Builder & Remodeler Market Predictions for 2011, from Q1 2001

GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2011 GuildQuality Inc. of 16

Predictions & Strategies

This report contains a summary of the feedback received from our members in the Q1 2011 Market Predictions & Strategies Survey conducted during the week of March 21. This survey is a continuation of the survey we began in October 2008. In this and prior surveys, GuildQuality requested feedback from the owners and operators among our hundreds of 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 build-ing, remodeling, 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 member sentiment is a leading in-dicator within the building industry.

This image is the Wordle representation of the roughly 400 comments received in response to our survey.

About GuildQuality

North America’s best builders, remodelers, contractors, and real es-tate companies rely on GuildQuality to help them monitor and im-prove the quality of their work.

GuildQuality provides customer satisfaction surveying, web-based performance reporting, peer benchmarking, and performance mar-keting for construction and real estate companies that seek to deliver a consistently exceptional customer experience.

GuildQuality offers a trial membership to all homebuilders, remod-elers, 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 comments, suggestions, or requests you have about this and future reports.

To review prior reports, visit the search for “predictions” on the GuildQuality Blog.

http://www.guildquality.com


http://www.guildquality.com/blog/index.php?s=predictions&submit






http://www.wordle.net

http://www.wordle.net

http://www.guildquality.com/freetrial/






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.

Guildmember Confidence IndexThe 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 Q1 2011, relative to all prior quarters, considerably more companies are predicting improvement in both their and their peers performance than in any quarter since we begin the sur-vey in late 2008.




Confidence Level DistributionWhen asked what kind of change they expect in the market in general, 62% of members predicted conditions would either improve or dramatically improve over the next six months. Similarly 81% predict improvement or significant improvement in their own business.


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.



Comments: Each quarter we ask companies to share their thoughts on emerging trends and their strategies for succeed-ing in both the near- and long-term.

EMERGING TRENDS

“What trends do you see emerging among your customer preferences?”

1. There are long buy cycles. Customers are more discerning and picky once the job initiates; are also hesitant to commit (although exploring).

2. Customers want more custom features but expect lower pricing

3. 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 been our customers.

4. Simpler, cleaner design is popular. Customers are thinking more about resale.

5. There is a growing preference for energy efficiency.

6. Customers are maximizing the value received for the budget and elimi-nating some items if they exceed it.

7. Customers are more focused on the value they get for their price.

8. Customers are more focused on price.

9. Customers are going for simplicity vs extravagant on design and material choices.

10. Clients are bidding out work to an average of 3 bids. They are looking for more value for their dollar.

11. Customers are updating kitchens and bathrooms with an eye on keeping the budget more conservative. They are also doing more exterior make-overs such as incorporating porches, porticos, improvement to roof lines and blending multiple exterior claddings to create more interest.

12. Customers are installing more hardwood and worried less about square footage. They are doing less change orders, and tightening their budgets/lowering their wish lists.

13. Customers want their projects customized for their needs

14. Customers prefer to see employees – not subcontractors – doing the work.

15. Customersʼ priority is low price.

16. Weʼre encountering value-conscious prospects that show more interest in green-building.

17. Customers want more for less, smaller projects and needs rather than wants

18. We are seeing more customers interested in remodeling, mostly kitchens and bathrooms. We are seeing more customers looking for custom homes.

19. Customers are taking out construction loans for large scale projects

20. Customers are adding in-law additions and/or space for additional family units. Master baths are still HOT. Kitchen remodels are coming back.

21. Smaller scale projects with maximum budgets of around $150K are trend-ing, however there is much resistance over that amount. Clients still want everything for that budget and thus problems arise. Clients still very much aware of what is out there and typically do not understand costs. Kitchen and bath remodels still top for projects.

22. Weʼre doing more kitchen remodels.

23. Customers are all about saving money.

24. Customers want small square footage with more upgrades and better, energy-efficient floorplans.

25. We are doing smaller jobs and weighing costs much more. Also, custom-ers are wanting several bids and less happy with the exclusive design-build process.

