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Local Competition

Discussion in 'Sales, Marketing, Pricing Etc.' started by RedClayGraphics, Jan 16, 2020.

  1. RedClayGraphics

    RedClayGraphics Owner, Lead Designer

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    Mar 12, 2019
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    I am one of 4 sign shops in my relatively rural area. We all have our niche, one guy is an old school painter, one shop does jam up wraps, while I am known for my creative abilities with outside-the-box concepts and larger projects. I do my best to collab with the others, sending referrals here and there, etc. and can "get along" with most of the other local sign shop owners.

    But there is one competitor in particular that is most like us in that they offer UV flat metal signage, banners, yard signs, the basics. And Y'ALL they are absolutely ruining our local market and trying their best to ruin my reputation. Winning bids by not charging for labor (and running their mouths that we're over priced because we do charge for it), they have inconsistent pricing on everything else based on what they think they can squeeze the customer for, cold call my customers just to let them know "they could've done that for cheaper" after I post finished jobs on the web, and just all around slimey, bad business practices.

    Thank God my customers are loyal and prefer dealing with me! But I'm concerned local customers that are more driven by bottomline pricing don't have the industry know-how to realize that he's not bidding apples to apples, and that the reason his prices are low are because his products and practices are substandard. (He doesn't laminate, he buys whatever vinyl is cheapest, runs a bucket truck that ought to be put out to pasture). For instance I was approached to quote large Gemini formed plastic letters for a potential client, which I did. My competitor then comes in with a bid for jigsaw cut ACM and wins the bid. Well, shoot, I could've done that for cheaper, too, but it wasn't what was requested.

    I know business is business, and I'm not whining about that. My way of dealing is to rise above it and keep trucking with my own company and doing what I can to improve my own. Competition is a good motivator. I'm just wondering how other shop managers handle toxic competitors like this?
     
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  2. JBurton

    JBurton Signtologist

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    My old man always tells me to wait it out. They'll get what's coming to them.
    I find that offering warranty against fading will almost always win a comparative bid scenario. Even on electrical work, we warranty the power supplies and such for 5 years. Sure, we do get labor, but that component that we are replacing is free. People like to know they will get something free if something goes south. Otherwise I stress to my customers that I am using top of the line products, using superior practices, and I've been doing it this much longer than my competition for a reason! (we just hit 100 years here!)
    Keep an eye on anything he's printed that is failing. Go into those businesses and offer them a price to fix this, while mentioning that if you'd done it, you'd be out here on your own dime fixing it.(This is not a chance to bad mouth the competition, but it's as close as a morale businessman should come.) Usually they send you off and call the other guy to fix it, which if he's cheap he won't do, then they will call you back eventually.
    The worst is the competition talking smack about doing something cheaper. My typical answer is "Yes, that could be done cheaper, but it will last. If you'd like, I'll quote you a sharpie special next time."
    I suppose the best strategy is to find some very satisfied customers, offer them 5% off their next purchase if they would kindly leave a review on google or yelp, and hope that you turn up in the search results that much more favorably.
     
    • Like Like x 3
  3. RedClayGraphics

    RedClayGraphics Owner, Lead Designer

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    Mar 12, 2019
    Smalltown, GA
    Great advice! We do warranty larger projects but might make this more of a thing in my advertising.

    Forgot to mention one headache is that people almost always come to me first to quote. So when they go to my competitor for a second bid and he inevitably undercuts me, that customer doesn’t always give me another chance to answer his bid and I lose the job.
     
    Last edited: Jan 17, 2020
  4. JBurton

    JBurton Signtologist

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    I know the pain. I make mention to the customer if I know it's bid out locally, just let me know if you feel my prices are high. I will take a second look and see what I can do, or at least I will explain what you are not getting from a competitive bid that mine is providing.
     
    • Like Like x 2
    • Agree Agree x 2
  5. RedClayGraphics

    RedClayGraphics Owner, Lead Designer

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    Mar 12, 2019
    Smalltown, GA
    So simple, yet so effective! Much appreciation!
     
    • Like Like x 1
  6. JBurton

    JBurton Signtologist

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    For sure! Keep your head up and morales out of the gutter and keep at it.
     
  7. GAC05

    GAC05 Major Contributor

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    Keep them busy by sending them all your time-wasting, tire-kicking bottom - feeder customers you really don't want but need a way to be rid of them.
     
    • Agree Agree x 3
  8. ams

    ams Very Active Member

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    There is a shop in our area like that. His quality is so bad, he hurts himself. He only covers within about 20 miles of his shop. I cover the entire state and have more business than I can handle. The more you distance yourself from him, the quicker he will fail. Just educate your customers about the quality and you get what you pay for. You can sue him for slander, but these shops will usually fail on their own.
     
    • Agree Agree x 2
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  9. visual800

    visual800 Very Active Member

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    Sit back and wait......trust me it may take a while but karma catches up
     
    • Like Like x 2
  10. Christian @ 2CT Media

    Christian @ 2CT Media Major Contributor

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    It's not karma, it's bad business. They will eventually weed themselves out, especially in a small town environment. Let them continue on, take the high road and build your value by differentiation and promoting your worth not bad mouthing them.

    It sounds like you have a solid business, can you find an offering you have that the others don't do or don't do well?
     
    • Like Like x 1
  11. RedClayGraphics

    RedClayGraphics Owner, Lead Designer

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    Mar 12, 2019
    Smalltown, GA
    I contemplated a strongly worded letter from my lawyer, but to sue I would have to call clients in to "testify" and I don't want this affecting my relationships with them and seem petty. Even the letter could possibly backfire. eek
     
  12. Texas_Signmaker

    Texas_Signmaker Very Active Signmaker

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    Not everyone is price sensitive or will shop around. I can usually tell if someone is price shopping on the phone and most of the time I won't win that business. The customers I have are 100% pleased with the experience even if they paid a little more. Those price sensitive shoppers are bottom of the barrel and are more nit-picky and take up more time because THEIR time isn't valuable.
     
