June 23rd, 2022
A Paradigm Shift is Just Ahead- Market Research May Be the Answer
Right now, window and door fabricators live in a world where creating demand for their products is no issue. The day-to-day challenges of their business are driven by supply chain issues, labor shortages and long lead times associated with new equipment. But with inflation on the rise, interest-rate hikes being doled out by the Fed and the slow-down of the housing market, it’s just a matter of time before this all changes. When it does, and the back orders run out, will your company be ready for the paradigm shift?
The paradigm shift will represent going from “How can we keep up with business on the production end?” to “How can we grab more business by generating greater demand for our products, especially at higher pricing levels in an inflationary market? Yes, it seems that the latter question hasn’t been raised in quite a while and almost sounds foreign to our ears. This is because in today’s environment, the only thing standing in the way of new business is keeping production up to the same level as orders. This means obtaining adequate materials, components, equipment and manpower to get windows and doors on a truck and even obtaining drivers to get the truck to its final destination. However, after the paradigm shift, our industry will be faced with new challenges. Inflation and high fuel prices are eating away at the average homeowner’s discretionary income. Higher interest rates will make it more expensive to finance new homes as well as home remodeling projects. Back orders will eventually become completed, and lead times will get back to normal. Supply chain issues may no longer exist.
What will exist is a softer demand for window and door products. How will you react? What can you do now to be ready when we hit this curve in the road and things suddenly slow down? One thing you can do now is to invest in market research. Why market research? After all it can be an expensive undertaking, and it is already expensive enough running your business with all the increases in costs currently impacting one’s business. Can you really afford to add another expense?
Well, the argument for market research is simple. It is foolish to think that the key buying factors influencing consumer buying decisions over the next few years will be the same as those that have been in play during the last few years. So, when demand softens and the competitive nature of the window and door business is ratcheted up again, will your company leaders understand the consumer mindset well enough to make the proper strategic decisions that will position your company to grab a decent market share? Can you grab a bigger slice of a smaller pie?
Market research offers some key benefits. Companies can use surveys and focus groups to get in touch with existing and prospective customers. The objectives would be to evaluate how satisfied a company’s customers are with product performance, quality, and customer service. Also, how do they perceive the company’s brand image? Key buying factors and price points should be re-evaluated. What do consumers want and expect in a window or door at various price levels? With Energy Star 7.0 just around the corner and many window companies struggling with how they will continue to meet more stringent Energy Star requirements, it is important to gauge the potential impact of potentially not offering Energy Star-rated windows at every price level. Also, what other key buying factors exist to influence the buying decision other than thermal performance. These might include factors such as warranty, color options, sound control, ergonomics, security and even compatibility with electronic control systems such as the ability to open windows and doors with Alexa.
Market research must be conducted now to evaluate the changing market conditions that lie just around the corner. It can help ensure that your company is in the best position moving forward. Yes, it can be expensive, but the potential impact upon your future market position can be huge. It can help you to navigate that sharp curve in the road ahead and keep your company running strong and full speed ahead!