Builder & Remodeler Market Predictions for 2011, from Q1 2001

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  • 1. Predictions & Strategies About GuildQualityThis report contains a summary of the feedback received from our North America’s best builders, remodelers, contractors, and real es-members in the Q1 2011 Market Predictions & Strategies Survey tate companies rely on GuildQuality to help them monitor and im-conducted during the week of March 21. This survey is a continuation prove the quality of their work.of the survey we began in October 2008. In this and prior surveys, GuildQuality provides customer satisfaction surveying, web-basedGuildQuality requested feedback from the owners and operatorsamong our hundreds of home builders, remodelers, contractors, and performance reporting, peer benchmarking, and performance mar-real estate developers that use our service. In each of the surveys, keting for construction and real estate companies that seek to delivermore than 100 people provided feedback. a consistently exceptional customer experience.Our members are representative of the best businesses in the build- GuildQuality offers a trial membership to all homebuilders, remod- elers, developers, and contractors. Experience GuildQuality first-ing, remodeling, and real estate profession. And just as the strengthof the building industry has historically forecasted the strength of our hand with a free trial.entire economy, I believe that our member sentiment is a leading in- Thanks to all those who participated!dicator within the building industry. We greatly appreciate your participating in the survey and welcome any comments, suggestions, or requests you have about this and future reports. To review prior reports, visit the search for “predictions” on the GuildQuality Blog. This image is the Wordle representation of the roughly 400 comments received in response to our survey. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 1 of 16
  • 2. Guildmember Confidence IndexThe Guildmember Confidence Index is a forward looking indi-cator that summarizes the predictions of the members whoparticipated in our survey. A positive number suggests thatmore members predict improvement than decline.In Q1 2011, relative to all prior quarters, considerably morecompanies are predicting improvement in both their and theirpeers performance than in any quarter since we begin the sur-vey in late 2008. Guildmember Confidence Index. A positive number indicates more people forecast improvement than decline. A negative number indicates more people forecast decline than improvement. 100% would indicate all respondents forecasted improvement; -100% would indicate all re- spondents forecasted decline. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 2 of 16
  • 3. Confidence Level Distribution Confidence Level Distribution. Guildmembers were asked to predict whether the performance of their company and the market would sig-When asked what kind of change they expect in the market in nificantly improve, improve, remain the same, decline, or significantlygeneral, 62% of members predicted conditions would either decline over the next six months.improve or dramatically improve over the next six months.Similarly 81% predict improvement or significant improvementin their own business. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 3 of 16
  • 4. Comments: Each quarter we ask companies to share their 14. Customers prefer to see employees – not subcontractors – doing thethoughts on emerging trends and their strategies for succeed- work.ing in both the near- and long-term. 15. Customersʼ priority is low price. 16. Weʼre encountering value-conscious prospects that show more interest in green-building.EMERGING TRENDS 17. Customers want more for less, smaller projects and needs rather than“What trends do you see emerging among your customer preferences?” wants1. There are long buy cycles. Customers are more discerning and picky 18. We are seeing more customers interested in remodeling, mostly kitchens once the job initiates; are also hesitant to commit (although exploring). and bathrooms. We are seeing more customers looking for custom homes.2. Customers want more custom features but expect lower pricing 19. Customers are taking out construction loans for large scale projects3. Businesses are showing a strong focus on value and customer service. We see a lot of people who are focusing on price, but they never have 20. Customers are adding in-law additions and/or space for additional family been our customers. units. Master baths are still HOT. Kitchen remodels are coming back.4. Simpler, cleaner design is popular. Customers are thinking more about 21. Smaller scale projects with maximum budgets of around $150K are trend- resale. ing, however there is much resistance over that amount. Clients still want everything for that budget and thus problems arise. Clients still very much5. There is a growing preference for energy efficiency. aware of what is out there and typically do not understand costs. Kitchen6. Customers are maximizing the value received for the budget and elimi- and bath remodels still top for projects. nating some items if they exceed it. 22. Weʼre doing more kitchen remodels.7. Customers are more focused on the value they get for their price. 23. Customers are all about saving money.8. Customers are more focused on price. 24. Customers want small square footage with more upgrades and better,9. Customers are going for simplicity vs extravagant on design and material energy-efficient floorplans. choices. 