    • Like Like x 1
  13. RedClayGraphics

    RedClayGraphics Owner, Lead Designer

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    Mar 12, 2019
    Smalltown, GA
    If someone comes in saying they had a bad experience with this guy, I just avoid the opportunity to badmouth and say I'm so glad they came in to let us help find a better solution. (Did I mention this is The South, too, so that statement's coated in a southern drawl.) But of course around the watercooler, there's a lot more discussion between employees.

    I pride our shop on our creativity/graphic ability and craftsmanship. I went through a fine arts BFA program and we were constantly critiqued. I click around in Adobe lightening fast thanks to lots and lots of practice, I'm a good graphics robot. :D Hoping to give my customers a better overall experience when trying to build their brand. So we get deeper into these businesses and relationships with their owners because we become pretty integral with some of them from the ground up. I design their logo, I sell brand packages, then I turn it all into signage and business cards, design brochures and facebook posts, etc. so it's just different than the other shops around here. I'll keep working on it, thanks for the advice!
     
  14. Gino

    Gino Premium Subscriber

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    If there are truly only 4 shops in your entire area, you oughta feel good about it. When I started in this business, 1972, there were 8 shops in our whole county. Now, there are around 125 shops in my town alone. 1/3 of them aren't even registered or licensed, so they fly under the radar, but they are still competition. As others have said, your PITA competitor will probably just fry his little brain and business outta existence. Nothing to really worry about. However, over the years, like I said things grew and for every shop which fizzled out, there were 1 or 2 more to take it's place. Make yourself known, join various organizations, network and create a really broad customer base. It's a natural thing for people to veer towards someone who boasts being cheaper, when they don't know the difference and are sold a bill of goods. You keep to the high ground and anyone leaving.... will come back and help you succeed even faster. Don't lower your standards to attract losers or compete with losers. Those people.... you don't need.

    Good luck.​
     
  15. unclebun

    unclebun Very Active Member

    The annoying thing about our small town is that although competitors like that ARE weeding themselves out, it takes usually 4-5 years to happen, and before they are gone, another pops up just like them.
     
    • Agree Agree x 2
  16. RedClayGraphics

    RedClayGraphics Owner, Lead Designer

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    Mar 12, 2019
    Smalltown, GA
    Holy shnikes, that's a lotta shops! Not to mention online competition! I hear of a few people locally that do work here and there, but very small Cricut type stuff. They help me out when I get smaller requests like YETI decals. But sometimes I get circumvented with my contractors. Like I recently went to my CNC guy to quote a HDU job, but the customer ended up buying it directly from him which cut me out. Then that same customer is bringing his HDU boards to me to finish, assemble, paint and install. I guess he saved a few dollars there. ¯\_(ツ)_/¯ He's a great repeat customer, I still did the initial design and will finish the real "sign" work, so I don't mind. Just could be a potential loss if it were to happen a lot. Otherwise, most of my customers value being able to have me take care of everything on one ticket.

    This particular sign shop has gone bankrupt twice and comes back with a new name each time slightly different than the one before. Funny, when I first bought my shop and equipment he offered to sell his business to me for $1M. There's no way he has that many contracts around here!
     
    Last edited: Jan 17, 2020
  17. Texas_Signmaker

    Texas_Signmaker Very Active Signmaker

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    125 sounds like a lot of shops. Hell I'd be surprised if there were over 100 in the city of Dallas alone.
     
  18. JBurton

    JBurton Signtologist

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    In my town of 58k, I can think of 2 actual fab shops with print capabilities, 5 print shops (4 are literally one guy with a printer), 2 copy shops (4 if you count the big box stores), and at least 3 guys with bucket trucks that will hang stuff only. So that's 10 places to buy printed stickers at the least. So one shop per 6k people. How many folks live in that rinky-dink town? Just sayin...

    I'd be inclined to google 'old company name' and 'new company name' several times a day... See if you can sway google suggestions into helping your customers put 2 and 2 together.
     
  19. binki

    binki Premium Subscriber

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    When we first started out we had 8 competitors within a half mile. We opened are B/M store in 2008 right as everything real estate was going down the tubes. Not only did we have far lower rent because of this we had some competitors coming to us hoping we would source work to them. In the end there were only 3 of us left after a couple of years. One of them that is still around really doesn't like us and we hear from our customers some badmouthing is going but I just ignore it and do my own thing.
     
  20. Bobby H

    Bobby H Very Active Member

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    I guess it comes down to one's definition of what qualifies as a real sign company. My opinion is a real sign company is one that has an actual building/store front and is able to build, install and service permanent electrical signs of various types. Further, a real sign company will have employees who are on the books, covered by workers comp insurance, etc. In my town of roughly 93,000 people our company is the only one meets that standard.

    We have a couple or so competitors who job out much of their production (they don't make any sign cabinets, channel letters, etc in house), but they do some install and service work. At least one guy in the area pulls a little bucket lift behind a pickup truck trying to do some sign service calls. And then there's the hobbyist types working out of their home garages with little vinyl cutters or something. They'll jump into the game thinking they're going to get rich in the sign business but then beat themselves to death trying to undercut everyone on small projects. They get bled out by time and materials costs. Pretty soon they're gone trying to get rich quick doing something else. For every one of those guys that moves on there's someone else to take his place.

    The fly by night types are always going to be around. The way to survive them is by being as professional as possible and taking good care of repeat customers.
     
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