GuildQuality Member Predictions & Strategies: Q3 2010


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More than 100 of GuildQuality's builders, remodelers, developers, and contractors offer their predictions for the next six months, their strategies for success, and their assessment of emerging and waning trends in residential construction and real estate.

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GuildQuality Member Predictions & Strategies: Q3 2010

  1. 1. Predictions & Strategies This report contains a summary of the feedback received from our members in the Q3 2010 Market Predictions & Strategies Survey conducted during the week of September 13. This survey is a follow up to the survey we began in October 2008, and have continued on a quarterly basis since then. In this and prior surveys, GuildQuality requested feedback from the owners and operators among our more than 500 home builders, remodelers, contractors, and real estate developers that use our service. In each of the surveys, more than 100 people provided feedback. Our members are representative of the best businesses in the building, remodel- ing, and real estate profession. And just as the strength of the building industry has historically forecasted the strength of our entire economy, I believe that our mem- ber sentiment is a leading indicator within the building industry. About GuildQuality North America’s best builders, remodelers, contractors, and real estate companies rely on GuildQuality to help them monitor and improve the quality of their work. GuildQuality provides customer satisfaction surveying, web-based performance reporting, peer benchmarking, and performance marketing for construction and real estate companies that seek to deliver a consistently exceptional customer ex- perience. GuildQuality offers a trial membership to all homebuilders, remodelers, developers, and contractors. Experience GuildQuality first-hand with a free trial. Thanks to all those who participated! We greatly appreciate your participating in the survey and welcome any com- ments, suggestions, or requests you have about this and future reports. This image is the Wordle representation of every comment received To review prior reports, visit the search for “predictions” on the GuildQuality Blog. in response to our strategy questions. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 1 of 15
  2. 2. Guildmember Confidence Index The Guildmember Confidence Index is a forward looking indi- cator that summarizes the predictions of the members who participated in our survey. A positive number suggests that more members predict improvement than decline. In Q3 2010, members continue to predict improvement in both their companyʼs performance and the market. Relative to Q2 2010, there was less confidence in the market in general, and greater confidence in peopleʼs own companies. Guildmember Confidence Index. A positive number indicates more people forecast improvement than decline. A negative number indi- cates more people forecast decline than improvement. 100% would indicate all respondents forecasted improvement; -100% would indi- cate all respondents forecasted decline. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 2 of 15
  3. 3. Confidence Level Distribution When asked what kind of change they expect in the market in general, 46% of members predicted conditions would stay about the same. This is fewer than last quarterʼs 53%. While more predict improvement (38% relative to last quarterʼs 36%), the percentage of members predicting decline or significant decline jumped from last quarterʼs 11% to 16% -- second only to the extreme pessimism we saw way back in Q4 2008ʼs. Conversely, when asked about their own companies, 61% pre- dict either improvement or significant improvement. That num- ber is up considerably from Q3ʼs 54%. Confidence Level Distribution. Guildmembers were asked to predict whether the performance of their company and the market would sig- nificantly improve, improve, remain the same, decline, or significantly decline over the next six months. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 3 of 15
  4. 4. Comments: Each quarter we alternate between asking a 15. Using cash, not borrowing, no frills, just solid plain jobs that are a benefit handful of open ended questions, and not asking any open to the entire family. ended questions. In Q2, we asked no open ended questions, 16. Value and durability over time. Smaller projects with good return and im- though a handful of members provided us with additional feed- pact. back. Their comments: 17. Still want footage but willing to delete all luxuries. 18. They are willing to sacrifice minor to major parts of their project to keep within budget. No longer do they just add on. EMERGING TRENDS 19. Energy efficient products, demanding higher customer service, demand- “What trends do you see emerging among your customer preferences?” ing quicker turnaround. 1. Smaller, more energy efficient homes that provide more controlled energy 20. Cost being really important. bills and low maintenance. 21. Desire is still occasionally there for larger projects but they are thinking 2. Doing more maintenance type projects like windows and siding. Bath- long & hard about their investment and also the loans are problems. rooms and kitchens are still a popular option. 