25. We are doing smaller jobs and weighing costs much more. Also, custom-10. Clients are bidding out work to an average of 3 bids. They are looking for ers are wanting several bids and less happy with the exclusive design- more value for their dollar. build process.11. Customers are updating kitchens and bathrooms with an eye on keeping 26. More and more customers want to be able to research your company the budget more conservative. They are also doing more exterior make- online, view photos of your work and – most importantly – reviews of your overs such as incorporating porches, porticos, improvement to roof lines companys performance prior to making a decision. and blending multiple exterior claddings to create more interest. 27. Customers are showing mild interest in green products, and they are still12. Customers are installing more hardwood and worried less about square very cost conscious. footage. They are doing less change orders, and tightening their budgets/ 28. There is continued interest in "sports car" homes – homes that are lowering their wish lists. smaller yet have high performance, lots of bells, more efficiency and13. Customers want their projects customized for their needs more detail. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 4 of 16
  • 5. 29. Our customers arent splurging for the high-end products for their remod- 45. Customers are getting several quotes and doing more shopping to find a eling, but are going with things that look really nice yet dont break the good deal. bank. 46. Customers are spending more on energy-efficient items.30. Weʼre still taking it slow with more interest and more leads. Weʼve had a 47. Customers are spending more on practical rather than lavish improve- split between large and small projects with not much in the middle. ments.31. Customers are focusing on high value, high return projects. 48. Customers are doing much more vetting of their contractors before mak-32. Clients are asking for more but wanting to pay less. ing a selection33. Customers are wanting smaller projects. 49. Weʼre doing more smaller projects and more functional projects rather than the ego type renovations we were seeing a few years ago.34. Customers are overly price sensitive. 50. Customers are making more practical selections.35. Customers want to decrease project costs by purchasing materials them- selves. This is true across all levels of wealth. Countertops demanded 51. Prices have become more competitive. are mostly granite. 52. Customers are still trying to get deals, often making extremely low offers36. Weʼre finding project size is increasing. Customers still want multiple bid- that are not acceptable. There does not seem to be any recognition of ding. value...it is all about the deal.37. Customers are making master suite additions, decisions to stay in their 53. Customers are demanding fiber cement siding instead of vinyl siding. existing homes and do significant remodeling and additions 54. Weʼre heading back toward larger jobs such as kitchen remodels, addi-38. Customers are cautious but have started to move ahead with projects tions, sunrooms, etc… that have been put off the last few years. 55. Remodeling jobs are becoming larger.39. Customers are demanding more kitchen and bathroom upgrades 56. Customers are focusing on price.40. Weʼre seeing more remodeling and less building. People are planning to 57. Almost all of our customers are paying for their remodeling instead of stay in their homes longer. financing.41. Customers are taking longer to decide, getting more quotes, and buying 58. Lead flow is slowly but surely increasing. High-end products are more fewer windows in the first round. They are often looking for high ranking desirable. in customer service and using the internet more and more to find re- placement windows/replacement window companies. 59. Customers want lower square footage homes at lower prices, and still want nice finishes. Location is growing in importance.42. Customers are demanding more covered decks/covered porches. 60. Market is stabilizing.43. Where last year high-end materials were not considered necessities, we are seeing more customers blending higher-end products into their pro- 61. Customers want to remodel instead of add onto. jects today. 62. Customers demanding long-term answers to solve recurring problems44. We are seeing a lot of medium sized projects (kitchens, baths, finished such as energy-efficient replacement windows and fiber cement siding basements). People also are financially "trapped" in their home, so are instead of re-painting vinyl siding. deciding to remodel to their taste and stay for a period of time. 63. Customers are wanting lower prices and small down payments. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 5 of 16
  • 6. 64. Customers are very aware of costs and are looking for the best value for WANING TRENDS their dollar. This does not mean that they are not spending money, as we “What trends are becoming less and less important to your customers?” are seeing clients choosing higher quality products and taking time to understand all of the information before making a decision. 1. Customers are no longer committing large investments. Small jobs of less than $5K are easier for them to swallow.65. Weʼre seeing more emphasis on look and style. Entry doors are a grow- ing segment because of the style options and curb appeal they add. Cus- 2. Energy Star buildings are dropping due to cost. tomers are more focused on "how it will look" than ever. 3. Customers no longer have to have something because their friends or66. Customers are preferring to pay for things with credit/financing. neighbors have one.67. The current customer is more value driven then ever. 4. BIG for the sake of big is no longer trending.68. I believe homeowners will be ready to spend more on the upkeep of their 5. Large additions to homes are not trending. home rather than selling their homes. Most people intend on living in their homes for a while. They are more knowledgeable than ever before. They 6. The “mega” size is waning. take the time to do their research online before choosing a contractor to 7. Weʼre building less large homes. perform their projects. 