Navigating the Impact of Rising Prices
Insights from Principia’s BuilderSeries® Voice of Customer Survey
In the ever-changing landscape of the building materials marketplace, the challenge of rising prices has become an undeniable reality for all participants across the value chain.
Survey question: What portion of the price increases you’re seeing have you been able to pass along to your customers?
This shift in behavior indicates that builders and installers have reached a threshold beyond which they feel customers can absorb further price increases without adversely affecting competitiveness. Acknowledging this crucial sentiment is vital for product manufacturers seeking to understand and address the challenges their customers face in the marketplace.
Confronted with this reality, builders and installers are at a crossroads with two distinct options.
- The first choice entails absorbing the price increases and accepting lower profit margins. Although this path might preserve customer relationships in the short term, it could impact long-term business sustainability and growth.
- The second choice entails exploring brand switching and actively seeking lower-cost alternatives to maintain historical profit margins while meeting customer expectations.
The new reality
The impact of rising prices in the building materials marketplace is undeniable, affecting both homebuilders and installers. The data from Principia’s BuilderSeries® Voice of Customer survey illuminates a shift in behavior, as builders and installers express a reduced willingness to pass on further price increases to their customers. This new reality should serve notice to manufacturers to understand the options their customer may explore to offset rising prices.