26. More and more customers want to be able to research your company online, view photos of your work and – most importantly – reviews of your company's performance prior to making a decision.

27. Customers are showing mild interest in green products, and they are still very cost conscious.

28. There is continued interest in "sports car" homes – homes that are smaller yet have high performance, lots of bells, more efficiency and more detail.




29. Our customers aren't splurging for the high-end products for their remod-eling, but are going with things that look really nice yet don't break the bank.

30. Weʼre still taking it slow with more interest and more leads. Weʼve had a split between large and small projects with not much in the middle.

31. Customers are focusing on high value, high return projects.

32. Clients are asking for more but wanting to pay less.

33. Customers are wanting smaller projects.

34. Customers are overly price sensitive.

35. Customers want to decrease project costs by purchasing materials them-selves. This is true across all levels of wealth. Countertops demanded are mostly granite.

36. Weʼre finding project size is increasing. Customers still want multiple bid-ding.

37. Customers are making master suite additions, decisions to stay in their existing homes and do significant remodeling and additions

38. Customers are cautious but have started to move ahead with projects that have been put off the last few years.

39. Customers are demanding more kitchen and bathroom upgrades

40. Weʼre seeing more remodeling and less building. People are planning to stay in their homes longer.

41. Customers are taking longer to decide, getting more quotes, and buying fewer windows in the first round. They are often looking for high ranking in customer service and using the internet more and more to find re-placement windows/replacement window companies.

42. Customers are demanding more covered decks/covered porches.

43. Where last year high-end materials were not considered necessities, we are seeing more customers blending higher-end products into their pro-jects today.

44. We are seeing a lot of medium sized projects (kitchens, baths, finished basements). People also are financially "trapped" in their home, so are deciding to remodel to their taste and stay for a period of time.

45. Customers are getting several quotes and doing more shopping to find a good deal.

46. Customers are spending more on energy-efficient items.

47. Customers are spending more on practical rather than lavish improve-ments.

48. Customers are doing much more vetting of their contractors before mak-ing a selection

49. Weʼre doing more smaller projects and more functional projects rather than the ego type renovations we were seeing a few years ago.

50. Customers are making more practical selections.

51. Prices have become more competitive.

52. Customers are still trying to get deals, often making extremely low offers that are not acceptable. There does not seem to be any recognition of value...it is all about the deal.

53. Customers are demanding fiber cement siding instead of vinyl siding.

54. Weʼre heading back toward larger jobs such as kitchen remodels, addi-tions, sunrooms, etc…

55. Remodeling jobs are becoming larger.

56. Customers are focusing on price.

57. Almost all of our customers are paying for their remodeling instead of financing.

58. Lead flow is slowly but surely increasing. High-end products are more desirable.

59. Customers want lower square footage homes at lower prices, and still want nice finishes. Location is growing in importance.

60. Market is stabilizing.

61. Customers want to remodel instead of add onto.

62. Customers demanding long-term answers to solve recurring problems such as energy-efficient replacement windows and fiber cement siding instead of re-painting vinyl siding.

63. Customers are wanting lower prices and small down payments.




64. Customers are very aware of costs and are looking for the best value for their dollar. This does not mean that they are not spending money, as we are seeing clients choosing higher quality products and taking time to understand all of the information before making a decision.

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-tomers are more focused on "how it will look" than ever.

66. Customers are preferring to pay for things with credit/financing.

67. The current customer is more value driven then ever.

68. I believe homeowners will be ready to spend more on the upkeep of their 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 take the time to do their research online before choosing a contractor to perform their projects.

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-tended future. 2. Maintenance Free is on everyoneʼs mind, especially the boomers. 3. We are asked more often if we offer financing options.

70. Weʼre doing more necessities than commodities.

71. Customers are focusing more on energy efficiency and paying for quality rather than paying to get the job done cheaply over and over again.