8. Size is no longer the driving factor.69. 1. Clients have determined they are staying in their homes and are com- mitted to remodeling and improving their homes as they plan for an ex- 9. Customers are no longer going for big, flashy and expensive. tended future. 2. Maintenance Free is on everyoneʼs mind, especially the 10. Customers are no longer adding large spaces. Over the top features on boomers. 3. We are asked more often if we offer financing options. middle to upper middle class homes.70. Weʼre doing more necessities than commodities. 11. Square footage is no longer a priority.71. Customers are focusing more on energy efficiency and paying for quality 12. Trendy materials and finishes are no longer a priority. rather than paying to get the job done cheaply over and over again. 13. Customers want significant renovation additions that add s/f. Harder to72. Customers are demanding more value for their money. access financing means customers are working with existing funds.73. Energy performance is creeping in again. My customers are moved by 14. Customers are no longer sourcing their own materials great aesthetics and solid product offerings. 15. We are doing fewer large additions which require bank/mortgage loans.74. Customers are demanding more remodeling rather than buying new. Also trendy remodeling ideas are the first to go. Outdoor kitchens, high75. Customers have smaller budgets. end closet finishing, high end products are typically first to be removed to keep budgets in line.76. Customers are focused more on sustainability and have much greater cost awareness. 16. Expensive details are less important to customers.77. Granite countertops remain quite strong, perhaps even stronger. Projects 17. Weʼre seeing less and less room additions. are growing in size, but still significantly smaller than 2-3 years ago. En- 18. Weʼre building less “showey" foyer areas (2 story foyers and curved ergy efficiency is important, but folks dont want to pay much for it. The stairs). worst trend is the tendency to go for low-bid. 19. Going green is no longer as popular as best price. Customers are settling78. Customers like to shop more. for less than their ideal project.79. Customers are more positive, but also more concerned about value. 20. Weʼre building less large spaces. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 6 of 16
  • 7. 21. Customers are not going for the commercial appliance look in their kitch- 43. Weʼre seeing quality fall in importance, unless another contractor did ens. something horribly.22. Customers are showing little interest in energy efficiency. 44. Customers want home to be livable the way they want, not concerned with overbuilding the value of their home.23. We are seeing fewer price-driven decisions 45. Weʼre seeing less big square footage jobs, and also living further out on24. We are building fewer luxury projects. acreage.25. We are not building projects with the same “bling” our prior projects had. 46. We havenʼt had one window replacement lead in over a year.26. Customers are no longer focused on quality. 47. We are seeing less high dollar luxury purchases.27. Green products have not really caught on here yet. 48. Customers are no longer going with the cheapest system. They are more28. There is less demand for a higher-level green product line on our pro- concerned with energy efficiency and quality rather than price. jects. 49. The size of the houses have decreased, and folks are still very conserva-29. We donʼt do many high ticket, luxury/want projects. tive in their spending.30. We donʼt do many large spaces or additions. People want to rework the 50. Fewer customers are checking with the BBB before purchasing. After the spaces they already have and make them more efficient. news outwardly said that companies can "buy their grade" by becoming a member, it seems to have discredited the Better Business Bureau.31. We are building fewer dining rooms. 51. People are not looking for a "quick fix" because they plan to stay.32. Customers are less likely to demand custom finish cabinets. 52. Customers are going for less fancy and obvious.33. Weʼre doing less high-end finishes. 53. Lower price is no longer a priority.34. Long term solutions seem less important. Looking for the short-term fix. 54. We are doing fewer jobs with a tub in the master bathroom.35. Weʼre seeing less luxury items like new siding for the sake of a new color or style. 55. Customers are no longer remodeling just for the visual appeal.36. Customers are no longer buying more just to have more. 56. We are doing fewer large projects or additions.37. Weʼre seeing less large, expensive, ego-type renovations. 57. We are doing less big showcase projects.38. Weʼre seeing less expensive selections.39. Quality of products purchased is waning.40. Green trends dont seem to play much of a role; nor does location seem NEAR-TERM STRATEGY to be as much of a factor. I was surprised given the increased cost of gas. “What is your business doing to address your most pressing NEAR-TERM Maybe in the next 6 months it will be more of an issue, but right now peo- challenges?” ple are willing to buy further out just to get more square footage for their dollar. 1. Doing lots of marketing.41. Everything is important to the customer. 2. Doing comparative analysis on the cost/quality of product with different suppliers in order to receive best quality for our dollar.42. Basic maintenance and repair jobs are fewer. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 7 of 16
