New Zealand Business Confidence
Business confidence is a useful indicator of demand in the trades space, as this index reflects the optimism that business owners have that things are going to get better, or worse in the year ahead. As it stands, 50.3 percent of respondents expect general business conditions to deteriorate in the coming year.
Over the last 6 months, we’ve seen an increasing number of support tickets from homeowners confused or concerned with the price range in the quotes they’ve received. This feedback from our perspective, serves as an indicator of the varying methods, margins and cost of materials used in the quote.
Race to The Bottom
Homeowners like assurance, security, and consistency. While there are many homeowners that gravitate to the lowest price, in our experience, if the price difference between the lowest quote and highest quote is too high, homeowners lose faith in both quotes and generally reject both.
This is not good for any party.
A race to the bottom occurs as businesses, and sole traders operating in the trades space begin to sense demand easing. In an effort to solicit more work more competitively, margins or profit on the job are cut in an attempt to come in with the lowest price. By reducing margins, profits are reduced, risk is increased and in some cases, quality and deadlines can suffer.
While difficult to quantify, we estimate that over half of all jobs coming into our system are from homeowners who value finish quality, working to deadlines, presentability, professionalism and other qualities over bottom line cost. Of the more cost sensitive homeowners, timely responses, professionalism, and building trust can win work – over simply coming through with the lowest quote.
In the worst cases, we are seeing homeowners walking away from our platform, and you, our tradespeople – simply because the difference in pricing is too high from the cheapest to the most expensive, in turn eroding trust.
We’re Working Hard to Find More Work For You
We work across a variety of fronts to find work for you. We invest nearly 100% of our revenue in further developing our platform and advertising across multiple channels. From online marketing to offline, appearances on The Block, newspapers and magazines and much more, we are working hard to find you work through this period of easing demand generally.