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 the Q3 2016 Market Predictions Survey.
Since we began the survey back in 2008 we’ve seen significant gains in confidence in the market and overall business performance. In this review, we’ll cover the results for how our respondents feel about the current state of the market, how they expect the market to change, how they expect their company performance to change, long and short term business strategies, and trending and waning trends.
Current State of the Market
When we ask respondents about the current state of the market, we ask them to rank it either “Excellent”, “Good”, “Fair”, “Poor”, or “Horrible”. As we headed into 2016, we saw a slight dip in “Excellent/Good” responses around the state of the market, from 75% in Q4 2015 to 74% in Q1 of 2016. Positive sentiments increased from 74% in Q1 of 2016 to 81% in Q2 of 2016.
In Q3 of 2016, positive sentiments decreased from 81% in Q2 to 77% in Q3. Results showed that 77% of our respondents felt that the current state of the market was in either good or excellent condition. This is a 3% improvement from 74% in Q3 of 2015 to 77% in Q3 of 2016.
Expected Change in the Market
We asked the respondents to share how they thought the market would change on a scale of “Significantly Improve”, “Improve”, “Remain the Same”, “Decline”, or “Significantly Decline”. Over half of the Q3 2016 respondents (63%) expect the market to “Remail about the Same,” while 24% anticipate the market to “Significantly Improve” or “Improve.” There was an increase in expected market decline from 10% in Q2 of 2016 to 13% in Q3 of 2016.
Expected Change in Company Performance
In keeping with the trends in expected change in the market, positive sentiments towards expected change in company performance have been down quarter over quarter as well as year over year in 2016. Positive responses dropped 12% to 64% in Q2 of 2016 from 76% in Q1 of 2016 from respondents who indicated “Significantly Improve” or “Improve”
Sentiments continue to decline in Q3 of 2016. There was a 5% decrease in positive responses from respondents who indicated “Significantly Improve” or “Improve” from 64% in Q2 to 59% in Q3 of 2016. There was also a 5% increase in respondents who indicated that they expect company performance to “Significantly Decline” or “Decline” from Q2 of 2016 (3%) to Q3 of 2016 (8%).
We asked respondents what new trends they are seeing in the industry. The three most common emerging trends we saw were:
- Customers are choosing high-end finishes
- Homeowners are committing to large-scale projects
- Interior and exterior contemporary design
“Customers are buying what they want. Some clients are even holding back start dates in order to afford higher-end products. “
The most common waning trend this quarter is that homeowners are no longer choosing the lowest cost option and they are making the most of their square footage. Trends that are on their way out:
- Large bathtubs, especially in the master bathroom
- Customers choosing the lowest cost option
- Formal living spaces and dining rooms
“Our customers are not afraid to pay a little more for a quality product and workmanship.”
“Customers seem to be trending away from choosing the cheapest option over the option that will give the best results.”
Respondents reported that the labor shortage is still a prevalent problem. Many are focusing on recruiting and hiring industry professionals in the near-term. We reported the same results in our 2016 Q2 Market Predictions Survey Results.
Labor shortage – we are continuously hiring and training new people because there has been a higher turn over and a shortage of quality laborers.
Other near-term strategies include:
- Customer satisfaction and service
- Increased efforts in marketing and advertising
- Streamlining business procedures
We are making a very concerted effort to reach out to our past clients on a very frequent basis. We’ve already gained their trust and they have experienced the value of our services.
Similar to last quarter, respondents long-term strategies mirrored their near-term strategies. Many are focused on developing a focus on marketing, advertising, and internal operations.
We have rebuilt every department of our company with company culture, vision, and people in mind. We have focused on defining and measuring healthy culture, as well as properly onboarding and training new people.
Building brand awareness through online marketing, social networks, standard media and giving back to the community is important to us.
We are constantly improving systems and procedures to provide an exceptional experience and streamlined productivity.
Other long-term strategies included:
- Recruiting, hiring, and training employees
- Customer service and satisfaction
- Business growth
Below are a few additional comments from our respondents that we thought encompassed their overall struggles and successes.
It is a strong remodeling market. We are getting the customer to commit to pay us prior to providing a site visit to the client’s home.
We saw our best sales years in many in 2015. Our volume has increased significantly but we are having difficulty finding as many skilled craftsmen as we could use. We expect the leads to continue to flow and business to keep a steady but improving pace.
Our industry is struggling severely to identify and retain subcontractors within many trades. This issue is causing us to struggle more than we should be and challenges our ability to compete with the large neighborhood builders.
We feel that due to there being more available information out there, whether it being through television or the internet, people are becoming more interested in having things done right rather than fast and cheap. We see the difference in the level of commitment in clients that engage with us, as well as the types of questions and conversations we are having with potential clients today.
One of the greatest challenges facing building and general contractors today is the available pool of qualified trade contractors and employees. We believe it is crucial to develop and maintain a culture of personal and professional growth, and an environment where systems and processes are integrated to support that growth, and encourage a long term commitment of all team members.