The EstiMate Software Blog

“The biggest mistake many businesses make is to believe that price alone drives sales.” — Elizabeth Wasserman, Inc.com.

I read Ms. Wasserman’s article titled “How to Price Your Products” this morning, and if you know anything about me by now, you know it inflamed my passions.  She very accurately describes the processes required for pricing products accurately and consistently.  I think we all know a lot of what she says to be true; however, in the sign industry, our products just don’t fit the cookie cutter model of pricing – which means every time we price a job, it’s a real challenge to pull all the variables together and get our prices out the door on time.

Why are you in business?

I mentioned a couple of months ago that I was involved in a discussion on an online forum where one of the posters essentially said that he felt he was ripping his customers off if he made a great profit on his work.  This continues to mystify me because the whole reason we are in business is to make money.  Sure, we love our work, the interactions with customers (well – most of ‘em ), and the time we spend actually creating graphic arts for sale.  At the end of the day, though, our whole reason for being in business is to take home a profit that allows us to save for retirement, put the kids through college, take vacations, and ultimately secure our lives.  Otherwise we’re in business for all the wrong reasons. (more…)

You may or may not know that EstiMate was born out of my own frustration when I was running my basement sign shop from 1993-1999. I had grown up in the sign industry, in my mother’s own basement sign shop, and throughout the late 70s and all of the 80s I watched her struggle to price her work. The phone would ring, she would answer and listen to the customer’s description of the sign they wanted made, and then she would say: “just a moment, let me go figure that.”

She would drum her fingers on the desk for a while, all the while staring at her “calculator on the ceiling,” and then she would get back on the phone and say, “that’ll be $500.”

Sound familiar?

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Good, Better, Best Pricing Is A Great Way To Upsell Customers

One really cool trick with EstiMate is to offer good, better, best pricing scenarios to your customers.  If you couple good, better, best pricing with decoy marketing you can usually capture more dollars for your work.

EstiMate makes good, better, best pricing very easy to do. In a nutshell, what you’re doing is presenting three levels of pricing to your customer — the “good” level is, essentially, what they came for. The “better” level can be used more as a stepping stone to the “best” level, which is what you want to sell them.

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Note: This article is written from the sign shop perspective, but is applicably to any small business where time and materials are the bottom line.

The wrong hourly rate (or “shop rate”) can be like a hidden cancer for your business.

How do I know?  Because I almost killed my sign business this way in 1995. Obviously, now that EstiMate Software is my gig, I’m not making signs anymore.  I grew up in the business, though, and ran my own shop for 8 years — so I know a thing or two about how to keep it going and what matters.

One thing I know for sure is that the wrong shop rate can kill your business.  Especially in times like these. The very worst thing you can do is work for cheap.

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