|An Opinion About The Sign Game By SignManiac
Bob Stephans..Skywatch Signs
Whether you agree with the following or disagree does not matter to me. I share with you my philosophy on selling and pricing sign work. I would hope that those of you who believe that what I say makes sense, will implement some of my ideas and profit from these suggestions.
Those who disagree please don't whine about it to me. What I have to say is what I practice and what I preach. I'll say this right up front. I have five competing sign shops within a four-mile radius of me. They all cut each other's throats under bidding each other to get the job. I go along minding my own business and do not care what they charge. Some good has come from this. They see my work and know that I am selling and getting three times the price for my work than what that they do. Recently, I have noticed that they are trying to emulate my work and I take that as a compliment. It will hopefully raise the overall standard and quality of work in this community and that can only benefit everyone.
What follows is an excerpt from my course curriculum that I teach new people who are starting out in the sign business. I would hope that some of you can benefit from this in some way. If everyone shared my viewpoint, we would all be making the money we deserve. But alas, I know all to well that few will do much to change their situation. It will always be easier to make excuses than it is to make to take action. Attitude can work for you just as insecurities can work against you.
Also, ignore any grammar or typing errors here. Writing is not my strong suit. I do not write articles or submit photos to the sign magazines. I strive to create the best possible signs within my abilities and get the highest possible prices for my work.
My objective in the class I teach is to teach the craft of sign making but my priority is to teach the "Art of making money". The subject is a deep and complex one. I delve straight into the psychological aspect of selling and pricing sign work. I teach how psychology relates to selling your work and also the psychology involved in dealing with the people who will become your future customers. I cover the psychology involved in the design process but only briefly touch on that here. That's another chapter I teach later on in my course.
Knowledge is what students are paying me for. This knowledge is intended to help them grow in their craft and to help them start their business on a success based foundation. Knowledge pertains directly to confidence and confidence pertains to selling. Customers will read you like a book.
If you show any sign of weakness, uncertainty, or inability to deliver professional quality work, they will pick up on that. The reverse is true. You must learn to read your customers as well. It's very important for you to weed out the customer who may not be worth your valuable time. Experience will be the ultimate teacher here.
You can look at it two ways. "You need them" or "They need you." The later choice is the only one to consider. Never let it be the other way around. Never appear desperate to get the job, even when you are.
When a stranger calls you about a sign project, you must project the image that you are a professional in your field. You must project to the customer that you are the one in control. Do not let the customer turn that around at any time. It's your responsibility to handle their sign needs with the assurance that they have nothing to worry about. That's what makes you the professional. If they could do your job they would not be seeking your valuable expertise. Note, the keyword is "valuable".
One area of public relations that can be easy or difficult for many people involves the human interaction side of the business. Some of us are naturally more outgoing in our personalities. Often, being personable will have more of an effect on sales than anything else you do. The sign business is a people business. You are not only building new clients but relationships as well. You will be surprised at how many personal friendships will evolve from your sign business. Over the years I have gained many lifelong friends who respect and trust me totally and my feelings toward them are mutual.
Learn to give yourself no more than five minutes from the time a stranger walks into your shop to gain his or her trust. If you are good at this, the customer will instantly feel at ease with you. This is important. Learn to make them comfortable with you. If you ask intelligent questions and can give them accurate information, you will gain their trust. Trust is important in this business and any other business. It's vital to all relationships. Business and personal. This is only common sense and most of the things we do in life will involve common sense. Keep things simple and in perspective.
Many times, the nature of the sign they are seeking will give you clues as to what their interests are. It may be a new business they are opening, a hobby, sport, or even their family. If you can get them to open up about something they enjoy, they will tell you more about them selves than you would ever expect or even care to know. This is good. People like to talk about things that are important to them. It is far better from your standpoint to be a listener than a talker. I like to allow 10 or 15 minutes for the chit-chat. Then it's time to get down to business.
Once the ice is broken, get right to the point. Discuss their sign needs.
Listening is the most important thing you will be doing if you are to solve their signage requirements. The purpose of a sign is to promote their advertising, whether it's a display sign or informational sign. It may not even be for a business. It could be a house sign or even a gift for a friend. To do this effectively, you have to gather as much information as possible. You will use this information to determine what kind of sign will best suit their needs. The hardest thing you will encounter in the interview process is how to tactfully tell a customer that what he thinks he wants may not be in his best interests. How many times have you done exactly what the customer wanted knowing that it was wrong? I can't recall the last time I ever did what the customer wanted knowing his sign would look like crap. If I were to do it then the sign would be a poor reflection on my work. Why sabotage your own reputation?