  • 8. 3. We are really focused on making certain that our customers are abso- 22. Going to build the best plans on the best lots. lutely positively happy about all aspects of working with us. We also 23. Evaluating every single thing to cut overhead costs, and then making make certain to touch base with each of our past customers at least 4 changes. times per year. 24. Maintaining low overhead4. Taking on jobs of all types and further from our normal territory. 25. Going to promote, promote, promote.5. Most deals involve incentives. We would like to break away from them, but they are ingrained in the local market mindset. 26. Trying to educate the homeowner, informing them that going with the cheapest price isnt always the best avenue. We explain to potential cus-6. Staying in frequent contact with our circle of influence, maximizing PR tomers how we have heard or been called back because the person they opportunities and providing more upfront effort with prospective clients. hired did a below par job or they walked off the job because they ran out7. Doing sales training and marketing. of money.8. Focusing on just surviving. 27. Getting involved in social media, targeting neighborhoods and looking for growth areas. Will try TV.9. Our goal is creating additional marketing with an educational vs. informa- tional format. 28. Going for stronger positioning in design and adding resources in design.10. We plan on offering levels of design build services to appeal to everyone 29. Selling more value to our clients from simple replacement work, full gut remodeling, or large home addi- 30. Recruiting more staff. tions and remodels. 31. Controlling overhead costs. Focusing more on existing customer relation-11. Keeping our administrative costs lean, focusing on doing a great job for ships. Waiting to hire until we have 6 months of work backlogged. our clients and lots of follow-up. 32. Increased mark-up 7%12. Using private sources for construction financing. 33. We have more than tripled our marketing budget this year, and have sig-13. Trying to increase our margins. nificantly increased our participation in networking groups with great re-14. Doing careful analysis and adjustment to our margins to keep backlog sults. consistent & steady. 34. Putting together grass roots marketing programs. Using more direct mail,15. Going to keep costs down. neighborhood shows and increasing traffic on our website through multi- ple channels.16. Trying to figure out the mentality of clients expecting remodeling being 25-50% less cost while still delivering incredible service. 35. Putting more money into our web site, SEO and blog. More focused di- rect mail as well.17. Simply focusing on customer service and communication. 36. Focusing on cutting costs.18. Currently merging with another remodeling company. 37. The biggest challenge today is getting more qualified opportunities for19. Starting a new direct mail marketing campaign in new areas where we projects. Our focus has been to build our brand online with a quality so- feel there are opportunities from contractors who have gone out of busi- cial media campaign mixed with blogging, newsletters and email cam- ness or reduced their marketing budgets for those areas. paigns.20. Looking to get people into our showroom 38. Listening to what people are asking for, and making suggestions to make21. Our plan is to pray and take action. the project work for both their taste and budget GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 8 of 16
  • 9. 39. Working our past customer list harder, concentrating on marketing to 58. Focusing on overhead, efficient marketing and pinpoint advertising. specific target market, and asking for referrals more aggressively. We 59. Constantly reviewing and adapting to market competition have re-designed our website and are directing more traffic that way. 60. As with long term, we are listening to what our clients are saying through40. Trying to educate the customer on the value of their renovation project. our surveys and acting quickly on any trends that indicate that improve-41. Trying to follow up quickly and be clear in our communication. ment is needed. We are also communicating better with our client from initial meetings through project completion and working on our existing42. We are a small company so our emphasis is more and more on our web relationships and networking for referral work. presence and reviewing our processes. 