22. Staying in their homes longer and remodeling to accommodate aging 3. More emphasis on cost, wanting to talk to multiple contractors before needs. making a decision, remodeling areas like kitchens and bathrooms rather than adding rooms or whole house remodels. 23. We have experienced an increase in the use of resilient flooring and laminate countertops. I believe people are beginning to consider the cost 4. Low cost options. Some energy saving options are gaining popularity. vs. value of a remodeling project due to the fact that property values are 5. Single room remodeling with value being demanded for a low price. Still not likely to increase significantly in the near future. looking for energy efficiency, and want high end finishes. 24. Value driven trends, with an eye on costs, and still saying wow. 6. Remodels that provide more efficient use of space. 25. Budget minded, sustainable materials. 7. Wider use of energy efficient products & construction, smaller sized 26. Smaller remodel jobs with nice finishes, function with a less importance homes. on style. 8. A lot of smaller scale jobs. 27. More about value and getting something that will last and provide them 9. Lower on the frills in favor of a conservative budget. It is all about value enjoyment. these days. 28. Very cost conscience, review and then reviews cost again. 10. Price is everything. Forget "green" features. 29. Hesitancy, long time period to complete a sale price is most important. 11. More practical. 30. Smaller size projects. 12. Potential customers are hesitant to take action because of the policies of 31. Value, budget and some luxuries but very few and carefully thought the potential actions of the federal government and the fact that so much about. is uncertain with the economy. 32. Smaller homes at affordable pricing. 13. Smaller projects; quality over quantity. 33. Competitive balance. More 'retail' type comparisons. 14. Continued growth in the sustainable and green alternative products. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 4 of 15
  5. 5. 34. We are seeing homeowners calling about additions, tear down and build 53. Smaller projects, but looking for design package as a turn key project. new home, lots of kitchen remodels. 54. Kitchens, baths and upgrading finishes value conscious improvements. 35. Low ball offers on current inventory. It is getting bad. Very low offers. 55. Slightly smaller plans and high quality. people will walk away from a deal over $500. 56. Customers want to do work on much more of a scaled down budget. 36. Spending less and getting more. 57. We strictly do bathroom remodels and we feel like that market is only 37. More energy awareness. getting better. 38. They still want what they want at the higher-end. In the mid-range they 58. All customers want more for less. We spend our time pricing and re- are willing to settle for smaller but still want quality and features. pricing trying to get more work. 39. Smaller size, more quality. 59. Back to basics. Not as much emphasis on the "cadillac" type renovations 40. Smaller projects, longer sales cycle, nervous about getting stung. and more on the practical. 41. Cheaper, smaller, cheaper. 60. Customers are looking for "Value" not grandeur. They are thinking more about long term needs and less about short term value of their improve- 42. Smaller smarter design, strong cost conscious. ments. 43. Families are making changes in living environments that are moderate in 61. Higher quality of materials. scope, perhaps asking for renovations which can be phased in instead of done in one phase. 62. Whole house layout changes. More work on ranch homes and homes built between 1940-1960. 44. Smaller projects, less "pizazz" and more comfort. 63. In the past 4 months we have seen clients returning to purchasing older 45. I see more customers holding off their project, but higher end products homes that require additions and remodeling of significant scope. Our are selling. clients have become more concerned about the value that our design 46. Our customers are more concerned about value these days more than build work will add to their property relative to the cost. Our clients are anything else. looking for designs that have timeless attributes so they will retain value, and materials that will be durable and long lasting that again will retain 47. It seems that the commercial world is up and coming. Many projects that value. There is more attention to the basics, they have cut out the extras. have been shelved are coming to life in both commercial and residential. The only problem is that everyone is squeezing as much as they can and 64. Projects are smaller (an avg of 50%) and the clients are pickier we hear more and more "If you can drop your price $5k, you can have the 65. Fairly price sensitive. Some of the wants gets set aside to hold to a real job." Really? We pride ourselves on pricing very fairly from the start and budget. often can't afford to drop the price, but can't afford to lose the job. 66. Preference for master down/ranch plans. Granite, hardwoods, stainless 48. More price sensitive. steel appliances. 49. Investing in home while attempting to sell in down market. 67. Smaller job scopes, lowest pricing. 50. A greater focus on practicality and value as opposed to luxury and acces- 68. Limiting amount of renovations, cutting back on wants and focusing more sories. on needs. 51. Smaller projects. 69. Increased interest in lowering energy costs. 52. Sightly smaller job sizes. 70. Green for energy savings more so than sustainability. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 5 of 15
