owns 50 percent of the business, while Jim Hockert and Steve Beetch each own 25 percent—they bought out Gary Schmidt in 2003. Hockert is a salesperson and Beetch manages four production managers having more than 100 years combined company experience. Brenke, Hockert and Beetch have considered purchasing dealerships in other counties but the idea of expanding outside their established area where the Schmidt brand name has marketing punch, Brenke says, “is a little scary.”

Says Brenke, “Besides the production managers, we have quite a few employees with more than 20 years experience here. That is an anomaly in our industry. When we say experience is the difference—that’s exactly what you get. Our top people came through the ranks. Our four production managers were installers and seven of our eight salespeople came up as installers, including former owner Gary Schmidt, who still works as a salesperson.” He attributes the career longevity of his employees to a company culture that promotes fairness, emphasizes the team approach, often pays higher wages than market rate, and has good benefits along with incentive programs for production people. The incentive programs are based on company installations—not individual crews.

“It’s all about having good people,” he says. “We are very selective in who we hire. People want to work for us. They see we have all these people who have been here years and years. They know we’re a good company. We have a good atmosphere.”

WHAT KEEPS YOU GOING?

“I enjoy it. One book I enjoy reading is Thank God It’s Monday. I love coming to work on Monday morning. There is so much satisfaction being around people and running a successful company. The book talks about the importance of your attitude. It says you have to be happy to go to work. I don’t have an exit strategy at this time. I’m happy and content being right here. But I now have a cabin up north and try to get a three-day weekend in every once in a while.”

THE $40,000 GRAND PRIZE

Co-owner Brenke handles bookkeeping and marketing. With the latter, he tries being innovative and always a step ahead of the local home improvement pack. This last summer, the company ran a gargantuan “$40,000 Extreme Exterior Makeover” promotion involving six southern Minnesota radio stations.

“It was the talk of the town,” he says. “We gave away a $40,000 prize. We had two thousand people coming in and had 5,000-plus registrations for the event. A person could register daily. The day we gave the $40,000 prize away we had a band, hotdogs, vendors, and we were shuttling people to and from parking at Buster’s. We had more than 150 qualifiers that had to be there in order to win. We had qualified 15 people per week all the way through the length of the contest. We had so much going on. It was fun. I emailed the publisher of a top home improvement trade magazine and asked him to come because I felt it was probably the biggest home improvement industry event in the nation’s history.”

The winner: Bridget Spencer of Mankato. She had yearned for a sunroom large enough to hold a Christmas tree. The difficult part in 2009, says Brenke, will be coming up with an event to equal or top it.

RESISTANT CUSTOMERS

Most customers calling Schmidt Siding and Window are ready to buy. “Typically, the husband and wife have been discussing the project for three to five years,” says Brenke, who joined Schmidt Siding and Window in 1971. “Most customers already have their financing in place. We do not do any hard selling. We are more than happy to go to your place, bid siding, for instance, and then have you call us in a year or two to update the bid. We don’t hard sell. When doing it that way, we gain your trust. Right now 38 percent of our business is repeat business. We have done third-generation homes and been in Mankato 60 years. Recently, one of our salespeople was at a customer’s home bidding siding. The customer’s grandfather walked in the door, and said, ‘Oh, you’re from Schmidt. You guys sided my house in 1950 for $800. And it’s great.’ You can’t buy a testimonial like that.”

Schmidt Siding and Window receives complaints about work—as any business will—but compliments outweigh complaints about 20:1, claims Brenke. “Often with a payment, I’ll get a letter thanking us for a great job. As for the complaints, I listen to the problem, and then take it to the production staff. They will make it right somehow. We bend over backwards to satisfy a customer. Again, our slogan: ‘Exceed expectations, and create a customer for life.’ You aren’t going to satisfy everyone, but you do the best job you can.”

COMMUNITY ACTIVITY

Schmidt Siding and Window has been involved—inside and outside the company—in providing timely charitable needs. For example, Justin Mack, a U.S. Army Blackhawk helicopter pilot and Schmidt’s window installer, was deployed to Iraq near Christmas in 2007. Brenke, and employees, collected and shipped Mack 70 pounds worth of personal essentials, games and other items. They also raised money to purchase Christmas gifts for Justin’s family.

Each of the last 19 years, the company has given away a $5,000 playhouse, either to a lucky customer through a drawing or raffled for a nonprofit such as Make a Wish. The company also financially donates, in part, to the March of Dimes, Diabetes Foundation, Veterans of Foreign Wars, American Heart Association, National Cancer Society, United Way, and many others.