SignWarehouse received this email from a customer asking about pricing…
“We are having some difficulty quoting our customers for vinyl logos. We sometimes hear that we are too high and other times we hear that we are priced far below others. We have not been able to come up with a standard price sheet and we are all over the place with our quotes. Do you have or know where I could find a suggested resale price list that could help us?” – perplexed about pricing in Seattle
Above all else, you need to know what YOU need to charge to cover your true cost of doing business, PLUS make a profit – your “just reward” for having to agonize about questions like the one you are puzzling about right now!
The second thing I would do is survey my competition (not to base your prices on theirs but instead to see what you are up against). Basically, come up with a typical design job or two, and then get a phone and call your competition to see what they are charging to run that job. One color, two color, quantity 1 to 5, 5 to 10, etc., etc. (Don’t worry, your competitors are shopping you, too!)
When we ran our sign shop, I would get my wife to do this from home using call block (which I believe is *67). This would take quite a while, sometimes several hours, because we would call everybody within a certain radius. A lot of times you might need to leave a number for them to call back with a quote, so having another number available when you start this process is a good idea.
Surveying your competition is important, because it doesn’t make any difference what a pricing guide says to charge. You need to find what shops in your local are are charging. If you don’t know what they are charging you are literally throwing darts at a dartboard. And by checking competitive prices first, you can get a feel if your customers who are complaining about your prices being too high are “working” you or not. And believe me, everybody is working to get a lower price in this economy.
After you get this grid set up, compare it with what you are currently charging. Don’t necessarily assume that you have to match the lowest price of your competition. I guarantee that some of them are pricing so low that they will be gone in a year or two or three. You have to be in the range, or ballpark.
You can get a guide, and I recommend the Sign Contractors Pricing Guide. (Here is the link to the category, just look for the pricing Guides: Sign Making Books )
Remember, a printed guide is a nationwide average, which is why you always need to do the competitors’ price check. Take the Guide prices and check them against what you are charging. Mostly the Guide will help you figure the up charge for all the variations.
It is, however, always easier to “come down” than go up! Here is a slam-dunk way to find out if you are over the customer’s budget and then possibly trim your job specs/price accordingly. After presenting your proposal, if the customer hems and haws or says they need to check with their partner/ boss/ wife/ etc., just say, “That’s fine. But let me ask you while I am here…does the way I have this proposal written meet your projected budget?” That draws the customer out, plus by saying “the way I have this proposal written” indicates that you are willing to “re-write” it. Much of business is negotiation and someone has to start the ball rolling with good communication. It might as well be you!
When you come up with your own pricing guide, format it in Word (or a comparable program) then print it off, put it in sheet protectors, and stick it in a notebook. At least you will have something that will allow everybody in the shop to quote a sign consistently, and we hope, profitably.
P.S. Don’t forget to call your prospects back. We always called back folks we had quoted if we didn’t hear from them in 7 to 10 days (or I would go visit them). We would just tell the customer that we were planning our work flow over the next week or so and were asking customers if they had they made any decisions. Usually they would say they hadn’t, or just get evasive so we would ask them right out, “Did you get the job done anywhere else?” The key thing is we wanted to find out if the account was still in play. If the customer went with another provider I was always very gracious and asked what would have swung them over to my side (just for my next proposal). If you are careful not to put any guilt on the customer you will pick up some valuable information this way.