In 2024 and into 2025, elevated interest rates reshaped the construction landscape — slowing some segments while pushing others to adapt. But while macroeconomic uncertainty created pressure, it also revealed important insights about how customers make purchasing decisions when financing becomes more expensive.
From builders to contractors and developers, customers adjusted how they bought materials, what they prioritized, and who they partnered with. For distributors and suppliers, these changing preferences created new risks — and new opportunities.
Here’s what the last 12 months taught us about customer behavior in a high-interest rate environment — and how to apply those lessons going forward.
1. Cost Control Mattered — But Not at the Expense of Reliability
With financing costs eating into margins, customers became more price-conscious. But in many cases, reliability of delivery and supply took priority over chasing the absolute lowest price.
What We Learned:
Contractors were willing to pay a premium for consistency — especially for critical-path materials. Distributors who could fulfill quickly and communicate clearly kept more business, even in a price-sensitive market.
2. Speed Became a Competitive Advantage
High interest rates made time literally equal money. Delays in delivery, changes to material availability, or rework caused by poor-quality materials all resulted in cost escalation.
What We Learned:
Customers gravitated toward suppliers who could reduce risk and shorten timelines. Fast quoting, accurate inventory data, and dependable logistics became primary differentiators.
3. Project Phasing Changed Purchasing Behavior
To manage cash flow and reduce interest burdens, many customers phased projects more aggressively — spreading out materials purchasing across narrower windows.
What We Learned:
This shift required more flexible fulfillment, smaller order sizes, and tighter alignment between sales reps and jobsite schedules. Blanket purchase orders and bulk deliveries gave way to just-in-time replenishment.
4. Customers Wanted Predictability More Than Discounts
While everyone likes a deal, rising interest rates created a bigger appetite for price visibility and cost certainty. Escalating quotes, surprise fees, or vague lead times became red flags.
What We Learned:
Distributors who provided clear pricing structures, material escalation forecasts, and fixed-term quotes earned trust — and repeat business.
5. Value-Added Services Became More Attractive
With leaner jobsite teams and tighter timelines, customers increasingly favored suppliers who could do more than just deliver materials — like staging, kitting, pre-assembly, or documentation support.
What We Learned:
When labor is costly and timelines are compressed, value-added services provide real ROI — and are often easier to justify than raw price increases.
6. Financing and Terms Became a Bigger Factor in Vendor Selection
With borrowing costs high, cash flow flexibility became critical for contractors and builders — especially smaller firms.
What We Learned:
Suppliers offering extended terms, staged billing, or flexible credit programs gave customers room to breathe — and earned a competitive edge, even in commoditized product categories.
7. Communication and Transparency Were More Important Than Ever
Uncertainty leads to risk aversion. Customers didn’t just want materials — they wanted regular updates, early warnings, and real-time visibility into supply status.
What We Learned:
Distributors that prioritized proactive communication built stronger relationships. Even bad news delivered early built more trust than surprises.
8. Buyers Became More Selective with Vendors
With tighter margins and less room for error, customers re-evaluated their supply chain partners. Loyalty was no longer automatic — it had to be earned through performance.
What We Learned:
Reliable vendors saw consolidation of wallet share, while inconsistent ones lost ground. The result? A more focused, performance-driven supplier landscape.
9. Buyers Wanted Strategic Input — Not Just Materials
As complexity increased, customers leaned on vendors not just for fulfillment, but for guidance. From product selection to availability trends and cost projections, they wanted a partner who could help them plan smarter.
What We Learned:
Distributors who shared insights, not just pricing, strengthened their role as advisors — and became harder to replace.
10. Efficiency Became the New Currency
Ultimately, rising interest rates made inefficiency more expensive than ever. Customers favored vendors who could help them cut waste, reduce delays, and improve workflow.
What We Learned:
Speed, precision, and simplicity are now core customer values — and every part of the customer experience needs to reflect that.
Conclusion
The past year in a high-interest rate environment has reshaped customer behavior — emphasizing value over volume, predictability over price, and partnerships over transactions. Distributors and suppliers that embraced these shifts didn’t just survive — they built stronger customer loyalty and positioned themselves for sustainable growth.
The lesson is clear: In tighter markets, the winners aren’t the lowest-cost providers — they’re the most responsive, reliable, and resourceful.