61. Continuing to implement systems. Our biggest challenge is lead-time. We43. Looking for ways to run a tighter ship, cost-cutting where possible without have put a lot of focus on communicating with customers during their sacrificing quality or customer service. "wait" time for the project. Additionally we are working to shorten lead44. Hiring more office and field staff. time by installing more efficiently and catching errors from suppliers be- fore starting the job.45. Managing costs of lead generation and overhead, generating more busi- ness from past clients 62. We really need to improve our customer service and back-end produc- tion. The GuildQuality surveys have helped expose some underlying46. We shut down 3 of our 4 locations and our most pressing challenge is to problems. Now that we know what they are we are aggressively trying regain confidence with our employees about their future with the com- improve them. pany. 63. Our business is marketing ourselves and addressing the very value47. The biggest challenge we face is the pressure federal regulators are put- driven prospects. We provide reasons that make us the overall best ting on local banks. The banks are creating more expenses for the bor- choice. rower at a time that the borrower really cant afford it. 64. Working with trustworthy affiliates such as GuildQuality. It truly gives our48. Offering discounts to become more competitive. past customers a voice. GuildQuality allows past customers to give hon-49. Seeking education on several different levels. Looking for more employ- est feedback about their experiences with my company, and all feedback ees, but not until the need is actually there. is analyzed to make the next customers experience better. We also use the comments to let our past customers "advertise" for us.50. Doing more marketing and social networking. For instance, we updated our website, our company is now on Facebook and LinkedIn. 65. Aranging financing options and bringing on the very best long term prod- ucts to offer as solutions.51. Making quality important again 66. Increased and differentiated marketing. We are trying to do the social52. Advertising to capture leads. media but itʼs very difficult.53. Very active and marketing in new ways. 67. Reviewing our production process to better match what we envision the54. Creating better marketing to lower our cost per lead. customer would expect.55. Allowing customization of stock plans, introducing trendy finishes as 68. Instituted a customer experience program. standard, and doing in-house financing for qualified buyers. 69. Expanding our web presence and opening a showroom.56. Fixing internal issues. 70. Hiring more staff.57. Hiring another person for office work. Our designer is so busy she is bot- 71. Doing more event-oriented marketing such as seminars, showroom tle necking our business. May look into intern vs. employee. events, etc… to bring in stronger leads. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 9 of 16
  • 10. 72. Advertising in more direct and engaging ways, working with customers to 10. Diversifying with the kitchen and bath business. Allows us to not only feed educate them on their available choices and the costs associated with each other business but to continue to market and develop our own busi- them. ness as separate entities.73. Outsourcing, even for design. 11. Keep marketing consistent, doing great work and giving our clients a great experience.74. Marketing more. 12. Working on both hard and soft costs.75. Keeping a tight budget, yet expanding our work force to meet demand. 13. Remaining efficient and cost-competitive. 14. Substantial increase in education and consulting spending. 15. Watching our budget.LONG-TERM STRATEGY 16. Not going into more debt, reducing overhead and working from existing“What is your business doing to increase your likelihood of success in the capital.LONG-TERM?” 17. We are working on going to fixed-price bids instead of cost plus con-1. Implementing cultural shifts, maintaining pricing structure and charging tracts. for any estimate no matter how small. 18. Going back to basics – customer service and communication.2. Going to monitor the number of speculative homes we have built and not over-build in order to always keep our interest & investment rate at a re- 19. We are retiring! coverable level. 20. Continue to market/advertise effectively and constantly improve our sell-3. There is a saying, " Price, Quality, Customer Service.....Choose any two". ing processes and client communication systems. We have focused on Quality and Customer Service and let the riff-raff 21. We are expanding our footprint and trying to increase market share. fight it out on price. We are putting an extra effort on Customer Service attempting to really "wow" our current and past customers so that they 22. Doing more presales. will tell their friends about the amazing experience they had working with us. 23. Network and help others.4. Focusing on Internet marketing, SEO, Social networking, real networking. 24. Developing new floorplans that are better and smarter.5. Increasing our operational efficiency, shortening cycle times, closely 25. Cutting overhead costs while maintaining our quality, lowering prices, monitoring cash flow. taking on smaller projects than we havent done in a long time.6. Maintaining adequate capital, retaining our team and adapting our busi- 26. We are improving our website, implementing social media sites and inter- ness model to the times. linking all of our web presences.7. Doing more sales training. 27. We are doing strategic planning for the future. Planning to hire a marketing/sales director sometime in 2011.8. Just focusing on surviving. 28. Revising plans for market demand, not trying to make the market accept9. Going back to planning three years ahead and not just month to month. our existing plans, revising our lot offerings in the same way. Using a "less is more" thought process on work types to focus on niche areas. 29. We are working on putting procedures in place that will simplify the pa- perwork process and preparing a tri-fold brochure to give to prospective clients or leave on our job site signs. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 10 of 16
