It seems that no sooner had we come through the challenge of Covid-19, we were straight into a cost of living crisis, both of which have affected the door, window and conservatory industry. In his latest column, Faisal Hussain, DGCOS Chief Executive, discusses the implications that economic pressures have had on installers and how they can best adapt.
The last few years have been difficult for both installers and homeowners, and the landscape of the fenestration industry has changed as a result. Both Covid-19 and the current cost of living crisis have affected buyer behaviour in different ways, and some installation companies have been caught out.
The pandemic, somewhat ironically perhaps, created opportunities for installers with a shift in how consumers are spending their money. A move towards hybrid working created a demand for new home-working spaces, and as consumers were unable to spend on big ticket items such as holidays, the money saved often went into improving their homes.
The demand for home improvements during Covid meant there were delays in getting products within a reasonable timeframe. Since then, of course, the cost of materials has risen dramatically, as have operational costs such as insurance and fuel, and staff costs due to the rising minimum wage and employee expectations. Combine this with a skills shortage and the lack of younger people moving into the industry and you have a perfect storm. If that was not bad enough, installers are reporting that consumer demand is falling as they start to hold onto their money due to pressures on domestic budgets, particularly mortgages, food and energy and a general level of uncertainty brought on by the cost of living crisis. The installers we talk to reported a tough 2023 with expectations for a difficult 2024, certainly for the first few months. A glimmer of hope is that a combination of above-average pay rises and potential falling interest rates will mean that consumers should have more money in their pockets.
How installers are adapting
Those installers who have built resilience into their businesses are those most likely to ride out the storm. Managing cash flow is especially important, and if you are an installer worried about how to keep on top of it, DGCOS offers advice to their members about this issue.
Giving customers what they want might sound obvious, but being aware of the changes in buyer attitudes represents an opportunity for diversification, which means a wider product offering and consequentially more work prospects. Homeowners are recognising the benefits of installing high-performance products, which might mean more initial outlay, but the long lifespan and product benefits are worth it. Products that offer greater energy efficiency, security and noise reduction are key to giving customers what they want, potentially at a healthy margin.
While some installers are telling us that where the increase in product costs are an objection in a buying decision, they are working more with customers to compromise in order to win the business. However, by operating an efficient business model, installers can reduce the degree by which they need to do this.
Benefits and value
It can be tempting to focus purely on cost, whether that’s the cost of the final product, the cost of investing in training or quality staff, or the levels customer service and after-sales care. However, installers should avoid devaluing their offering by cutting costs too far. The focus should be on the benefits of the product, of providing good service levels, and of having highly trained installers. The first internal cost which is often cut in tough times is marketing, but we advise that putting a clear, benefit-led marketing campaign in place will reap more rewards than not doing any. Again, installer members who do not have experience in this area can call on DGCOS for help and advice.
We cannot solve all the world’s problems, but we do have a vast amount of experience and resources available to our members as part of our Installer’s Benefits package, leaving them free to do what they do best – door, window and conservatory installations.