  6. 6. 71. Most clients are trying to do the work out of pocket. Very seldom do we talk with anybody who is doing financing. 72. Customers purchasing homes using 203K loans...we are being paid by the lender. continue to remodel Master Bath and Kitchen. Job sizes con- tinue to be small because over 50% of homeowners are underwater with their mortgages - can't sell so they are remodeling. 73. Customers who want something for little or no profit. 74. Homeowners know they have the upper hand when it comes to pricing. 75. Remodeling over building new. 76. Price, Price, Price getting as much as they can for dollar spent / Value / likes extras but does not want to pay for them. 77. A desire to have smaller, lower priced home but still high end amenities. 78. The are choosing to spend less and down size in design...concerned about budgets. 79. They are all worried about the next 24 months. The uncertain economy, the elimination of the tax breaks, the security of their jobs, etc. Very wor- ried about the future environment. 80. Increased willingness to forego some upgrades and options. 81. Smaller jobs and tighter budgets. 82. Improving as opposed to moving. 83. Tight budget adherence. 84. People are more concerned about costs more than ever. 85. Downsizing, lower price points. 86. Lower price points, bonus room, 1 story family room. This image is the Wordle representation of every comment received in response to our question about emerging trends. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 6 of 15
  7. 7. WANING TRENDS 23. Remodeling with the idea of selling the home. “What trends are becoming less and less important to your customers?” 24. HIghest priced project. 1. Large square footage homes. 25. Most space, remodeling existing spaces. 2. High-end materials. 26. Luxury items are declining. 3. High cost options. 27. Quality. 4. Have not noticed any real items or choices not being important. 28. Everything luxury - the biggest and best. 5. Remodels that provide comfort or luxury. 29. High-end products. 6. Larger homes. 30. Timing. Less initiative to pursue building. 7. Quality, they seem to be only concerned with price. 31. They are willing to accept less upgrades and they focus on the over all price. 8. It is less about keeping up with the Jones and more about meeting very specific personal needs. 32. The top of the line items such as plumbing fixtures and lighting. 9. "Green" features. 33. Large homes. 10. Glitz. 34. Big is not always better. 11. Quality seems to be less important as price becomes the most important 35. Bigger. factor. 36. Green construction. 12. Adding lots of space. 37. Larger, additional cost for adding quality. 13. High end products. 38. The finishes in kitchens and baths are not as important as the overall 14. Leading edge design trends. space. In addition, clients formerly put the scheduling of their project as a top priority but they are now willing to wait to get their project done. 15. Fireplaces, soaker tubs, Upgraded Cabinets, Trim. 39. McMansion type projects. 16. Products that aren't energy efficient, products that are outrageously ex- pensive, products that don't have a good repair history or that aren't 40. They are less concerned with cheap temporary solutions, and more con- backed by a good warranty. cerned about performance of the products over the long haul. 17. It seems less are caring about the amount of Care that a company puts in 41. Quality seems to be going by the wayside a bit. Everyone has waited so until they need to be rescued. long to get their project moving that price seems to be the deciding factor, which I fear is going to cause problems for many structures over a long 18. A huge home loan. term....lowest price is not sustainable, but it has been the reason we've 19. Garden tubs, theatre rooms, game rooms. had to decline some projects. 20. Professional grade cooking appliances. 42. Going green at their expense. 21. Structural changes. 43. Higher end investments. 22. Less fashion, more practical. 44. Extravagant designs with all the bells and whistles. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 7 of 15
  8. 8. 45. Luxury items such as large body spray showers, etc. posed to big-time design features. 46. Luxury type remodels. 67. Price is pushing track our record / systems / to the back burner. 47. Full tear down and rebuild. 68. Green products that do not relate financially to them. For example they want energy efficient windows because it saves them money but any 48. Large expansions, luxury anything. product made from recycled product that is going to cost them but not 49. Home Theaters. They prewire and install at later date, if at all. save them in the future they aren't interested in. 50. Additions. We are doing much more remodeling. 69. Appearance. More customers today are considering vinyl windows be- cause of the cost vs. wood or wood clad. 51. Flash and fancy. 70. Everything has to be top-of-the-line. 52. Whirlpool Tubs. 71. Keeping up with the neighbors. 53. Big & flashy. 72. Spending on frills. 54. High performance design, but not "Green". That is our customers want a well designed house that is very energy efficient, but are not really inter- 73. There has been a slight decline in quality in favor of pricing. ested in all of the detailed aspects of "Green design and construction". 