  • 11. 30. Our objectives are the following: Build team. Build sales skills. Build mar- 47. Continuing to stay ahead of our competitors by offering the absolute best keting. Do great game of business. service and little extras to our clients.31. Investing in the internet and longer-term productivity improvements. 48. Not sacrificing GP and enforcing policies and procedures.32. We are investing in employee training moving to a larger design center. 49. We are training ourselves and adapting our business practices to adapt to market trends that are pushing towards: improving home value and33. Steady marketing is our goal. curb appeal, improving energy and functional efficiency, maintaining the34. We have created a marketing plan, and now need to follow it. homes fundamentals, being a consulting partner to our clients, and deliv- ering and demonstrating a high level quality service. We are adapting and35. We have spent the past 18 months developing and refining our systems, increasing our marketing to address the long term trends of home owner and we have begun hiring to our organizational chart for growth. We con- concerns regarding value, efficiency, maintenance, partnering, and qual- tinue to be engaged with an experienced business coach on a monthly ity service. We are pursuing an online presence underscoring the quality basis. of our service.36. CANI- constant and never-ending improvement to all aspects of the com- 50. Added a number of new products. pany. 51. Focusing on changing our business model from 1 product offering to mul-37. Initiate a management development program. tiple products that will reach more of the market with price and quality.38. Increasing targeted advertising. Focusing on quality. 52. Getting out of the real estate market if possible. It is too difficult for the39. Pumping more money into our web site, SEO and blog. Also more fo- small developer to stay active given all the costs that have very little to do cused on direct mail. with the final product.40. Weʼre doing more networking, expanding into more remodeling. 53. More advertising, training, new product awareness.41. Long-term requires the Near-Term to be effective. Taking the near-term to 54. Solidifying processes. Looking to hire sales people. a different level and utilizing a variety of smaller campaigns to compli- 55. Branding and more marketing. Continue to build an A-Team within our ment our online strategy. We dont feel that traditional media works as an staff and constantly working on better culture. effective tool other than to compliment the branding process. 56. Focusing on what our business is known for.42. We are opening a show room in our office to make selecting materials simpler for our customers and to draw in new customers that just want to 57. Focus on customer satisfaction, expectation and acquiring referrals. look at materials. 58. Marketing more.43. Growing our service and maintenance department. With people looking 59. Reducing expenses, creating more leads, and mastering our sales proc- for the small fix until they are financially comfortable to make bigger in- ess. vestment we need to service them through maintenance contracts and leak repairs until they are ready to tackle larger projects. 60. Focusing on location, pricing and niches.44. Educating our sales force to better sell value. 61. Training, having more meetings and upgrading sales program.45. Charge what we need to stay in the game for the long haul, and educate 62. Remodeling our showroom, adding more space, preparing for growth and our staff. stability, continuing membership at Remodelers Advantage for the expert advice to sustain these difficult times.46. We have always worked by word of mouth, now we are starting to adver- tise with Kudzu. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 11 of 16
  • 12. 63. Improving company focus on goals from sales to install. Total buy-in to ADDITIONAL COMMENTS company and personal success. 1. 2011 is starting much better than 2010 for us. Our leads are over double64. Trying to increase market percentage and saturation. YTD from last year. There seems to be some new energy in the home shows. We have already signed more work from home shows than all of65. Customer satisfaction surveys, evaluating the responses and acting upon 2010 and look to improve on productivity of home show leads twenty-fold. improving in the areas identified that show a need. Building relationships that result in referral work. Improving communications from advertising to 2. Counter to the market conditions, you have to be aggressive in pushing closing the sale to completing the project and beyond. your product. Having said that, you better be offering what the market wants to purchase, not what you want to sell.66. Continuing to train our employees. Constant awareness of where we stand and what we can do better goes a long way. Utilizing GuildQuality 3. There is little new home construction in the mid-market ($300,000 - can help expose areas of weakness where we can improve. $600,000). Those home builders are doing remodeling and are low- balling the market and getting the jobs. What we then hear is how bad the67. Building a long-term brand and market growth in our area through crea- homeowners experience was, or not the same design features, or not the tive marketing and referrals. same quality, or it took 2x as long as you said it would, etc.68. Increasing marketing efforts. 4. January and February are both up, very interested in how the spring69. Carefully measuring all ROI with advertising budget, closely monitoring holds out. labor & material job costs. 