Many considerations have to be made before you can achieve this task. The customer's budget is first and foremost. It's a waste of your time and the customer's time if you try to sell an expensive sign when the client can only afford an economy sign. There is nothing wrong with doing the economy signs as long as you make your necessary profit on those kinds of signs. I don't mean marginal profit either.
Often I have asked a customer what they have budgeted for the sign and they have no idea whatsoever. If possible, get a price range of what the customer can afford. By finding this out up front, you don't waste valuable time interviewing them or designing a sign that they can't afford.
It's possible that you will not be able to do anything for them at all. In this case I politely explain to them that I am not able to help them, and may suggests that they see one of my competitors who specialize in the economy type of sign. The customer will appreciate your effort to help him. Possibly down the road he may have a better budget and come back to you because your work is of better quality and has a higher appeal. Be careful though. Don't send them to someone with a bad reputation or it may come back to haunt you.
Quite often the cheaper shops will be so overwhelmed with work that they can not meet their promised delivery times. If you fail to deliver the customers sign by a promised date, they become very upset and then tell others that you can't be relied on. Try never to miss a promised deadline. You will earn a valuable reputation for being dependable and a person of your word. Honesty is very important. If something beyond your control should arise, then have the courtesy to call the client and let him know ahead of time. Many of your customers run businesses too and will understand. Communication will go a long way in eliminating misunderstandings.
"Time is Money." Your time is extremely valuable. The amount of work you can produce in a given amount of time will determine how much money you can make. Wasted time means lost money!
Another important part of selling is to get a deposit. Never take on work without getting at least 50% down on the job. This is not unreasonable. You are creating a custom made product and you are not likely to sell the sign to someone else if the customer fails to pay for it. If the customer balks about giving you a deposit then he probably doesn't have the money to pay for it when the work is done. Not only are you out your labor but also the materials that you still have to pay for. If you have half of the customer's money, you can be fairly certain that they will come to pick up the sign when it is completed. They sure don't want to throw away the money they gave you up front. It gives you that little extra insurance that you will get paid for the job.
One very important way to sell a sign is to give the customer three different options. What's known as the three tiered pricing system. It's been used for many years and works very well. Let them choose what is affordable to them. I will offer them an economy option, a nicer custom option, and last a deluxe option. Most of the time they will chose the middle option. Funny thing, but people don't want to appear cheap and occasionally they will surprise you and chose the deluxe version. You can never be absolutely sure what they are thinking.
You are essentially steering them to where you want them to go which in most cases will be the middle option. When using this method of selling, the price difference between the first and last options can be a huge difference. If you have determined that the customer wants to do business with you then you are in a good position. What you would normally price an economy sign for can now be raised even higher to appear in line with the other two more expensive options. Should they choose the economy option you can make an excellent profit on that sign.
Let me give you an example. Let's say they are looking for 3' x 6' sign. Based on a square foot price you would sell the economy sign for approximately $10.00 to $15.00 a square foot. At least that is what I charge. That would give you a selling price of $180.00 to $270.00 an equivalent sign of the same size sandblasted based on a sq. ft. price of $50.00 to $75.00 would sell for $900.00 and $1,350.00 and the deluxe carved dimensional version at $100.00 to $125.00 a sq. ft. would go for $1,520.00 and $2,250.00. This is an extreme range of prices. You can now raise the price of your economy option to $450.00 and $600.00. This relates better to the other prices. This price works out to $25.00 and $33.00 per square foot. These are exceptionally good prices on a basic sign. Not that you can always get them but when you do, you smile all the way to the bank.
Determine the application of the sign first. You do this by interviewing the customer. You will ask many questions of them if you are to design the most effective sign for their business. They may have an existing logo that you will have to reproduce and incorporate in the new sign design. You will have to determine the best placement for the sign so that its intended audience will see it. The copy must be legible. Prioritized in order of importance. The colors must relate to the type of business. Sometimes the architectural details of the building or site will factor in. Other considerations are the surrounding and competing signs. You want your customers sign to be distinguishable from the others so that it will stand out from all the others. It should be unique if possible. These are just a few of the many questions you will have to get answers to. You will learn many more as time goes by.
Business failures happen because the owner has no idea how to run the business from a numbers point of view. You are not in business to satisfy your own ego, you are in it to make respectable money. Don't forget that. Typically the business ends up running them. There are many "serious" mistakes that new business owners make in the beginning. These mistakes are costly and very hard to correct after the fact. If you start your business with no understanding of what your costs are, you could possibly lose money on your work. This is insane. If you are going to work for nothing then go into the charity business.