72. Customers are demanding more value for their money.

73. Energy performance is creeping in again. My customers are moved by great aesthetics and solid product offerings.

74. Customers are demanding more remodeling rather than buying new.

75. Customers have smaller budgets.

76. Customers are focused more on sustainability and have much greater cost awareness.

77. Granite countertops remain quite strong, perhaps even stronger. Projects are growing in size, but still significantly smaller than 2-3 years ago. En-ergy efficiency is important, but folks don't want to pay much for it. The worst trend is the tendency to go for low-bid.

78. Customers like to shop more.

79. Customers are more positive, but also more concerned about value.

WANING TRENDS

“What trends are becoming less and less important to your customers?”

1. Customers are no longer committing large investments. Small jobs of less than $5K are easier for them to swallow.

2. Energy Star buildings are dropping due to cost.

3. Customers no longer have to have something because their friends or neighbors have one.

4. BIG for the sake of big is no longer trending.

5. Large additions to homes are not trending.

6. The “mega” size is waning.

7. Weʼre building less large homes.

8. Size is no longer the driving factor.

9. Customers are no longer going for big, flashy and expensive.

10. Customers are no longer adding large spaces. Over the top features on middle to upper middle class homes.

11. Square footage is no longer a priority.

12. Trendy materials and finishes are no longer a priority.

13. Customers want significant renovation additions that add s/f. Harder to access financing means customers are working with existing funds.

14. Customers are no longer sourcing their own materials

15. We are doing fewer large additions which require bank/mortgage loans. Also trendy remodeling ideas are the first to go. Outdoor kitchens, high end closet finishing, high end products are typically first to be removed to keep budgets in line.

16. Expensive details are less important to customers.

17. Weʼre seeing less and less room additions.

18. Weʼre building less “showey" foyer areas (2 story foyers and curved stairs).

19. Going green is no longer as popular as best price. Customers are settling for less than their ideal project.

20. Weʼre building less large spaces.




21. Customers are not going for the commercial appliance look in their kitch-ens.

22. Customers are showing little interest in energy efficiency.

23. We are seeing fewer price-driven decisions

24. We are building fewer luxury projects.

25. We are not building projects with the same “bling” our prior projects had.

26. Customers are no longer focused on quality.

27. Green products have not really caught on here yet.

28. There is less demand for a higher-level green product line on our pro-jects.

29. We donʼt do many high ticket, luxury/want projects.

30. We donʼt do many large spaces or additions. People want to rework the spaces they already have and make them more efficient.

31. We are building fewer dining rooms.

32. Customers are less likely to demand custom finish cabinets.

33. Weʼre doing less high-end finishes.

34. Long term solutions seem less important. Looking for the short-term fix.

35. Weʼre seeing less luxury items like new siding for the sake of a new color or style.

36. Customers are no longer buying more just to have more.

37. Weʼre seeing less large, expensive, ego-type renovations.

38. Weʼre seeing less expensive selections.

39. Quality of products purchased is waning.

40. Green trends don't seem to play much of a role; nor does location seem to be as much of a factor. I was surprised given the increased cost of gas. Maybe in the next 6 months it will be more of an issue, but right now peo-ple are willing to buy further out just to get more square footage for their dollar.

41. Everything is important to the customer.

42. Basic maintenance and repair jobs are fewer.

43. Weʼre seeing quality fall in importance, unless another contractor did something horribly.

44. Customers want home to be livable the way they want, not concerned with overbuilding the value of their home.

45. Weʼre seeing less big square footage jobs, and also living further out on acreage.

46. We havenʼt had one window replacement lead in over a year.

47. We are seeing less high dollar luxury purchases.

48. Customers are no longer going with the cheapest system. They are more concerned with energy efficiency and quality rather than price.

49. The size of the houses have decreased, and folks are still very conserva-tive in their spending.

50. Fewer customers are checking with the BBB before purchasing. After the news outwardly said that companies can "buy their grade" by becoming a member, it seems to have discredited the Better Business Bureau.

51. People are not looking for a "quick fix" because they plan to stay.

52. Customers are going for less fancy and obvious.

53. Lower price is no longer a priority.

54. We are doing fewer jobs with a tub in the master bathroom.

55. Customers are no longer remodeling just for the visual appeal.

56. We are doing fewer large projects or additions.

57. We are doing less big showcase projects.

NEAR-TERM STRATEGY

“What is your business doing to address your most pressing NEAR-TERM challenges?”

