Tuesday, January 31, 2012

Don't Sell Yourself Short

How Using A Price Guide Can Increase Your Profit by 25 - 30%

One of the most interesting conversations I’ve had recently came the other day when I was talking to a customer about Pricing Guides.   The customer was raving about how the 2012 Sign Contractor’s Pricing Guide was an invaluable selling tool.   My own experience with estimating tools and/or price guides was that they were a nice tool ballpark a quote, but at the end of the day you have to price your products to be competitive in the market and some of the guides and tools I’ve looked at get pretty expensive pretty fast.
                The interesting part of the conversation came when my customer explained how she used the Pricing Guide as a selling tool with her customers.  She explained that when quoting a job, she actually sits down with the customer, pricing guide in hand and costs out the job to her customers’ specifications directly from the book.  She walks them through each item, adding up the costs and discounts to arrive at a final price for the job.  According to her, 90% of the time her customers accept the quote without even asking for a discount.  As we talked I realized that it was the transparency of the process (sharing all of the information with the customer) that helped build trust between the sign maker and sign buyer and the use of a third party tool like the Sign Contractor’s Pricing Guide reinforces that trust.
There are a lot of choices when it comes to pricing guides and/or job estimators.  There are software estimators that are available at a very reasonable price such as EstiMate and Sign Estimating Calculator.  And there are free software versions from Roland and SAi that come free with VersaWorks and FlexiSignPro.  There are also several hard copy versions like the Sign Contractor’s Pricing Guide that are available for around $20.   The point here is that you don't have to try and reinvent the wheel.  The nice thing about most of these tools is that they capture and itemize all of the costs of a job taking into account shop overhead, labor, design costs and many other costs of running a business that people often forget about.  The end result is usually a price that is 25 – 30% higher than what you would have quoted the customer without a pricing guide.  That translates to 25 – 30% more profit per job!  Simply because you were honest and upfront with your customer about what the job really costs.
So give it a try the next time you’re quoting a job.  Crack open that dusty pricing guide or turn your computer screen around and show your customer the job estimator you’ll use to quote their project.  And whatever you do, don’t sell yourself short!

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