Determining the right price for custom sign projects is a nuanced task, with complexities that extend beyond a standard price list. While there isn’t a one-size-fits-all solution, certain fundamental strategies can guide you through this intricate process.
If you find yourself grappling with this task, seek guidance from experienced sign providers. At Signarama, we offer franchisees the flexibility to tailor their pricing strategies, while providing essential guidance. Here are key principles to keep in mind:
1. Base Pricing on Value, Not Just Costs: Initiate your pricing strategy by considering both tangible and intangible elements. While labor and materials constitute tangible expenses, remember to account for the value of your time and expertise. Charging only for hard expenses often undervalues the consultation services provided, turning you into an inadvertent project manager for free.
2. Factor in the Customer’s Perspective: The most significant variable in pricing is the customer. Understanding what they are willing to pay hinges on the importance of the project to them. Assessing this intrinsic value enables you to determine the worth of your work. When presenting the price, focus on conveying the overall value rather than breaking down every cost element.
3. Avoid Nickel-and-Diming: Resist the temptation to justify your pricing with a detailed breakdown, as customers may seek ways to trim costs. Instead, present a cohesive, turnkey solution tailored to their specific needs. This ensures they perceive the value in your unique offering rather than viewing it as a generic package.
Practical Tips for Smart Sign Pricing:
a. Understand Your Market: Conduct thorough research on competitors through methods like “secret shopper” investigations. Engage with your customers regularly to gauge their perception of your pricing. This feedback loop helps in staying competitive and adjusting your pricing strategy accordingly.
b. Regularly Adjust Prices: Given that costs increase annually, it’s prudent to review and adjust your prices accordingly. Incremental increases are often more acceptable to customers than sudden spikes. Communicate openly about the need for adjustments while emphasizing your commitment to maintaining service quality and value.
c. Be Cautious with Discounts: When faced with a customer presenting a lower quote from a competitor, evaluate the comparability of the proposals. If it’s not an apples-to-apples comparison, maintain your pricing. If it is, consider the long-term relationship and aim to retain the customer by offering added value rather than immediately resorting to discounts.
In the business landscape, setting the right price is the linchpin for profitability. Avoid complacency, stay informed about market dynamics, and consistently reassess your pricing strategy. This proactive approach ensures that your pricing aligns with the value you provide, safeguarding your business’s financial health.
A.J. Titus is president of Signarama, a sign and graphics franchise and the largest brand at United Franchise Group. In his role, A.J. leads the brand’s growth efforts worldwide while also helping current franchise owners expand their businesses and maximize profitability. Additionally A.J. is president of Starpoint Brands, a family of trusted, award-winning brands that provide products and services known for quality, reliability, and value.