74. Big square footage. 55. Size of home. 75. Some, not all, of our customers are prioritizing their wants and needs 56. Second story additions have been cost prohibitive. over time. 57. Our clients are less inclined to include items that 76. 2 story family room, interior trim detail. could be considered conspicuous consumption. 58. People are less concerned about longevity in business, professional affiliations, certifications and more concerned about price. It is common for people to have 5 or 6 estimates today. 59. Fluff is gone. Good design is benefit. Less wasted space. Over the top design elements and amenities are gone. 60. Size. More interested in quality and functionality. 61. Additional space, high end appliances, custom finishes. 62. Sustainability, high end choices. 63. How huge the project can be. 64. Room additions and media rooms. 65. Quality businesses performing the work. A Wordle representation of every comment received in response 66. We see more meat and potatoes jobs as op- to our question about waning trends. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 8 of 15
  9. 9. NEAR-TERM STRATEGY 18. Adjusting our marketing. Adding selective replacement products (siding and doors) to our offering. “What is your business doing to address your most pressing NEAR-TERM challenges?” 19. Staying ahead of the market as far as pricing, keeping land position sta- ble and buying it at the correct future needs price. 1. Estimating reduced profit margins in an attempt to get consistent work rather than max profit on each job. 20. Focusing on sales and face-to-face networking. We've never been a sales driven company, but we are now! 2. Estimating reduced profit margins in an attempt to get consistent work rather than max profit on each job. 21. Hiring employees to help us achieve our goals, the appropriate people for our "bus". Seeking guidance/business coaching to guide us in our quest 3. Modified the homepage to make it more Google friendly, direct mailing to to achieve our goals. neighborhoods we want to work in and following up with phone calls. 22. We have recently began to retrain all staff to to meet my expectations 4. We have increased staffing with well-qualified employees so that when ,and have it well documented. We are also making constant contact to we get work, we can turn it out quickly with no slippage. customers, to insure our field promises are being up held. 5. We are keeping costs as low as possible. 23. Trying to be competitive in small-jobs ($5000 - $25,000) and doing some 6. Continuing to lean out, overhead cuts and streamlining of systems for handyman work (less than $5000). efficiency. 24. Local marketing. 7. More networking, learning about social media, & trying to educate the 25. We are beginning to develop lower priced remodeling alternatives. We consumers. always encourage the use of high quality materials and processes and 8. More aggressive purchasing. remind our customers that for example, a laminate countertop will easily last 20 years if it is cared for. 9. Continued new training and upgrading our computer systems to increase efficiency. 26. We have settled in on maximizing our efficiencies, communications with our clients, and absolutely controlling overhead costs. 10. Sales and Marketing continue to be our major focus. 27. Minimizing expenses. 11. We have increased our advertising budget. In the past few months a lot of companies have decreased their advertising budget. We want to stay 28. Trying to establish more on-line presence for marketing. in front of consumers. 29. We have incorporated all sorts of overhead decreases. Looking to sell 12. Everything we can. another truck and possible sell our building and relocate to a more cost effective office. 13. Praying. 30. Pricing and selling model changes. 14. Cost-cutting, not expanding, yet staying true to our vision and goals of a quality community. 31. Marketing and internal training. 15. More clearly defining our market niche, to be able to improve the signal- 32. Hurry up and wait...helping clients in design move their projects to the to-noise ratio. build side of the house. We are always focused on marketing and sales. 16. Examining our process of getting and managing jobs for improvement in 33. Using non-traditional marketing, open houses, events and festivals. efficiency and accuracy. 34. We are looking to hire a new lead carpenter to take some of the addi- 17. Marketing. tional work off the existing employees in the field. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 9 of 15
