Raising prices is nerve-racking for any small sign shop. You don’t want to charge too much and risk losing potential or existing sign customers, but you don’t want to charge too little either. Charging too little means death by many little pains, if you lose a little money on every job, you will still go bankrupt, it just takes longer!
Surprisingly in this recession, we are dealing with the rising cost of vinyl film, sign substrates, and other basic sign making supplies. Much of what we use in the sign industry is made from oil-based plastics, and oil has gone up by $20 to $40 a barrel since 2009, according to one industry estimate.
So, there comes a point in every business where you just have to bite the bullet and start charging more for your services. Here are 5 simple tips that can help you to successfully raise your prices while keeping your sign making clients happy:
- Pick the right time. You need to take a look at when your sign shop books the most business, and when it is the least busy. It is always easier to increase pricing at a peak time, rather than a off-peak time.
- Go gradually. Start by increasing prices by a small percentage, and continue to raise over time until you are happy with the increase. Repeat customers will notice the bump, but if you don’t it gradually it will only be a blip on their expense radar. Keep in mind that you have to use common sense… a yearly increase is easier to deal with rather than one every month.
- Remember that you are not the customer. While the raise in prices is a huge deal to you, it is just one more cost to them.
- When you deal with a repeat customer, simply go over the order they have requested and tell them the final price for their order. You do not need to specify that it is different from last time, or that you are charging more now. Just give them an honest quote for the project and if they have objections, let them raise them.
- If the customer does mention the increased cost, simply explain that as of X date you had to raise your prices X percent. If there is a way to lower the cost of their order, offer to do so. Likely they will keep their original request and business will proceed as usual.
- Never justify having to raise your prices. When you quote the price to your customer do it in a smooth, routine fashion. If there is an issue, try offering a more basic product that will cost less. On the other hand, if the customer does ask, or if you sense price hesitation, it’s best to meet the perceived problem head on. (See paragraph #2, above.)
Don’t allow fear of your customers to keep you from raising your prices. Quality work demands quality pay. If you produce a product that thrills your customer, they will likely be happy to pay the rate you request, as long as it is within reason.