Are your customers telling you the whole truth?
Each quarter, we send 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 First Quarter (Q1) 2017 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 Q3 of 2016, the number of ‘Excellent’ or ‘Good’ responses fell from 81% in Q2 to 76.5% in Q3 of 2016. However, positive sentiments slightly increased the following quarter (Q4 of 2016) to 77%.
In Q1 of 2017, 84% of our respondents (up from 77% in Q4) felt that the current state of the market was in either ‘Good‘ or ‘Excellent’ condition. This is the highest percentage of ‘Good’ or ‘Excellent’ responses (regarding the current state of the market) we’ve ever received; 84% is a 10% improvement from 74% in Q1 of 2016, a 9% improvement from 75% in Q4 of 2015, and a 40% improvement from 44% in Q1 of 2012.
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 Q1 of 2017. After nearly doubling the number of ‘Significantly Improve’ and ‘Improve’ responses in Q4 of 2016 (47%) compared to the Q3 of 2016 (24%), the number of ‘Significantly Improve’ and ‘Improve’ responses in Q1 fell 5% to 42%. Fortunately, those who expected the market to ‘Significantly Decline’ or ‘Decline’ decreased as well; down to 3% in Q1 of 2017 from 4% in Q4 of 2016. The percentage of respondents who indicated that the market would ‘Remain the Same’ decreased in Q1 of 2017 to 35%, down from 49% in Q4 of 2016.
Expected Change in Company Performance
Positive sentiments regarding expected change in company performance continued to rise in Q1 of 2017. The number of respondents who indicated ‘Significantly Improve’ or ‘Improve’ was 83% in Q1 of 2017, up 9% from 74% in Q4 of 2017. This is the highest figure we’ve seen since Q1 of 2015 (84%)! Not surprisingly, the number of respondents who indicated that they expect company performance to ‘Significantly Decline’ or ‘Decline’ in Q1 of 2017 decreased to 1%, down 2% from Q3’s 3%. ‘Remain the Same’ responses also declined in Q1 of 2017 to 16%, down from 24% in Q4 of 2016.
We asked respondents what new or existing trends they saw more of in the industry in Q1 of 2017. The three most common emerging trends were:
- Renovations to accommodate aging adults or multi-generation families
- Open-concept kitchen and living areas
- High-quality products and finishes
More and more adults 65+ are staying in their homes longer or moving in with their adult children, requiring certain renovations and accomodations to be made (i.e. apartment-style basements, one-level living, etc.).
We also asked respondents which existing trends they saw less of in Q1 of 2017. According to their answers, here are the trends they believe are on the way out:
- Formal dining rooms
- Large, oversized rooms or entire homes (quality over space)
- Stand-alone bathtubs (especially in master bathroom)
Square footage is becoming less important, whereas the quality of products and finishes is increasingly important. Buyers don’t want large, cheaply-built homes anymore.
Formal dining rooms are even less popular this year; families want their eating and living spaces combined.
For the third quarter in a row, respondents reported that the qualified labor shortage continues to be a rather large problem. Like Q3 and Q4 of 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 Q4 Market Predictions Survey Results.
Our biggest challenge continues to be finding quality craftsmen; we’re working tirelessly to ensure that those we do hire are absolutely top-notch and receive appropriate training.
Other near-term strategies include:
- Improving customer service and overall communication
- Focusing on the customer (i.e. understanding their needs, listening to their feedback)
- Better educational marketing
In addition to maintaining the highest level of customer service, we understand our crew also needs to be happy, so we’re giving out more bonuses, hosting more events, and checking-in with them on a regular basis.
Similar to last quarter, respondents were most focused on improving marketing, advertising, and communication initiatives in Q1 of 2017.
Having a strong online presence is really important in today’s market. We’re now using social media marketing and we’re making our website mobile-friendly.
To us, advertising is crucial. We want our business to be known throughout the city, and when people see our sign, hear our name, or find us online, they know exactly what we do.
Other long-term strategies included:
- Better employee training and education
- Hiring better-qualified employees
- Strengthening online/digital presence
Below are a few additional comments from our respondents that we thought encompassed their overall struggles and successes of working within the residential construction industry.
We sense a boost of confidence in the economy. Customers seem to be less concerned about the future and willing to sign on to or proceed with bigger projects.
Today, customers expect better customer service and higher quality products, even if that means a higher price or longer project time.
Providing customers with exceptional customer service is increasingly important for all business types. If a customer experiences poor customer service, you better believe they’re going to communicate their unhappiness somehow – either to the business directly or online for everyone to see.