Every business has overhead. Even a home based business. Utilities, advertising, insurance, licenses, office supplies, materials used in making the signs, and don't forget to recoup the cost of your investment in the tools you use. You have just invested a large sum of money and should not forget that in your pricing equation. You will find many more expenses along the way. By properly factoring these costs in, you will be able to build a predictable profit into your business. There are plenty of good books available in bookstores, libraries and the internet that can teach you how to calculate your cost of doing business. Factoring all of the above information in so that you can arrive at an hourly shop rate with a defined profit margin built into your prices.Common mistakes that lead to business failures:
In the beginning you will be hungry to get the work in. You figure hey, I'm working out of my house so my overhead is lower than "Mr. Big Sign Company" down the street. I should be able to get this job by quoting a lower price than "Mr. Big Sign Company", Great you get the job.
This is a serious mistake and the wrong way of thinking. The customer tells his buddy when he needs a sign, to check out "Mr. Lowball Signs", That's you by the way. That referral comes into your shop and isn't going to pay more than what you charged his buddy. You have now set a dangerous precedent. You have earned a reputation for being the cheapest guy around. Extremely hard to increase your prices by 50% the next year once you realize that you aren't making enough to pay your bills. Even if you only increase your prices 10% a year it will take you five years and that's a long time and a lot of work.
Consider it this way. If you are capable of selling the same service and quality as your competition, then you should expect to receive the same price for your work. Do not forget why you went into the sign business. You want to earn good money. Never mind what the competition is charging. They should not be the ones setting your prices. I can tell you now that you will be asked to bid on jobs. I personally do not like to bid against sign shops and often tell my customers just that. It's a waste of my time because I know that the customer is shopping around for the lowest price. The competition's price is almost always lower than mine. You will waste precious and valuable time calling suppliers on your dime. Also valuable time to calculating your material costs and the wasted hours putting together an estimate that is sure to be beat by the lowball guys out there. That time can be better spent on paying jobs.
"A statement I read by Mike Jackson"
In this business, You will be making the same signs tomorrow that you are making today. Something to that effect. This is absolutely correct. Once you've built up this cheap-o client base, you will find it almost impossible to raise your prices to a level that will allow you to do the more profitable jobs. Now you are buried knee deep with non-profitable jobs and that defeats the whole purpose of gaining financial independence.
If you start off pricing your work so that you can offer your clients a higher quality of work, they will perceive the value of your product and service as "money well spent." The higher the quality of your work, the greater demand you will create for that work. The greater demand for your work the higher the price that you will be able to command.
They will refer you to like minded customers who value quality and service more than the bottom line. Understand that not every customer who calls you will have the budget for the more upscale sign. That's okay. You don't want or need every job that comes to you.
Select only the profitable ones and you won't have to get all the jobs. There will always be the lowball bottom end vinyl pirates out there who are anxious to work for nothing. That's good for us. We don't have to service those customers and nor should we. These are the guys that fail in business because of shoddy work and many other factors. Please don't misunderstand me. Not all vinyl shops, franchise or independent are undercutting. Some are making fortunes but that's because they understand the numbers side of the business.
In charging the higher prices you gain even more. It gives you the ability to use superior materials. This reduces the chance of call backs from jobs that fail. It allows you to purchase better quality tools that make your work easier, faster, and better. It gives you the extra money to expand your knowledge by attending seminars and advanced workshops to improve your skills even further. The more skills you have the more valuable you become.Over the years I have developed what I call the reverse psychology approach to selling my work. I purposely do not put my name on any of my work. A potential customer driving down the road stops at a sign you created. He sees your company name on it and writes down your phone number. He might call you and possibly come in to see you. But he has no idea what your signs cost. He may like your work but be shocked by your price.
Instead, I purposely DONT put my company name on the customer's sign. If this prospective customer really likes your sign, they will go into the owner's place of business to find out who made it. He will compliment the owner on his beautiful sign. The customer you did the sign for is now getting direct feedback from the sign. He sees that it is in fact attracting people. The compliment is a stroke to his ego. This is instant justification that the money spent on the sign was worth every penny. The potential customer will invariably ask, how much the sign cost? The owner will tell him the price and in some cases will feel as though his sign is a status symbol because he can afford such a nice sign. I've had customer's brag about how expensive my sign was. Doesn't get better than that.What you are developing here is "Word of mouth advertising" The best advertising you can ever hope to gain. When you're customers are your best sales tool, you know you are doing something right.