1. Doing lots of marketing.

2. Doing comparative analysis on the cost/quality of product with different suppliers in order to receive best quality for our dollar.




3. We are really focused on making certain that our customers are abso-lutely positively happy about all aspects of working with us. We also make certain to touch base with each of our past customers at least 4 times per year.

4. Taking on jobs of all types and further from our normal territory.

5. Most deals involve incentives. We would like to break away from them, but they are ingrained in the local market mindset.

6. Staying in frequent contact with our circle of influence, maximizing PR opportunities and providing more upfront effort with prospective clients.

7. Doing sales training and marketing.

8. Focusing on just surviving.

9. Our goal is creating additional marketing with an educational vs. informa-tional format.

10. We plan on offering levels of design build services to appeal to everyone from simple replacement work, full gut remodeling, or large home addi-tions and remodels.

11. Keeping our administrative costs lean, focusing on doing a great job for our clients and lots of follow-up.

12. Using private sources for construction financing.

13. Trying to increase our margins.

14. Doing careful analysis and adjustment to our margins to keep backlog consistent & steady.

15. Going to keep costs down.

16. Trying to figure out the mentality of clients expecting remodeling being 25-50% less cost while still delivering incredible service.

17. Simply focusing on customer service and communication.

18. Currently merging with another remodeling company.

19. Starting a new direct mail marketing campaign in new areas where we feel there are opportunities from contractors who have gone out of busi-ness or reduced their marketing budgets for those areas.

20. Looking to get people into our showroom

21. Our plan is to pray and take action.

22. Going to build the best plans on the best lots.

23. Evaluating every single thing to cut overhead costs, and then making changes.

24. Maintaining low overhead

25. Going to promote, promote, promote.

26. Trying to educate the homeowner, informing them that going with the cheapest price isn't always the best avenue. We explain to potential cus-tomers how we have heard or been called back because the person they hired did a below par job or they walked off the job because they ran out of money.

27. Getting involved in social media, targeting neighborhoods and looking for growth areas. Will try TV.

28. Going for stronger positioning in design and adding resources in design.

29. Selling more value to our clients

30. Recruiting more staff.

31. Controlling overhead costs. Focusing more on existing customer relation-ships. Waiting to hire until we have 6 months of work backlogged.

32. Increased mark-up 7%

33. We have more than tripled our marketing budget this year, and have sig-nificantly increased our participation in networking groups with great re-sults.

34. Putting together grass roots marketing programs. Using more direct mail, neighborhood shows and increasing traffic on our website through multi-ple channels.

35. Putting more money into our web site, SEO and blog. More focused di-rect mail as well.

36. Focusing on cutting costs.

37. The biggest challenge today is getting more qualified opportunities for projects. Our focus has been to build our brand online with a quality so-cial media campaign mixed with blogging, newsletters and email cam-paigns.

38. Listening to what people are asking for, and making suggestions to make the project work for both their taste and budget




39. Working our past customer list harder, concentrating on marketing to specific target market, and asking for referrals more aggressively. We have re-designed our website and are directing more traffic that way.

40. Trying to educate the customer on the value of their renovation project.

41. Trying to follow up quickly and be clear in our communication.

42. We are a small company so our emphasis is more and more on our web presence and reviewing our processes.

43. Looking for ways to run a tighter ship, cost-cutting where possible without sacrificing quality or customer service.

44. Hiring more office and field staff.

45. Managing costs of lead generation and overhead, generating more busi-ness from past clients

46. We shut down 3 of our 4 locations and our most pressing challenge is to regain confidence with our employees about their future with the com-pany.

47. The biggest challenge we face is the pressure federal regulators are put-ting on local banks. The banks are creating more expenses for the bor-rower at a time that the borrower really can't afford it.

48. Offering discounts to become more competitive.

49. Seeking education on several different levels. Looking for more employ-ees, but not until the need is actually there.

