Local Competition

[RedClayGraphics]

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?

 

[RedClayGraphics]

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.

 

[RedClayGraphics]

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.

So simple, yet so effective! Much appreciation!

 

[GAC05]

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.

 

[ams]

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?

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.

 

[visual800]

Sit back and wait......trust me it may take a while but karma catches up

 

[Christian @ 2CT Media]

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?

 

[RedClayGraphics]

You can sue him for slander, but these shops will usually fail on their own.

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

 

[Texas_Signmaker]

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.

 

[RedClayGraphics]

They will eventually weed themselves out, take the high road - value by differentiation

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?

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. 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!

 

[Gino]

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.​

 

[unclebun]

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.

 

[RedClayGraphics]

there are around 125 shops in my town alone

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.

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

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!

 

[Texas_Signmaker]

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

 

[binki]

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.

 

[Bobby H]

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

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.

 

[Gino]

Regardless if they are large or small, do it all or broker most everything, they ALL say they are sign shops and the customer does not care about licenses, permits, how many printers, welders, electricians, buckets or cranes you have...... they just wanna know how much and when. Now, this is your typical customer walking in off the street or calling/texting you. Regular customers, naturally care about many of the incidentals that make the machine work. So, if you have a customer calling and asks questions, as long as you answer the questions correctly, get the job....... you are competition in my book. Like I said earlier, a good 1/4 of them don't even speak English, but why should they. Our town is now around 80% hispanic.

We have one guy who advertises doing neon, welding, full wraps, monument signs and just about anything you can think of. He barely speaks English, as he's from the middle east somewhere, but he'll do a full set of truck doors for $45 for the pair. That's not magnetics. His shop is completely illegal, but no one does anything to him. There are others like him around here.. He doesn't pull permits, he doesn't do anything UL stamped. He's just a disaster, but yet, he flourishes.

Yeah well, it is what it is.

 

[Bobby H]

Yeah, it's all fun and games for guys like that until someone at City Hall gets a bug in their @$$ about it and makes his operation an issue. Or someone from OSHA, DOT, EPA, etc shows up at his business wanting to inspect stuff and go over his books to see how he has been complying with regulations. Our city government makes us jump through hoops to get permits (and we have to do the same thing in other cities). The government safety agencies pay our shop visits on a regular basis too. The fly by night types who don't live by the rules are operating on borrowed time. We've had a couple outfits here get shut down over the years. Obviously they thought only suckers deal with gub'ment red tape and rules. They eventually found out they were wrong.

 

[2B]

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.

we typically try to bid the know "price" jobs 2 ways

• BUDGET
• SUGGESTED

competing on price is a losing battle, and if someone says Vista Print / Buildasign, we stop them and say we will NOT be cheaper.
usually, we still win when we show what the quality difference is and the fact we do custom designs instead of cookie-cutter templates.

the biggest hassle is explaining / ensuring the person is comparing APPLE to APPLE
I like to use McDonald as an example, they have a $1 "cheeseburger" and they have an $8 "cheeseburger"
they are both "called" a "cheeseburger" but they are NOT the same

 

[Gino]

I don't go to places like McDonalds, so I didn't know they had a dollar or eight dollar cheeseburger, but that's a really neat comparison.