posted
Occaisionally, I have a conversation with a client or potential client about my prices. Yesterday it was one wondering if I could come down from $35 on a one color 18 x 24. Politely I said no, but later, upon reflecting about it, I thought about the reply I might use.
Some thing along the lines of calling the low ballers the "student sign shops", or "apprentice pricers".This would be in the context of explaining that once they figure out what it costs to run a shop, they'll raise their prices or quit.
I know you might be thinking the above price IS the lowballer, but around here I doubt it. That's for intermediate vinyl, not premium. This guy's signs always get thrashed. Big lawn mowers run over them. Tire tracks, pretzel frames, no need for premium. This leads to an interesting question: in the new SC pricing guide, in the $40 P/hour bracket, an 18 x 24 one color with premiun on aluminum is about $42. But a coro sign same size with intermediate vinyl is about $21. Not that much difference in material cost. I guess it's based on customer perception, maybe materials markup?
-------------------- James Donahue Donahue Sign Arts 1851 E. Union Valley Rd. Seymour TN. (865) 577-3365 brushman@nxs.net
Democracy is two wolves and a lamb voting on what's for lunch, Benjamin Franklin Posts: 2057 | From: 1033 W. Union Valley Rd. | Registered: Feb 2003
| IP: Logged |
posted
Its both, IMHO. But, I think that perceived value carries more weight.
Yesterday, I sold and produced a 24x18 coroplast sign (double-faced with Oracal 651 vinyl) for $55. The entire time spent selling the job, producing it and invoicing it took me 45 minutes. Hard to get rich that way.
A few weeks ago, I decided to run a "half-price" special on screen printed coroplast signs. 100 24x18, one color, single-sided on standard white coroplast for $2.65 each ($265.00). Stouse's suggested price for 125 pieces is $5.30 each.
I pay 70¢ a piece for the coroplast. The positive cost me $10. It takes me about 2 hours to turn the job from the moment I set the type to reclaiming the screen.
So far, the response has been terrific and has opened the door to even bigger jobs. I took in an 18 truck fleet job today because of the "special".
Coming up with a decent price while not giving away the shop has always been hard. Finding creative ways sell jobs and attract new customers can be rewarding at times.
The industry is going to continue becoming more competitive. Student sign shops don't help the situation. Adapation and niche marketing is so important these days.
posted
So good to have that Taylor guy back in town...all good comments!
No time to explain this in great detail, James, but one perspective that you might want to consider is establishing some means of striking a balance between the transactional value of that one, crappy little sign that you get asked for (and that you are probably losing money on) - and the estimated lifetime value of each, individual client.
To do this effectively, you need to come up with a system for quickly estimating, then, later, fully assessing what a client's business is likely worth to you over time...assuming that everything realistically possible does come your way (again, over time). There are different models for this. You need to find your own. I recommend keeping it simple, to start, and working your model into your customer database. This is often referred to as a "customer profile". If your database today consists of paper files, then so be it.
There are other "client attractiveness" issues that you should work into your assessment process and database over time, as well...to help you make confident business decisions that will ensure you are spending the bulk of your resources on the highest yield, most-valuable-to-you clients. The frequency with which they order and how promptly they pay are often more important for smaller "undercapitalized" businesses than infrequent, but large transation type customers might be - because cashflow is your lifeblood.
Broadly speaking, you need to develop a competitive strategy for yourself that will allow you some degree of confidence that you can leverage the lifetime value from any client(s) that you set your sites on. Then you need to qualify and quantify their attractiveness (initially and on an ongoing basis), then you need to develop a sales (or account management) strategy for each "highest value client" - and execute your strategy.
Hope that makes sense. Typed in a hurry. May sound very corporate - but applies to all business, large and small. Good luck.
-------------------- Jon Aston MARKETING PARTNERS "Strategy, Marketing and Business Development" Tel 705-719-9209 Posts: 1724 | From: Barrie, ON, CANADA | Registered: Sep 2000
| IP: Logged |
James, I always remember a cartoon, by Bob Parsons I think, about a customer trying to get the price of a sign lowered, and the signie dropping it, but omitting some aspect in each lowered price, and this barter/bargaining went on for some time, ending with "How about if I just go away and do it all by myself & don't bother you at all?" "Then that'll be $18.65" (or some such price).
