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When is the sign industry going to wake up to the fact that we are killing our own industry by under-bidding projects?
The latest job I lost was for the installation of two sets of channel letters mounted on raceways that are approx. 2.5' x 20'. The sign locations on the wall are high enough that it will require 2 guys, a crane and bucket truck. It will take approximately 10 hours to do this job, including:
1. Receive and inspect the signs
2. Load signs on a trailer and transport to the jobsite
3. Set up the trucks
4. Install the signs
5. Hook up the power
6. Clean up and return to the shop.
How do I know this? We installed these identical signs at the local store. Everything went perfectly and the customer was happy. We were paid $1295.00 + permit costs.
This job (that I lost) is for the same signs at a site that is an hour away. I added some travel time to my original estimate and when I followed up with the client he showed me a bid that he had received from a company down the street from us that was for $500 including permits (cost of $116).
I did my best to sell him on our quality, skilled installers, the fact that they would need to cut corners at this price, etc, which he fully understood, but at that price - all he could say was that he aggreed and that he knows that they won't make any money on this project and that he was going to be a complete ***hole to make damn sure that it was done right and on time and then pocket the extra $ 800+ that they left on the table.
Nobody wins in these situations!
If you didn't get into the sign business to make money, PLEASE GET OUT! Don't ruin it for the people that treat this like a career. Sell on the value of your signs - not the price of your material + the $10 / hour you need to live in your trailer park! Go get a job working for someone that knows what they are doing. PLEASE!
Thanks for your comments.
My main concern is the fact that it is not the customers driving the prices down - it's the ignorant sign company owners that don't know the true costs of doing business.
They aren't making any money. And to make things worse, they are preventing others from making money.
This particular company is a father and son team that has been scraping by for years. Their work is ok, so I doubt their signs will fall down.
Any ideas on how to put these guys out of business? Sometimes I wonder if I should offer one of them a job installing for us making much more money than they are right now, just to break them up. That may be impossible as they are father and son.
Should I be patient and just let them tie their own noose? If the economy was better I would just ignor them....they can only do one job at a time and they can only work for free for so long. The problem with this approach is that this will only work if there are enough other jobs to keep us busy - which is a challenge in this economy.
Any ideas or experiences dealing with this issue?
I don't necessarily condone this and am offering it only as a re-tell of a story I once heard..... It's goes like this. Company A was by the book and a quality producer of signs. Company B was mediocre and didn't follow the rules nearly as much as A. B underbid, hacked on by, and proved to be a thorn in the side of A. So much trouble, A perceived B to have become. So A knowing B liked to break the rules, had paid some PI to follow B around with a video camerra. Apparrently permits, saftey violations, traffic violations, etc. etc. pose a risk and getting caught in most cities doing all of the above brings fines and attention to B.
Again..... I don't condone the above. It's unsportsman like.
I would opt to apply effort improving your communication and presense within your market. It's a classier approach.
You are dead on, it has been going on forever, people use price as there only marketing strength. I bid a job recently where I held the price for the same amount I did the job 7 years ago (face changes) primarily because my overhead situation is lower. The biggest sign shop in town did the job for $1000.00 (I bid $1500). It is totally crazy, and, by doing so we get the buying public to demand lower prices constantly.
If we can stay busy and keep our prices where they need to be and then turn around and invest back into the company with better maketing, better tools, and better employees, etc. to make our company stronger - then hopefully they will continue to work hard to make less, making their company weaker.
The companies with the lowest prices aren't "selling" - they're "giving" and lowering the prices on signs should be the last option. Just think what an effective sign does for a business....
My theory is that if we are busy building and installing at our price and they are busy building and installing at their prices, then at the end of the day we will have made at least double the profits.
I love building signs - but I will not build them for free.
If we can stay busy and keep our prices where they need to be and then turn around and invest back into the company with better maketing, better tools, and better employees, etc. to make our company stronger - then hopefully they will continue to work hard to make less, making their company weaker.
The companies with the lowest prices aren't "selling" - they're "giving" and lowering the prices on signs should be the last option. Just think what an effective sign does for a business....
My theory is that if we are busy building and installing at our price and they are busy building and installing at their prices, then at the end of the day we will have made at least double the profits.
I love building signs - but I will not build them for free.
1111, you're describing a situation we all face frequently, and 'I feel ya". But, it sounds like your customer is a reasonable guy, he's just taking advantage of a situation, doing the best he can, and he knows what's going on. He'll probably be back to you sooner or later.
I tell new customers that if low price is all they're interested in, I have some phone numbers they can call, and that it would be a waste of time for me to figure a quote if price is the main criteria. This saves a lot of time bidding stuff that you ain't gonna get anyway.
The second thing is, if I can tell they're gonna go cheap, I refer them to these low rate folks. The way I see it, that does several things. First, it leaves me time to concentrate on doing my best work for customers who are willing to pay for it. Second, it keeps the low priced competitor so busy that he'll sooner or later run aground because he's worn out and has nothing to show for it.
Best of luck to you 11111111.
Thanks.....here's a quick update:
The contractor came into our shop today to order a site sign, so we ended up keeping him as a client.
I asked him how that other project went and he said:
1. They tried to cut corners: They tried to get out of doing the electrical hookup, but he made them do it.
2. He also made them make a return trip to clean up a mess they left at the jobsite. (The jobsite was an was an hour away).
So as it happened.... the they made two trips to the jobsite, installed two sets of channel letters, performed the permit aquisition and paid for two permits, did the electrical hookup, and did all this to split $384.00 - minus the estimating time, gas, hardware, tools, insurance, taxes, invoicing, trucks, licensing............and their dignity.
That same day, we billed out $1200.00 for the crew that would have done that job.
Thanks for the responses to this thread.
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Amen to that! Just remember that they might be cheap today,but gone by the end of the month. Quality is the name of the game and only the best will still be standing when the smoke clears. In a nut shell, after that sign falls down they will call you back to put it up the right way.