50. Doing more marketing and social networking. For instance, we updated our website, our company is now on Facebook and LinkedIn.

51. Making quality important again

52. Advertising to capture leads.

53. Very active and marketing in new ways.

54. Creating better marketing to lower our cost per lead.

55. Allowing customization of stock plans, introducing trendy finishes as standard, and doing in-house financing for qualified buyers.

56. Fixing internal issues.

57. Hiring another person for office work. Our designer is so busy she is bot-tle necking our business. May look into intern vs. employee.

58. Focusing on overhead, efficient marketing and pinpoint advertising.

59. Constantly reviewing and adapting to market competition

60. As with long term, we are listening to what our clients are saying through our surveys and acting quickly on any trends that indicate that improve-ment is needed. We are also communicating better with our client from initial meetings through project completion and working on our existing relationships and networking for referral work.

61. Continuing to implement systems. Our biggest challenge is lead-time. We have put a lot of focus on communicating with customers during their "wait" time for the project. Additionally we are working to shorten lead time by installing more efficiently and catching errors from suppliers be-fore starting the job.

62. We really need to improve our customer service and back-end produc-tion. The GuildQuality surveys have helped expose some underlying problems. Now that we know what they are we are aggressively trying improve them.

63. Our business is marketing ourselves and addressing the very value driven prospects. We provide reasons that make us the overall best choice.

64. Working with trustworthy affiliates such as GuildQuality. It truly gives our past customers a voice. GuildQuality allows past customers to give hon-est feedback about their experiences with my company, and all feedback is analyzed to make the next customer's experience better. We also use the comments to let our past customers "advertise" for us.

65. Aranging financing options and bringing on the very best long term prod-ucts to offer as solutions.

66. Increased and differentiated marketing. We are trying to do the social media but itʼs very difficult.

67. Reviewing our production process to better match what we envision the customer would expect.

68. Instituted a customer experience program.

69. Expanding our web presence and opening a showroom.

70. Hiring more staff.

71. Doing more event-oriented marketing such as seminars, showroom events, etc… to bring in stronger leads.




72. Advertising in more direct and engaging ways, working with customers to educate them on their available choices and the costs associated with them.

73. Outsourcing, even for design.

74. Marketing more.

75. Keeping a tight budget, yet expanding our work force to meet demand.

LONG-TERM STRATEGY

“What is your business doing to increase your likelihood of success in the LONG-TERM?”

1. Implementing cultural shifts, maintaining pricing structure and charging for any estimate no matter how small.

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-coverable level.

3. There is a saying, " Price, Quality, Customer Service.....Choose any two". We have focused on Quality and Customer Service and let the riff-raff 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 will tell their friends about the amazing experience they had working with us.

4. Focusing on Internet marketing, SEO, Social networking, real networking.

5. Increasing our operational efficiency, shortening cycle times, closely monitoring cash flow.

6. Maintaining adequate capital, retaining our team and adapting our busi-ness model to the times.

7. Doing more sales training.

8. Just focusing on surviving.

9. Going back to planning three years ahead and not just month to month. Using a "less is more" thought process on work types to focus on niche areas.

10. Diversifying with the kitchen and bath business. Allows us to not only feed each other business but to continue to market and develop our own busi-ness as separate entities.

11. Keep marketing consistent, doing great work and giving our clients a great experience.

12. Working on both hard and soft costs.

13. Remaining efficient and cost-competitive.

14. Substantial increase in education and consulting spending.

15. Watching our budget.

16. Not going into more debt, reducing overhead and working from existing capital.

17. We are working on going to fixed-price bids instead of cost plus con-tracts.

18. Going back to basics – customer service and communication.

19. We are retiring!

20. Continue to market/advertise effectively and constantly improve our sell-ing processes and client communication systems.

21. We are expanding our footprint and trying to increase market share.

22. Doing more presales.

23. Network and help others.

24. Developing new floorplans that are better and smarter.

25. Cutting overhead costs while maintaining our quality, lowering prices, taking on smaller projects than we haven't done in a long time.