The irony is that you often feel obliged to give them something for a price you don't like, and it's not a win/win situation but a win/ripped-off situation, which is why the specifics of each deal need to be looked at, as John & Glenn say- it can lead to bigger better things, but you need to be able to evaluate the customer quickly. (good luck!)
-------------------- "Stewey" on chat
"...there are no limits when you aim for perfection..." Jonathan Livingston Seagull Posts: 7014 | From: Highgrove via Toowoomba, Queensland, Australia | Registered: Dec 2002
| IP: Logged |
posted
Quote: _______________________________________________ "Yesterday (customer) was one wondering if I could come down from $35 on a one color 18 x 24. Politely I said no, but later, upon reflecting about it, I thought about the reply I might use." _______________________________________________
But you did'nt mention any details about material or thickness, or single-side . . .but it don't matter . . ..
What other reply is there when customer's wanna pay less??
The only other reply I can think of that I actually use frequently (only half joking) is, "No I can not do it for less. As a matter of fact from this moment on I'm adding another $10 to that price every month for the next year . . ."
The first thing out of the customer's mouth to my statement is: "I don't blame you!! I'm havin' to raise my prices too...gas prices, or shipping costs, etc, are kilin' me!"
BTW . . .I can get $30 for an 18"x24"x4mm coro.
I can get $45 for a simple single-side 18x24x.040 aluminum stock colour.
Custom colour panel, and/or increasing to .063 or .080 can double or triple the price.
Customers are given the benefit of an expalination at the very moment they appear to be wasting time: 'Scuse me but, havin' to 'hash' out too many details and spend 2 hours 'discussing' such a sign can add $$$$$$$$$ to any prices.'
I'm like a lawyer . . .I charge for questions & consulting . . .(lol)
I think I'll paint that statement on a panel and display in a prominent location . . .
(I have no 'quantity' prices since I don't do screen printing or any kind of 'extreme' quantity work)
-------------------- Signs Sweet Home Alabama
oneshot on chat
"Look like a girl, act like a lady, think like a man, work like a dog" Posts: 5758 | From: "Sweet Home" Alabama | Registered: Mar 2003
| IP: Logged |
posted
Figure $1 for the intermediate vinyl, $1 for the coroplast, it really should only be a 10 minute job cut, weeded taped and applied. If shop rate is $60/hr you have $10 in labor.
Your cost is $12 each. If you could sell it for $25 your profit margin is 50% which is good on paper but you're still only making $12.
That's not including any "sell time" so now the challenge is eliminating that aspect of the job using pre-designed display pieces.
Set up a template for that kind of job if it's something you get on a regular basis, then set the prices and post them in the customer area so they know going in what the price is, ie:
"This size" with "this many lines of copy" is "$XX amount."
The reason they're dickering on price is because you're trying to sell something they don't place a whole lot of value on in the first place, and they cannot see the actual product in front of them, so they're already a little on edge about parting with their money. The price is the only aspect of the job they have any amount of control over at this point.
Setting up templates and displaying them with prices does a few things for you.
1. They can actually see what they're getting hanging right there on the wall.
2. Using templates restricts their choices which forces a quicker decision - less time to sell the job. How many times have you searched a database of a thousand fonts looking for the "perfect" one, and how long did it take to located it??
3. Templates can streamline production for YOU. It takes less time to setup and produce a job built from a template which means more money for you.
You can offer a lower price on those types of jobs as long as the customer knows they aren't going to get much room in the decision making process. No artwork, no logos.. They get ONE letterstyle to choose from.. things like that.
If you don't want to spend the time on a job to make $12, or $22 if you price them at $35 you have a pretty simple option open to you: Simply do not offer those types of signs.
If they aren't profitable to you, if they're a waste of time, if all they do is cause you headaches or take up shop space for the materials, if they never lead to larger profitable jobs, drop them.
-------------------- "If I share all my wisdom I won't have any left for myself."