  10. 10. 35. Build for less. less options, pay less for options. 57. Questioning every expense. 36. Increasing our marketing and diversifying. 58. We are designing a portfolio of more affordable homes. We are trying to bring a product to market for the first time home buyer at a COMPEL- 37. Cut overhead and increase web based marketing. LING price to the market. 38. Remodeling and additions. 59. Implementing an integrated soft-ware program so all areas of the busi- 39. More remodeling. ness are covered under one program rather than numerous spreadsheets and programs. 40. Spending a lot of time. 60. We have been very proactive in reducing all overhead expenses. We 41. Reduced overhead, no extra spending. have requested that all of our vendors do the same so that we provide 42. Prayer: we seem powerless to do much anything else. the best value to our customers. 43. We are increasing our production staff. In addition, we are doing more 61. Morphing into everybody else. customer engagement activities to keep the relationship intact. 62. Fighting to retain clients who want quality and craftsmanship. Making 44. More emphasis on marketing and sales. sure not to sign clients only interested in price. 45. We are training our sales staff more and more. We closely monitor all 63. Our most pressing near term challenge is sales volume. We are network- marketing sources. ing with previous clients and our business associates to increase referrals and repeat client sales. We are pursuing our qualified leads with more 46. We are working on giving the customer the overall experience. Paying urgency and turning around proposals more quickly. attention to detail. 64. We are focusing on our marketing of our past clients whom are more 47. We are revamping how we explain the value in quality and our offerings. discriminating. We are more frequently reviewing the differences between our company and our competitors. 65. Cautiously hiring people. Our last 10 months have been great. 48. Looking at smaller jobs. 66. Qualified customers is our biggest near term challenge. 49. Training and becoming better at what we do. 67. Improving customer service. On time and on budget focused renovations. Summarizing customer feedback. Identifying areas that need improving. 50. Nurturing every qualified lead as a prized jewel. Larger web presence. 51. Hiring outside sales training. 68. Seeking new avenues for obtaining business. 52. Give clients more options to chose from, start with a lower base price and 69. Reducing operating costs and launching new marketing projects to in- then show upgrades. crease leads/appointments. 53. Efficient project management focus. 70. Building procedures manuals, improving employee benefits. 54. Marketing for what we perceive to be the want's of our clients. Expanding 71. Working harder on sales activity. Diligence with customer service and our specialty offerings regarding painting and hard-scapes. guerilla marketing. Networking is working. 55. More marketing for remodeling projects. 72. Near term challenge is getting more work. We are doing more face to 56. We are trying a lot of hands on type marketing to meet people and get face marketing. Touching past clients and getting in front of people where leads. we can. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 10 of 15
  11. 11. 73. Continue marketing and networking; laid off all office staff; re-negotiated contracts with vendors to reduce overhead (IT support, business liability/ workers comp insurance, etc). 74. More marketing and sales training. 75. We are trying to cut costs to raise our margins. 76. Hired a PR company to increase sales. 77. Reducing costs and pushing calendaring and specifications etc very early to push jobs ahead. Reduced cycle times saves money. 16 month jobs are now 12 months. This is also working since we have the Subs undi- vided attention as their entire company can focus on one or two jobs at a time. 78. We're turning most of our product before beginning new starts, getting more bids on product lines before beginning the building process, re- searching through our local realtors, prospective buyers etc to see what is most important to our buyers and cutting our the frills that are not im- portant. 79. Securing construction financing. 80. More direct mail. Radius mailers around job sites. Door knockers. Up- dated web site. 81. The near-term challenge is overcoming uncertainty among buyers, par- ticularly when they own a current home that isn't selling. The only way we can address that is to be willing to make reasonable concessions that entice them to act sooner rather than later. 82. Doing handyman jobs and learning how to manage smaller jobs with a faster turn around. 83. Keeping a close eye on spending. 84. Working smarter. 85. Capitalizing on our reputation which brings quite a few opportunities at projects. 86. Nurturing every lead, securing competitive pricing from trades and sup- pliers, modifying our specifications to deliver a better price. 87. Increasing sales and marketing efforts. 88. Redesigning product with less 2 story areas, more efficient floor plans to get lower price point. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 11 of 15
  12. 12. LONG-TERM STRATEGY 16. Increasing marketing. Putting together a growth plan. Putting together a staffing plan. Putting together a wealth building plan. “What is your business doing to increase your likelihood of success in the LONG-TERM?” 17. Concentrating on having the proper infrastructure to make sure the field staff has the needed support to exceed the customers expectations. 1. Establishing ourselves as leaders in the green, energy efficient home building industry. 18. Fine-tuning our processes & estimating. 2. Keeping overhead down, controlling costs, looking for new options that 19. Consistency. allow us to keep are prices competitive. Working the schedules with our 20. We are doing our best to sense and serve local needs. Advise and con- customers, vendors and our internal people. sult with honesty. There are times when our company is not a good fit for 3. Making a better budget for next year, depositing a portion of all payments a project. I believe that openly discussing this provides the transparency into a money market to be used for working capital, paying down debt, that so often is lacking in a business negotiation. We are doing our best better marketing campaigns. to cultivate our referral business as it is our best marketing tool. 4. We are keeping costs as low as possible. 