Are your customers telling you the whole truth?
Each quarter, we send out our GuildQuality Market Predictions Survey to over 5,000 people in our community of quality to get a clear picture of the current state of the market. This report contains a summary of the feedback we received from our Q4 2016 Market Predictions Survey.
Since we began this survey back in 2008, we’ve seen rather significant gains in confidence in both market performance and overall business performance. In this review, we’ll examine the results indicating how our respondents feel about the current state of the market, how they expect the market and their company performance to change in the upcoming year, what their long and near-term strategies are, and which industry trends they believe are rising and waning.
Current State of the Market
When asked about the current state of the market, participants selected one of the following terms for their response: ‘Excellent,’ ‘Good,’ ‘Fair,’ ‘Poor,’ or ‘Horrible.’ Back in Q2 of 2016, the number of ‘Excellent’ or ‘Good’ responses rose from 74% in Q1 to 81% in Q2 of 2016. However, positive sentiments decreased 5% the following quarter (Q3 of 2016) to 76%.
In Q4 of 2016, 77% of our respondents (up from 76% in Q3) felt that the current state of the market was in either ‘Good‘ or ‘Excellent’ condition. This quarter’s figure (77%) is a 2% improvement from 75% in Q4 of 2015 and a 3% improvement from 74% in Q1 of 2016.
Expected Change in the Market
We also asked respondents to share how they thought the market would change (‘Significantly Improve,’ ‘Improve,’ ‘Remain the Same,’ ‘Decline,’ or ‘Significantly Decline’) in Q4 of 2016. The number of ‘Significantly Improve’ and ‘Improve’ responses nearly doubled in Q4 of 2016 (47%) compared to Q3 of 2016 (24%). Likewise, those who expected the market to ‘Significantly Decline’ or ‘Decline’ decreased as well; down to 4% in Q4 of 2016 from 13% in Q3 of 2016. The percentage of respondents who indicated that the market would ‘Remain the Same’ also declined in Q4 of 2016 to 49%, down from 63% in Q3 of 2016.
Expected Change in Company Performance
Up until Q4 of 2016, positive sentiments towards expected change in company performance have been down quarter after quarter as well as year over year in 2016. For example, positive responses (i.e. the number of respondents who indicated ‘Significantly Improve’ or ‘Improve’) dropped 5% in Q3 of 2016 from 64% (in Q2) to 59%.
However, positive sentiments significantly increased in Q4 of 2016. The number of respondents who indicated ‘Significantly Improve’ or ‘Improve’ was 74% in Q4 of 2016, up 15% from 59% in Q3 of the same year. Likewise, the number of respondents who indicated that they expect company performance to ‘Significantly Decline’ or ‘Decline’ in Q4 of 2016 decreased to 3%, down 5% from Q3’s 8%. ‘Remain the Same’ responses also declined in Q4 of 2016 to 24%, down from 33% in Q3 of 2016.
We asked respondents what new or existing trends they saw more of in the industry in Q4 of 2016. The three most common emerging trends were:
- Clean and modern interior design, neutral colors (primarily white & grey)
- Outdoor living areas
- More expensive, higher quality products
Customers are willing to spend more money on projects that drastically improve their living spaces – especially outdoor living spaces.
We also asked respondents which existing trends they saw less of in Q4 of 2016. According to their answers, here are the trends that they believe are on the way out:
- Energy efficient or ‘green’ fixtures, appliances, etc.
- Ornate or complex designs, especially in kitchens and bathrooms
- Formal living spaces and dining rooms
The idea that every appliance or fixture must be ‘green’ is definitely lesser than it was several months ago. With that said, more homeowners are purchasing higher quality products, which are in turn more energy efficient anyways.
More and more customers are knocking down kitchen, dining, and living room walls to create one open living/dining/entertaining space.
Once again, respondents reported that the qualified labor shortage continues to be a rather large problem. Like Q3 2016, many are focused on recruiting and hiring industry professionals in the near-term, as well as providing better training to new hires. We reported similar results in our 2016 Q3 Market Predictions Survey Results.
Qualified labor shortage – hiring and retaining qualified staff continues to be our most pressing challenge. We’re using a recruiter, increased our visibility, and emphasized our company’s values in hopes to attract the highest quality candidates.
Other near-term strategies include:
- Increased marketing and advertising efforts
- More thorough training for employees
- Improving business processes and communication
In today’s market, word-of-mouth marketing simply doesn’t suffice, which is why we’re putting greater efforts and funding into our marketing program.
Similar to last quarter, respondents’ long-term strategies mirrored their near-term strategies. Many focused on improving marketing, advertising, and communication initiatives.
To create brand awareness and strengthen relationships with our exisiting customers, we’re focused on providing consistent messaging that speaks to our target audience.
Building brand awareness through online marketing, social networks, standard media and giving back to the community is important to us.
Other long-term strategies included:
- Hiring the most qualified employees and paying them well
- Investing in better technology
- Increasing the number of services or products offered
Below are a few additional comments from our respondents that we thought encompassed their overall struggles and successes.
One of the biggest challenges professionals in the home building and remodeling industry face today is employee turnover. In response to this issue, we hire only those who are absolutely dedicated and qualified for the position, we provide continuous training, and we communicate with our entire team every day to ensure we’re all on the same page.
People are willing to spend more now than they were a few years ago. Whether it’s an appliance, flooring, siding, etc., people want the finer, better quality product, even if the price is much higher.
Going into 2017, there was a lot of uncertainty everywhere. Now that the election is behind us and we have a better idea as to what to expect this year, we can get back to whatever we consider the norm and make a plan for the future.
Communication is absolutely key when it comes to retaining customers. We treat our customers like family and we explain each process or procedure every step of the way, even if it seems redundant.