5. Changing up our marketing to stay fresh in our clients minds and updat-70. Training, training and more training. We had scratched this line item from ing our on line presence. our budget the last two years and have felt the negative side finally catch 6. This has been the most difficult last 6 months in our companyʼs 27 year up with us. history. We are looking forward to refocusing our entire company on great71. Maintain best practices. Commitment to customer satisfaction. customer service and product offerings that will make us the obvious choice.72. Making changes in how we handle customer complaints and survey data. 7. It canʼt suck forever. Time to go to work.73. We have instituted a customer experience program. 8. Its still quite challenging out there.74. Develop a name in our community.75. Developing a "preferred/VIP" client list with a specific program and bene- fits to encourage long-term relationships76. Too much to list here. Non-Guildmember Comments: Comments from non-77. Continuing to put our clients first. Guildmembers in response to the same question:78. Ramping up marketing even higher than before.79. Hiring quality people, that have significant experience. EMERGING TRENDS:80. Expanding territories. “What trends do you see emerging among your customer preferences?”81. We are marketing to gain market share, keeping our systems doing busi- ness clear, protecting our reputation through honest work of the highest 1. Customers have more efficient plans, budget consciousness and focus on quality. value and ROI. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 12 of 16
  • 13. 2. Customers are extremely budget conscious and want to pay cash. 22. Buyers are choosing less upgrades than in the past.3. They want to get as much work with as little money as possible. 23. We see more composite counters.4. Weʼve seen more master bedrooms and quest/in-law bedrooms on the 1st 24. Weʼre getting more calls to do renovations and upgrades rather than thefloor. maintenance issues we have seen of late.5. We have gotten more requests to utilize attic spaces. 25. Value and price are more important than ever.6. Customers want less expensive products 27. Use of the internet and more research by consumers is putting pressure on margins.7. Customers want a bit smaller homes, but not significantly smaller. (1800-2200 square feet). They are energy conscious, and like the green mantra but 28. Customers are buying better quality products.are not willing to pay for it to any great extent. There are definitely better 29. They seem to be better informed about products. They seem to be shop-educated shoppers thanks to the web. They do their homework! ping around more and evaluating more. Value seems to be important.8. We see more smaller homes with nicer amenities such as cabinetry, floor-ing, etc…9. Many of our past clients are having home inspection of their homes tokeep up with the home maintains. WANING TRENDS:10. There are more “comfort changes” such as bathrooms. “What trends are becoming less and less important to your customers?”11. There is more realization of lost value and in doing projects with limitedfunds available. 1. We are seeing less "frills", massive features and square footage.12. We see more inability to get approved for financing. 2. Fewer top of the line projects with bells and whistles.13. Customers are savvier because of internet shopping. There are alsomore and more interest in sustainable items. 3. We are seeing less quality and timely completion.14. We are doing more customer service and handholding. 4. There are fewer lavish, trim packages.15. Customers are concerned about value. 5. Green – Other than energy considerations,16. Customers are more price conscious, and get multiple quotes on each incentives dont seem to entice.bid requested. 6. Big cookie cutter houses arenʼt trending right17. They are constantly looking for a better sales price. now.18. I would expect our customers to continue to request custom homes but 7. Less are adding new space to their homes, andon a smaller scale. seem to be fixing what they have.19. Customers wanting everyone that they can find to bid their job for freeand then take the lowest price, regardless of quality. 8. Customers are going for fewer additions.20. Weʼre finding customers wanting less expensive products. 9. Weʼre seeing less interior design issues.21. Customers are finding more appeal and acceptance of green and sus- 10. Customers demand less high level finishes.tainable practices/products. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 13 of 16
  • 14. 11. There are less tickets for large baths. NEAR-TERM STRATEGY12. No one is worried about resale value. “What is your business doing to address your most pressing NEAR-TERM challenges?”13. There are less large homes.14. Customers care little about quality. 1. We continue to focus on value as we have for years: Concentrating15. There has been a decrease in the size of lots. on the ROI for some of the high performance features that we incor-16. “The very large home” has gone missing. porate into our homes and providing our clients with the information to make educated decisions.17. Customers donʼt know anything about the 2. Trying to find vendors where we buy better. contractor working on the job. Their thinking 3. Cutting all extemporaneous costs. is all price-driven. 4. Weʼre controlling costs.18. Fewer people are getting what their friends 5. Increasing contact points with customers to promote customer care have. agenda.19. Weʼre doing fewer small projects. 6. Increasing marketing efforts to increase prospect traffic.20. Buyers are eliminating rooms that are not used 7. Becoming more actively involved as a manufacturer with the build- often such as living rooms and formal dining ersʼ customers. Attempting to make the home buying process less "painful" and more transparent. Playing a more active role in the rooms. homebuyers buying process. We are mainly LISTENING!21. We see a lot of people frustrated with their 8. Increasing advertising, considering joining a BNI group composite decks. 