21. Building and growing from our reserves, avoiding debt. 5. Rebuilding our website, and reaching out to more public venues. 22. Networking & Marketing. 6. Maintaining the leanest structure we have had for 10 years. We do not 23. Working on getting the phone to ring, thru marketing and referrals and plan on adding people or costs until we are being pushed by backlog. learning and taking classes on sale system to maximize our rate of turn- ing leads into business. 7. We have added a totally different product line that will help save energy costs. It has a much lower total dollar amount per contract but much 24. Continue to market consistently and stay lean. higher profit. Smaller ticket items that can start returning dividends imme- 25. Holding fast to mark up and quality. Careful with sub selections and sub diately will help the bottom line a lot. performances. Maintain a good, talented staff. 8. Praying. 26. Pricing approach. 9. Maintaining the core concepts that we believed in when we started the 27. Expanding services. development five years ago. 28. Marketing! 10. More clearly defining our market niche, to be able to improve the signal- to-noise ratio. 29. Providing reasonable priced product. 11. Improving our sales process to educate the consumer more as to why my 30. More marketing. company is a superior choice 31. Becoming more organized and weeding out the customer's who are just 12. Brand building. looking for a number so we don't waste precious time working on an es- timate when there is a good chance we won't get the job. 13. Investing in the internet. More selectively targeting our clients. 32. Doing what it takes to make it work. You have to think outside the box. Be 14. Sticking close to our bankers, looking into subdivision that offer extended creative in advertising, financing and sales. You must be able to come lots, huge amenity packages and are family centric. down to there level or what they are will to pay for a new home. 15. Working with a sales trainer to increase the value of each lead we re- 33. Diversifying. ceive. 34. Better systems are in place as we move forward. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 12 of 15
  13. 13. 35. Developing a line of semi-custom products that are price sensitive to the 54. We are working on our purchasing powers. We are working to provide market. more affordable pricing by aggressive price negotiating with vendors & trades. 36. Diversification into remodeling. 55. Ensuring each and every client is a delighted client. 37. Surviving. 56. We have continued with our marketing program, though much scaled 38. Survival is the key and how long the biggest question. back. We do not have any company debt and our overhead is very low so 39. We are continuing to market heavily during this time, almost doubling our we are positioned to be profitable at almost any level of revenues includ- marketing expenditures since 2008. We closely monitor our cash flow to ing todays which is 2/3's less than in previous years. remain solvent. 57. Developing more community outreach programs to stay top-of-mind in 40. Organizing and perfecting systems. our client pool. Working to continue producing award winning clients with a great team of employees. 41. Keeping costs under control and increase all business efficiencies from sales to production to marketing. 58. We are investing time and resources in training staff, improving operating systems, and focusing on effective marketing. 42. Working on every aspect of the company from sales and marketing to admin and production. 59. We are as lean as we can be and be professional and provide great serv- ice. We had lowered our prices to be more competitive and are now 43. We are cutting long term costs where possible and trying to plan for staff- slowly raising them. ing and such (training now for busier times ahead). 60. Designing, pricing and building homes that our prospects realize the win- 44. Focusing on more creative marketing. dow of opportunity is short so they'd better get off the fence and commit. 45. as above, training and becoming better at what we do. 61. Looking at alternative revenue sources including general contracting and 46. Taking a hard look at ourselves as a company, and revisiting our busi- custom homes. ness and marketing plans. We see our marketing plan undergoing the 62. Cultivating past clients, calling, follow-up, asking for referrals. greatest amount of revision. 63. Focusing on dual strategies of best world class service and being a cost 47. Hiring outside sales training. leader. 48. Drive home customer service with our employees and sub-trades. 64. Expanding our building options in the range of green building. 49. Refocus on those that are our raving fans along with and active search 65. Networking to a higher end niche. for an organic public relations person. 66. We hope to be SOLD! 50. Being profitable now as we don't believe that anything will change very fast from the current economic climate. 67. Trying to increase market share. 51. Paying down debt on lots owned. 68. Increasing margins. 52. We are being very fiscally cautious and looking at every opportunity care- 69. Targeting wealthier customers. fully. 70. Cutting margins and profits to bone. work for wages, (hopefully) Installa- 53. Increase our marketing efforts through the internet. tion subs and vendors have reduced pricing substantially. we see a need in the manufacturing and government areas to reduce their costs. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 13 of 15