26. We are improving our website, implementing social media sites and inter-linking all of our web presences.

27. We are doing strategic planning for the future. Planning to hire a marketing/sales director sometime in 2011.

28. Revising plans for market demand, not trying to make the market accept our existing plans, revising our lot offerings in the same way.

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.




30. Our objectives are the following: Build team. Build sales skills. Build mar-keting. Do great game of business.

31. Investing in the internet and longer-term productivity improvements.

32. We are investing in employee training moving to a larger design center.

33. Steady marketing is our goal.

34. We have created a marketing plan, and now need to follow it.

35. We have spent the past 18 months developing and refining our systems, and we have begun hiring to our organizational chart for growth. We con-tinue to be engaged with an experienced business coach on a monthly basis.

36. CANI- constant and never-ending improvement to all aspects of the com-pany.

37. Initiate a management development program.

38. Increasing targeted advertising. Focusing on quality.

39. Pumping more money into our web site, SEO and blog. Also more fo-cused on direct mail.

40. Weʼre doing more networking, expanding into more remodeling.

41. Long-term requires the Near-Term to be effective. Taking the near-term to a different level and utilizing a variety of smaller campaigns to compli-ment our online strategy. We don't feel that traditional media works as an effective tool other than to compliment the branding process.

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 look at materials.

43. Growing our service and maintenance department. With people looking for the small fix until they are financially comfortable to make bigger in-vestment we need to service them through maintenance contracts and leak repairs until they are ready to tackle larger projects.

44. Educating our sales force to better sell value.

45. Charge what we need to stay in the game for the long haul, and educate our staff.

46. We have always worked by word of mouth, now we are starting to adver-tise with Kudzu.

47. Continuing to stay ahead of our competitors by offering the absolute best service and little extras to our clients.

48. Not sacrificing GP and enforcing policies and procedures.

49. We are training ourselves and adapting our business practices to adapt to market trends that are pushing towards: improving home value and curb appeal, improving energy and functional efficiency, maintaining the home's fundamentals, being a consulting partner to our clients, and deliv-ering and demonstrating a high level quality service. We are adapting and increasing our marketing to address the long term trends of home owner concerns regarding value, efficiency, maintenance, partnering, and qual-ity service. We are pursuing an online presence underscoring the quality of our service.

50. Added a number of new products.

51. Focusing on changing our business model from 1 product offering to mul-tiple products that will reach more of the market with price and quality.

52. Getting out of the real estate market if possible. It is too difficult for the small developer to stay active given all the costs that have very little to do with the final product.

53. More advertising, training, new product awareness.

54. Solidifying processes. Looking to hire sales people.

55. Branding and more marketing. Continue to build an A-Team within our staff and constantly working on better culture.

56. Focusing on what our business is known for.

57. Focus on customer satisfaction, expectation and acquiring referrals.

58. Marketing more.

59. Reducing expenses, creating more leads, and mastering our sales proc-ess.

60. Focusing on location, pricing and niches.

61. Training, having more meetings and upgrading sales program.

62. Remodeling our showroom, adding more space, preparing for growth and stability, continuing membership at Remodelers Advantage for the expert advice to sustain these difficult times.




63. Improving company focus on goals from sales to install. Total buy-in to company and personal success.

64. Trying to increase market percentage and saturation.

65. Customer satisfaction surveys, evaluating the responses and acting upon improving in the areas identified that show a need. Building relationships that result in referral work. Improving communications from advertising to closing the sale to completing the project and beyond.

66. Continuing to train our employees. Constant awareness of where we stand and what we can do better goes a long way. Utilizing GuildQuality can help expose areas of weakness where we can improve.

67. Building a long-term brand and market growth in our area through crea-tive marketing and referrals.

68. Increasing marketing efforts.

69. Carefully measuring all ROI with advertising budget, closely monitoring labor & material job costs.

70. Training, training and more training. We had scratched this line item from our budget the last two years and have felt the negative side finally catch up with us.