Bottom line. This potential new customer is what I call pre-qualified. He sees the quality of the work you do. He has spoken to a satisfied customer who thinks you are the best around. He knows that you are expensive but do good work. When he comes to see you, price is not the issue. He is coming to you by his own choice and wants the better sign knowing about what a sign of that quality cost. Price is no longer the primary concern.
The sign shops that do the exceptional work are few and far between. There aren't enough quality conscious sign shops out there to service the many professionals who value good work. Strive to be exceptional. The computer has made it possible for many to get into the sign business with little or no training in art or design. I strongly believe it is possible for someone with no training in art to learn and become an artist. Anything can be learned. I don't sell boards with letters stuck on them and call it a sign. I sell signs that convey an image that will promote the customer's business in the most profitable way. A sign should never be considered an expense, a sign is an investment. A signs job should be to make the customer's place of business. Thats often where we forget what makes a sign so valuable and that needs to be factored into the price of the sign. Colleges have continuing education classes for business, art and many other fields that can only help you increase your skills. The sign industry has many work shops and seminars held at the big industry trade shows. Weekend courses offered by talented sign people in the various facets of the sign business are available. By becoming more diverse in your skills, you will be able to sell more variety and types of work. This will increase your sales and profits. Learn, learn, learn.
Even if you don't have the skills to do other types of signage, you can sub-contract the work out to other qualified shops and sell the work at a marked up percentage. This kind of work can be even more profitable to you as you are not tied up with the production of these signs. Nor do you have to invest in some of the specialized tools to produce that particular type of work.
Sell it, deliver it, and pick up the check. Last year I received an order for 500 12"x24" magnetic truck signs. The company wanted a twenty-four hour turn around on this order. This is known as a rush job. Rush jobs carry a premium price. The price I quoted made it worth staying up all night long. The selling price for this job was $9,000.00. The magnetic material for this job came in at around $1,000.00. The vinyl would have cost another $500.00.
I called my competitor up the road to borrow a speed press for applying the vinyl lettering. He asked what I was working on and I told him. He said he was slow that day and could silk screen the signs for me that day for a dollar each. I said sure thing. I delivered the magnetic material and artwork to him, then went and played a round of golf. Five hours later the signs were finished. I shot a decent round, and netted $7,500.00 profit. Should have seen the smile on my face that day.
Consider this. You sell $200.00 signs and your competition sells $20.00 signs. He has to sell ten $20.00 signs in order to earn what you make off of one sign. He also has to deal with ten problem customers and the aggravation that goes along with these cheap customers. Not only do they want you to do there sign for nothing yet they expect even more from you to make sure they get every pennies worth of that $20.00 job.
Another serious mistake you can make. Customer wants a quotation on a nice sign. You tell him that the sign will cost $800.00 He starts gasping and choking feigning a heart attack. He's shocked at how much money you want and asks if that's the best you can do. You are afraid he will walk out the door and you might lose this sale. So you apologize to him and tell him you might be able to do it for $700.00 in order to save this job. Guess what you just told the customer? You have essentially told him you were ripping him off for an extra $100.00 That's right. If you can do it now for $700.00 then why did you ask him for $800.00 in the first place?
The point I'm making.... Once you quote a price, stick to it. The only time you might offer a discounted price is when there are multiple signs involved. You can save the customer money on a project when making two or more signs because of the setup time involved. When the customer asks me if that's my best price, I tell him yes. I figured it out right the first time. Another common scenario. A customer wants a sign done and you are not busy at the time. You could make the sign while the customer waits. I don't like to do this for a simple reason. You quote him $50.00 and it takes you ten minutes to do. They do some simple arithmetic and figure out what you are making per hour. They may decide you are not deserving of that high an hourly rate.
Little do they know or care that you have spent thousands of dollars and years learning to make these sign that quick. Instead, I tell them that I am extremely busy and they will have to pick the sign up tomorrow. The implication that you are busy tells them that you must be very good to be that much in demand. After they leave, go ahead and knock out that fast easy sign. By letting the customer assume it will take you hours to produce they will figure the price of the sign is okay.
In summary. This philosophy is one that I have spent years developing. It works contrary to what others will tell you. Never forget who the Boss is. This is your business and you deserve to get paid fairly for the investment you have made in your education and equipment.I hope that some of you can benefit from my "Opinions" This only scratches the surface. The rest just comes from experience. You will make mistakes but learn by your mistakes. Mistakes are costly!
E-Mail Bob at email@example.com
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