  14. 14. 71. We feel the above will not only address the challenges now but help us in the long term as well. 72. Building in high traffic/ dense local markets with entry level to mid level product. 73. More direct mail, more radius mailers, reducing my news print advertising increasing participation in spring home shows and updated web site. Also installed MarketSharp E to better manage my business. 74. We've dramatically reduced cycle time, improved systems and made ra- tional cuts to our overhead (e.g., reduced our space and thereby our rent by over 60%). 75. Keep our marketing up and hanging on to our good employees. 76. Advertising to previous clients. 77. Writing more proposals. 78. Expanding our customer base, increasing our sales skills, etc. 79. Developing systems focused on efficiency and quality control. 80. We're enrolled in a sales training course to develop a sales system. We are laser focused on the customers for whom we are working now. GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 14 of 15
  15. 15. ADDITIONAL COMMENTS 12. The economy has forced us to become better. I wish we would have worked harder to improve our company before the recession. 1. The general tone of the custom home building market is definitely improv- ing, albeit slowly. Much more hope entering 2011 than 2010. 13. Several customers seem to be waiting until the mid-term elections before making any decisions. 2. People are being careful with their money but they haven't abandoned fixing up their homes. Value is more important now than ever. 14. This winter is going to be tough for us due to a lack of people wanting to build! 3. Give us a new congress! 15. We have found that over the past 4 months that our leads from potential 4. People no longer seem content with win-win almost seems clients that have or will purchase a home needing significant remodeling as if people are so set on getting the best deal possible that they don't and/or additions has increased dramatically. We had no serious leads for care if the other side takes a loss. Not good for long term relationships this type of work from Oct 2008 - May 2010, however this type of lead and the damage done may not recover for years to come. has resurfaced in a significant way. We see this as a significant shift in 5. We see the entire market wanting to move forward but unwilling to do so. our market area, a very positive shift because this type of project had They are waiting to see if we have another dip, or is this the real bottom. disappeared from the radar for more than 20 months. Until clear support of value is established, the market will be at a stand 16. 2010 is shaping up to be one of the best our company has ever been. still. Our volume is good, margin will be down slightly but so are costs to pro- 6. We are finding many clients that are doing a lot of internet shopping or duce. We actually are blessed and very happy. We are actually seeing that feel they are "experts" - making our jobs difficult at times and at other positive signs of keeping the momentum for 4th quarter 2010 and 1st times, making sure that we're always one step ahead of them! Clients quarter of 2011. We believe we have found the right product at the right seem to be increasingly demanding. Wanting more and more for less and price for the current economic climate. less. I think part of this is the press - telling the public that contractors are 17. In our market we are experiencing very cautious buyers. they are putting hungry for work and are willing to cut their prices. off major purchases of high ticket items. Very hard to generate leads right 7. We are still in the cautious optimism mode. Controlled, profitable, and now. competitive growth. With strong referral business. And an eye on expand- 18. The wealthy retired customers are not affected by the economy, so we ing our marketing impact. are going after there business. 8. In our area, we are seeing a quick turnaround in homeowner's decision to 19. We continue to put a heavy emphasis on customer satisfaction. Our use go ahead with remodeling their homes. I think that people have given up of GuildQuality is the main tool for this. with the idea of moving because they can't or probably won't get the money out of their house that they may have invested into it or have a mortgage for so they are doing work on their home. 9. The market is improving for us in the northeast. June and July where really bad for sales. September is looking stronger than August. We ex- pect the market move up and down for some time before settling in. This is the new norm. 10. The large custom market is dead for now. 11. Marketing differentiation will be a key for us- we have a high quality prod- uct in a competitive market, so we are looking for an innovative "edge". GuildQuality is Building a Community of Quality (888) 355-9223 © 2010 GuildQuality Inc. Page 15 of 15