71. Maintain best practices. Commitment to customer satisfaction.

72. Making changes in how we handle customer complaints and survey data.

73. We have instituted a customer experience program.

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 relationships

76. Too much to list here.

77. Continuing to put our clients first.

78. Ramping up marketing even higher than before.

79. Hiring quality people, that have significant experience.

80. Expanding territories.

81. We are marketing to gain market share, keeping our systems doing busi-ness clear, protecting our reputation through honest work of the highest quality.

ADDITIONAL COMMENTS

1. 2011 is starting much better than 2010 for us. Our leads are over double 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 of 2010 and look to improve on productivity of home show leads twenty-fold.

2. Counter to the market conditions, you have to be aggressive in pushing your product. Having said that, you better be offering what the market wants to purchase, not what you want to sell.

3. There is little new home construction in the mid-market ($300,000 - $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 the homeowner's experience was, or not the same design features, or not the same quality, or it took 2x as long as you said it would, etc.

4. January and February are both up, very interested in how the spring holds out.

5. Changing up our marketing to stay fresh in our clients minds and updat-ing our on line presence.

6. This has been the most difficult last 6 months in our companyʼs 27 year history. We are looking forward to refocusing our entire company on great customer service and product offerings that will make us the obvious choice.

7. It canʼt suck forever. Time to go to work.

8. It's still quite challenging out there.

Non-Guildmember Comments: Comments from non-Guildmembers in response to the same question:

EMERGING TRENDS:

“What trends do you see emerging among your customer preferences?”

1. Customers have more efficient plans, budget consciousness and focus on value and ROI.




2. Customers are extremely budget conscious and want to pay cash.

3. They want to get as much work with as little money as possible.

4. Weʼve seen more master bedrooms and quest/in-law bedrooms on the 1st floor.

5. We have gotten more requests to utilize attic spaces.

6. Customers want less expensive products

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 are not willing to pay for it to any great extent. There are definitely better educated shoppers thanks to the web. They do their homework!

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 to keep up with the home maintains.

10. There are more “comfort changes” such as bathrooms.

11. There is more realization of lost value and in doing projects with limited funds available.

12. We see more inability to get approved for financing.

13. Customers are savvier because of internet shopping. There are also more and more interest in sustainable items.

14. We are doing more customer service and handholding.

15. Customers are concerned about value.

16. Customers are more price conscious, and get multiple quotes on each bid requested.

17. They are constantly looking for a better sales price.

18. I would expect our customers to continue to request custom homes but on a smaller scale.

19. Customers wanting everyone that they can find to bid their job for free and then take the lowest price, regardless of quality.

20. Weʼre finding customers wanting less expensive products.

21. Customers are finding more appeal and acceptance of green and sus-tainable practices/products.

22. Buyers are choosing less upgrades than in the past.

23. We see more composite counters.

24. Weʼre getting more calls to do renovations and upgrades rather than the maintenance issues we have seen of late.

25. Value and price are more important than ever.

27. Use of the internet and more research by consumers is putting pressure on margins.

28. Customers are buying better quality products.

29. They seem to be better informed about products. They seem to be shop-ping around more and evaluating more. Value seems to be important.

WANING TRENDS:

“What trends are becoming less and less important to your customers?”

1. We are seeing less "frills", massive features and square footage.

2. Fewer top of the line projects with bells and whistles.

3. We are seeing less quality and timely completion.

4. There are fewer lavish, trim packages.

5. Green – Other than energy considerations,

incentives don't seem to entice.

6. Big cookie cutter houses arenʼt trending right

now.

7. Less are adding new space to their homes, and

seem to be fixing what they have.

8. Customers are going for fewer additions.

9. Weʼre seeing less interior design issues.

10. Customers demand less high level finishes.




11. There are less tickets for large baths.

12. No one is worried about resale value.

13. There are less large homes.

14. Customers care little about quality.

15. There has been a decrease in the size of lots.

16. “The very large home” has gone missing.

17. Customers donʼt know anything about the

contractor working on the job. Their thinking

is all price-driven.

18. Fewer people are getting what their friends

have.