Mike Pipes stickerpimp.com Lake Havasu, AZ mike@stickerpimp.com Posts: 8746 | From: Lake Havasu, AZ USA | Registered: Jun 2000
| IP: Logged |
posted
Yesterday I was asked for a price for (8) 14" x 20" aluminum signs one color. I told the customer they would be $50.00 each. He gave me the purchase order right then. I asked and I received.
-------------------- Bob Stephens Skywatch Signs Zephyrhills, FL
-------------------- Jon Aston MARKETING PARTNERS "Strategy, Marketing and Business Development" Tel 705-719-9209 Posts: 1724 | From: Barrie, ON, CANADA | Registered: Sep 2000
| IP: Logged |
posted
Actually the question was about terminology, but the answers are great!
The aluminum is .032, intermediate vinyl. I've been dealing with this customer for years, there's no sales time involved, usually taken over the phone. Since most of my work is mobile, this is a pretty cool way to fill in some time on a rainy afternoon.
My guess is that they heard of a lower price from a buddy of theirs, I don't know.
-------------------- James Donahue Donahue Sign Arts 1851 E. Union Valley Rd. Seymour TN. (865) 577-3365 brushman@nxs.net
Democracy is two wolves and a lamb voting on what's for lunch, Benjamin Franklin Posts: 2057 | From: 1033 W. Union Valley Rd. | Registered: Feb 2003
| IP: Logged |
posted
Another thing to remember is that there will always be customers for whom EVERY price is too high.
I try not having to explain my prices or discuss what other shops charge. If they think it's too expensive, I explain what they can get for less (smaller, less text or whatever)
While reading the replies to this thread I got to wondering what made me think of charging $35 for a 18" x 24" sign. I couldn't remember the basis of that price, so I became smitten with guilt pangs that maybe I was one of the lowballers myself.
So what I did next I've never done before, but now I felt like I owed it to the trade in this area: I asked my wife if she would go to her folks' house and call around for some sign prices. I had her use their name, and ask for the price on an 18" x 24", and on a 4' x 8' both on aluminum. (Maybe this is big time unethical, flame away if you must, but my motive was of concern for everyone.)
Here are the results:
18" x 24" on aluminum: Shop A: $30 Shop B: $30.69 Shop C:$35 Shop D: $30
4' x 8' on aluminum (.040): Shop A: $250 Shop B: $204.60 Shop C: $154 Shop D: $210
Some of these are the biggest names in town, at least one is a franchise. I don't know what to make of it yet, I've always thought I was middle or low middle. Honestly is shocking.
-------------------- James Donahue Donahue Sign Arts 1851 E. Union Valley Rd. Seymour TN. (865) 577-3365 brushman@nxs.net
Democracy is two wolves and a lamb voting on what's for lunch, Benjamin Franklin Posts: 2057 | From: 1033 W. Union Valley Rd. | Registered: Feb 2003
| IP: Logged |
posted
James, while I think it's smart to have an idea what others in the area are charging I don't think it's smart to base your prices on that.
I glanced at the numbers posted and first thing I saw is that, from the numbers, it appears Shop C has no clue. $35 for a 18x24 (highest) and yet a measly $154 for a 4x8? I would think they are pulling numbers outta their butt, that is just way too inconsistent.
-------------------- Chris Welker Wildfire Signs Indiana, Pa Posts: 4254 | From: Indiana, PA | Registered: Mar 2001
| IP: Logged |
posted
I've never used that thin guage a panel, but an .080 panel costs me a hundred bucks plus freight.
If I paint MDO, it costs me around a hundred and fifty by the time the panel is ready for lettering.
The amount of design time, and lettering and the type of lettering all have some referance to the price. None of this is mentioned here. Would you do serif letters for the same price as an ultra bold sans serif? I find the weeding time and effort to change. What about small lettering? What about when they want multible colors and registration is more critical. I don't know that I'd ever want to just quote how much for a size panel.
-------------------- The SignShop Mendocino, California
Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that's creativity. — Charles Mingus Posts: 6712 | From: Mendocino, CA. USA | Registered: Nov 1998
| IP: Logged |
![[I Don t Know]](graemlins/dunno.gif)
![[Wink]](wink.gif)
![[Razz]](tongue.gif)
![[Smile]](smile.gif)
![[Eek!]](eek.gif)
Printer-friendly view of this topic