October, 2008

WHAT DECK BUILDERS REALLY THINK

LBM Journal is excited to provide this exclusive report based on fresh research into the habits, wants, and needs (and dissatisfactions) of today's deck contractors.

By Staff Report

Market research can be an extremely valuable tool to learn what makes your customers tick. And focus groups, when conducted by a trained independent third-party, can uncover nuanced attitudes that questionnaires may miss. Since the deck market is one bright spot in a depressed building industry, wouldn’t you love to learn what drives deck contractors’ buying decisions? Now you can. In the next few pages, you’re about to discover...

Why Decks?

Before we get into specific profiling information about the assembled decking contractors, you may be asking, “Why all the focus on decks?” Candidly, it’s big business, and getting bigger. The deck contactors in the focus group view the
decking industry as becoming “an industry within itself in the next three years.” Plus, more and more professionals are becoming deck specialists in the building industry, and this is due to the increased popularity of creating “outdoor living spaces.”

Moreover, the deck replacement market has also increased over the last few years. For some focus group participants,
it comprised almost half of their business in 2007. And here’s a statistic that will surprise you: Most of the extreme deck makeovers that the focus group had done were on decks “three years old or younger.”

Part of the popularity of decks is due to the Internet and to the profusion of home and garden shows. Homeowners can see not only what can be done with creative deck design, but they can easily research deck products on the Web. Contractors in the focus group also pointed out that it’s easier to do their sales pitch, because homeowners are initially more knowledgeable about the products the contractors present.

Most of the extreme deck makeovers that the focus group had done were on decks “three years old or younger.”

Participant Profile

The eight deck contractors assembled had an average of 11 years in the business, ranging from a high of 15 years in the business for one and three contactors who’ve been building decks for seven years. For materials, every one of the participants used a different percent of composite and wood materials, so MRA researchers saw a representative mix of buyers, ranging from guys who were using 99% vinyl to those using 95% wood:

CONTRACTOR 1 used 30% composite and 70% wood (completing 40-to 49 decks/year).
CONTRACTOR 2 used 95% composite and 5% wood (completing 20-29 decks/year)
CONTRACTOR 3 used 99% vinyl and 1% wood (completing 40-49 decks/year)
CONTRACTOR 4 used 75% composite and 25% wood (completing 10-19 decks/year)
CONTRACTOR 5 used 65% composite and 35% wood (completing 40-49 decks/year)
CONTRACTOR 6 used 10% composite and 90% wood (completing 50-59 decks/year)
CONTRACTOR 7 used 50% composite and 50% wood (completing 150 decks/year)
CONTRACTOR 8 used 5% composite and 95% wood (completing 10-19 decks/year)

Average Deck Values

Except for one participating deck contractor who did 10% commercial work, all the other contractors interviewed were 100% residential focused. On the other hand, the per-deck price range varied widely, with one contractor indicating that he built decks costing between $1,500 and $16,500; two contractors who were in the $2,000 to $15,000 range. One in the $4,000 to $40,000 range, one each in the $6,200 to the $26,000 and $6,000 to $45,000 ranges, one in the $8,000 to $25,000, and one who reported his value range as between $5,200 and a whopping $54,000.

When participants were asked to depict the decks they build, you can see from their responses that this group takes a great deal of pride in their work. They described their decks as:

– Artwork, custom
– Custom, unique, strong
– Custom, unique, top-notch
– High-end, maintenance-free, custom, specialty
– Inspiring, unique, quality
– Mostly cedar, top-notch, quality
– Outdoor living place
– Outdoor living space

The Biggest Complaints: Manufacturers

Now. Down to the meat and potatoes. In the focus group, MRA gave the decking contractors a chance to express their
“largest complaint about the manufacturers of decking and accessories today?” Here’s what they said:

“Cedar has been bad this year, inconsistent.”
“Don’t have any [complaints] really. I only use one [manufacturer].”
“Fading and scratching on the composite material. With wood it’s issues of warping and cracks.”
“Finding product and getting it delivered to you.”
“Not understanding the way products are going to be used; putting things on market before they are researched.”
“The pressure treated material; you have to use special nails and galvanized screws, it drives the price up and nothing is standardized.” “They give you bad / poor quality material.” “Warranty issues with stuff warping…”

The Biggest Complaints: Deck Products

The decking contractors were asked to state their “largest complaint with deck products,” and here’s what they said:

– “Lack of research and follow-through”
– “Maintenance”
– “Quality”
– “Shrinking and warping composites”

– “Stain not sticking to wood decks”
– “Trying to push volume, not quality products”
– “Wear”

Best Thing About Deck Suppliers and Manufacturers

Participants were asked to state the “best thing about deck suppliers and manufacturers,” and here’s how they answered:

– Availability
– Eager to have your business
– Product selection
– They will try to get you the best prices
– Willing to listen to change

Participants were asked what “drives them crazy when dealing with deck suppliers and manufacturers,” and here are the responses:

– Don’t care about you once they have
your business
– Inventory
– Lack of inventory / products
– Lack of inventory planning
– Lack of knowledge / inventory
– Pricing
– Pushy
– Quality

Going Green?

Though many of the newer deck products are very green indeed, with high percentages of recycled or recyclable materials, only three of the eight decking contractors answered “Yes” when asked if they were “hearing or promoting green more with customers.”

MRA suggests (and LBM Journal agrees) that “the lack of green awareness could be attributed to the unclear definition of Green in the deck building industry, or in general.” Further, there are clear misperceptions in the market that the study pointed out. In particular, “pressure treated wood was viewed as hazardous waste and subsequently not a green product.”

Consumer Response and Selling Techniques

The research uncovered that, in the eyes of their customers, deck projects are increasingly about “‘uniqueness’ or ‘wow’ factor.” (“Wow” factors specifically include: glass rails, stone columns, two-tone decking.) The decks allow their customers “to show off their deck to others.” This uniqueness or “wow” factor is all about creating or fulfilling the “dream” for the customer. When the deck builder creates the “dream,” more referrals come in and these will result in more business. Suppliers can help deck builders create this initial “dream” for the customer by providing samples and information for the deck builder to use during sales efforts.

Key Purchasing Factors

Participants were asked to state “key purchasing factors” for decking products. After identifying them, they were then asked to rate these factors from “most important” to “least important” (1 = most important). As you can see from the graph below, “quality” beat out “price,” with convenience the least-important factor.

What Deck Building Products to Purchase

Deck contractors were asked to rank key factors when deciding what deck building products to purchase (1 = most important). Shown in the graph at left, the preference of the customer and the deck builder were the top two factors for determining which deck products to purchase. Convenience and inventory were the two lowest-ranked factors. (MRA suggests that “convenience” may have finished last in two research questions because participants believed that good sales people will help them get products whether they are in stock or not.)

Deck Builder Supplier Habits

Some participants said they will stick with one supplier for ordering all of their materials, and that the reasons for sticking with the same supplier include 1) free delivery, 2) knowledgeable staff about the deck building business, and 3) overall quality products.

However, when the question was framed into an “indies – vs – big box chains” debate, the group viewed Home Depot as “a threat to their businesses because they build decks as well.” The participants said they “would not shop at Home Depot under any circumstances,” because it was viewed as helping the competition. That said, even among stores in an independent chain, contractors will patronize a single store over another because of a more knowledgeable sales staff, proving once again that an educated, well-trained sales force is your best overall sales tool. No surprise there.

Other Conclusions

There was clear consensus in the focus group over a number of issues. First, it is clear to the pros MRA talked with the deck building industry will be changing dramatically over the next several years, becoming “an industry within itself.” Over that time, deck replacement will become more prevalent.

Participants also said that they would not support suppliers, large or small, if they are viewed as competition. They also said that stores like Home Depot may actually be hurting themselves by offering deck-building services, because independent deck contractors may refuse to shop at Home Depot altogether for deck and non-deck supplies.

Participants initially claimed that they are “driven crazy” by inventory issues with their suppliers and manufacturers. Yet later in the research process, inventory issues were listed as having low importance. As the MRA report concludes, “this could be a result of deck builders being so used to inventory issues that they are no longer fazed by them and have just accepted these issues as part of the industry.” If that conclusion is correct, then that is another area where aggressive suppliers can really shine.

Founded in 1990 by JOHN CASHMORE, Minneapolis-based Market Resource Associates is a full-service research firm with
extensive experience in all sides of the residential construction industry—manufacturing, distribution and retailing. MRA offers: consulting services; quantitative, qualitative and secondary research; industry reports and automated inbound telephone surveys. The results of the report detailed in this article are available (in DVD and Powerpoint format) directly from MRA for $550. To learn more, visit www.MRAOnline.com, or call 800.795.3056