19. Weʼre doing fewer small projects.

20. Buyers are eliminating rooms that are not used

often such as living rooms and formal dining

rooms.

21. We see a lot of people frustrated with their

composite decks.

22. Weʼre seeing less expansion of homes. More

people using the existing space in different

ways.

23. Consumer is as price-conscious as I have ever

seen in 30 years of business.

24. Higher end products are not as important.

people are not reaching up as much as in the

past.

NEAR-TERM STRATEGY

“What is your business doing to address your most pressing NEAR-TERM challenges?”

1. We continue to focus on value as we have for years: Concentrating on the ROI for some of the high performance features that we incor-porate into our homes and providing our clients with the information to make educated decisions.

2. Trying to find vendors where we buy better.

3. Cutting all extemporaneous costs.

4. Weʼre controlling costs.

5. Increasing contact points with customers to promote customer care agenda.

6. Increasing marketing efforts to increase prospect traffic.

7. Becoming more actively involved as a manufacturer with the build-ersʼ customers. Attempting to make the home buying process less "painful" and more transparent. Playing a more active role in the homebuyers buying process. We are mainly LISTENING!

8. Increasing advertising, considering joining a BNI group

9. We are seeing more competition in the market, which is requiring more bidding for jobs.

10. Market, market, market!

11. Marketing to a wider base of customers.

12. Looking into different financing options and getting energy star rating to battle losing buyers to older re-sales.

13. Studying more and reading everything I can get my hands on involv-ing this industry.

14. Setting benchmarks for hiring.

15. Prospecting, prospecting, prospecting!

16. Offering less expensive products.

17. Offering flexibility on loan minimum qualifying standards.




18. We have re-designed our website, are exploring social media and hope to have both going strong this spring.

19. Improve name awareness through better/more marketing efforts on-line.

20. Racking up the credit cards to hold things together until work stabi-lizes.

21. Implementing more marketing tools and customer contact.

22. Looking for underserved markets and ways to differentiate us from our competitors.

23. Cut back on employees. Went back to work on a daily basis.

24. Cash flow is biggest hurdle. We need to close more open estimated and quicker than we have.

25. We are running lean. Trying to capitalize on volume purchasing.

26. Moved our showroom to our top zip code in sales.

27. We are trying to improve our online marketing. We are diving into the social media marketing more. We are surveying our customers to get feedback. We are trying to build bridges for future projects.

LONG-TERM STRATEGY:

“What is your business doing to increase your likelihood of success in the LONG-TERM?”

1. Continuing to develop our value-based approach to differentiate our-selves in the marketplace.

2. Giving clients at least two price options with different level of prod-ucts in each price.

3. Weʼre going lean and mean.

4. Reducing debt.

5. Diversifying our marketing strategy and taking on more light com-mercial projects.

6. Still waiting to see if there is a long term in our market.

7. Cutting overhead without reducing services to our builders. Reducing our breakeven so we are still standing to gain a piece of a shrunken pie. Staying positive is an often cited necessity, but we take it seri-ously.

8. Considering some specific incentives for homebuyers.

9. Staying lean and bidding more work.

10. Networking, marketing, hiring middle management

11. Streamlining services.

12. Going for Energy Star and better financing options for buyers.

13. Starting to plan for retirement/slow down in about 4-6 years.

14. The same stuff that helped us grow 50% since 2008. Service, serv-ice, service.

15. We have reduced operating cost maintaining an efficient business model.

16. Attempting to keep our crew foreman on the payroll during this down 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 know about our services and give people the ability to visually see our product and be able to contact our customers for references.

18. Paying all my bills on time.

19. More marketing and home shows.

20. Structuring a project mix and number of projects scaled back from the past, and choosing projects based on type of customer, and prof-itably.

21. Looking for better land opportunities.

22. Marketing to existing customers.

23. Strategic alliance creation has been and will be a key we work on and top of mind advertising efforts.




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 don't 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.




Builder & Remodeler Market Predictions for 2011, from Q1 2001

Real Estate

Transcript of Builder & Remodeler Market Predictions for 2011, from Q1 2001