9. We are seeing more competition in the market, which is requiring22. Weʼre seeing less expansion of homes. More more bidding for jobs. people using the existing space in different 10. Market, market, market! ways. 11. Marketing to a wider base of customers.23. Consumer is as price-conscious as I have ever 12. Looking into different financing options and getting energy star rating to battle losing buyers to older re-sales. seen in 30 years of business. 13. Studying more and reading everything I can get my hands on involv-24. Higher end products are not as important. ing this industry. people are not reaching up as much as in the 14. Setting benchmarks for hiring. past. 15. Prospecting, prospecting, prospecting! 16. Offering less expensive products. 17. Offering flexibility on loan minimum qualifying standards. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 14 of 16
  • 15. 18. We have re-designed our website, are exploring social media and 6. Still waiting to see if there is a long term in our market. hope to have both going strong this spring. 7. Cutting overhead without reducing services to our builders. Reducing 19. Improve name awareness through better/more marketing efforts on- our breakeven so we are still standing to gain a piece of a shrunken line. pie. Staying positive is an often cited necessity, but we take it seri- ously. 20. Racking up the credit cards to hold things together until work stabi- lizes. 8. Considering some specific incentives for homebuyers. 21. Implementing more marketing tools and customer contact. 9. Staying lean and bidding more work. 22. Looking for underserved markets and ways to differentiate us from 10. Networking, marketing, hiring middle management our competitors. 11. Streamlining services. 23. Cut back on employees. Went back to work on a daily basis. 12. Going for Energy Star and better financing options for buyers. 24. Cash flow is biggest hurdle. We need to close more open estimated 13. Starting to plan for retirement/slow down in about 4-6 years. and quicker than we have. 14. The same stuff that helped us grow 50% since 2008. Service, serv- 25. We are running lean. Trying to capitalize on volume purchasing. ice, service. 26. Moved our showroom to our top zip code in sales. 15. We have reduced operating cost maintaining an efficient business 27. We are trying to improve our online marketing. We are diving into the model. social media marketing more. We are surveying our customers to get 16. Attempting to keep our crew foreman on the payroll during this down feedback. We are trying to build bridges for future projects. economy. 17. Most of our business is built on our reputation. We continue to pro- vide quality workmanship and outstanding customer service. With the addition of social media, we will be able to let more people knowLONG-TERM STRATEGY: about our services and give people the ability to visually see our“What is your business doing to increase your likelihood of success in the product and be able to contact our customers for references.LONG-TERM?” 18. Paying all my bills on time. 19. More marketing and home shows. 1. Continuing to develop our value-based approach to differentiate our- 20. Structuring a project mix and number of projects scaled back from selves in the marketplace. the past, and choosing projects based on type of customer, and prof- 2. Giving clients at least two price options with different level of prod- itably. ucts in each price. 21. Looking for better land opportunities. 3. Weʼre going lean and mean. 22. Marketing to existing customers. 4. Reducing debt. 23. Strategic alliance creation has been and will be a key we work on 5. Diversifying our marketing strategy and taking on more light com- and top of mind advertising efforts. mercial projects. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 15 of 16
  • 16. 24. Aggressively putting money online and reducing overheads to fight tighter margins. 25. Our formula works and we are always booked 20 to 24 months in advance. 26. We are trying to increase our on site methods of project process. From start to finish we want to try our best to always improve our service i.e. create value and customer care.ADDITIONAL COMMENTS: 1. There are no silver bullets out there. We dont spend a lot of time looking for them but instead concentrate on doing the things we have chosen to do, well. Listening, not just hearing, and then reacting ap- propriately. All the basic stuff we have all heard for many years, but we practice, practice, practice. Change is all about us for sure, but some things never change----take care of the customer and he/she will take care of you. Pretty simple philosophy but how quickly we forget to practice that mantra. 2. The additional area of concern is bank financing availability to our clients. Individuals with good to excellent credit are being denied or are being offered lower loan limits when they can find a lender. 3. In our small little community we have been hit especially hard by this lousy economy. I have shut my doors and have started to draw S.S. already. Just today I heard that another contractor here is closing his doors also and selling off his tools and equipment. I do not see any improvement here for quite sometime. We have already lost quite a few small contractors like myself. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. Page 16 of 16