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Poor business strategy

Discussion in 'Business Management' started by threeputt, Mar 24, 2011.

  1. threeputt

    threeputt Very Active Member

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    One thing always bothers me when I continually see it here on the forum.

    I'm referring to a particular strategy on how to "walk" certain jobs (customers) out the door.

    Presumably these are either people that a shop doesn't wish to work with, or the work itself is not to the shop's liking.

    But this idea of "bid it so high that they won't use you" seems flawed to my mind.

    Here's why I don't employ this strategy:

    1) It's dishonest. (why not be truthful?)
    2) You may gain a ill-deserved city-wide reputation as being overly pricey.
    3) You may knock yourself out of the running for other types of
    work that you do want to get involved with. (because you're perceived as pricy)
    4) Things change...you may one day want that very kind of work, etc.

    There's probably more, but that's what comes to mind.
     
    Tags:
    • Agree Agree x 1
  2. bayshorecreations

    bayshorecreations Very Active Member

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    I agree, I will typically tell them that I either do not do that type of work or that I am extremely busy and I don't want to accept the job from them and not be able to deliver it when needed but please come back with other projects you have in the future and I will be happy to quote them for you.
     
  3. Craig Sjoquist

    Craig Sjoquist Major Contributor

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    PLUS 1 for Threeputt .... geez I was amazed also at plain arrogant attitude to be blunt .
    Painting signs almost 36 years and have done many types with knowhow to do alot more, but over charging cause I'm scared about no. charging more because it will take more yes.

    I've had to turn away a huge amount of work cause I can not afford to make a error yes. but thats all it is..no thank you I'm unable to, hopefully they come back for what I can do my best in.

    I also know do not **** off the gator as you cross the bridge , you may have to come back.
     
  4. Pat Whatley

    Pat Whatley Major Contributor

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    When it comes to "firing" customers we firmly believe in pricing them high. Some customers go far and above pains in the ***. They can't make decisions, they constantly change decisions, they make unrealistic demands and they complain when all of their demands are met. We price them high to cover that time, nothing more to it. It's nothing personal against them, it's just business. These are customers, not friends.

    Pricing jobs out the door is the same thing. Some jobs are pains in the ***, or annoying, or something you'd just rather not do. I'll do them but you're going to pay me a premium to do them. Again, it's nothing personal, it's just business.

    There's nothing dishonest about it. Every job is custom and priced based on the parameters of that job. Customer attitude, ease of production, and overall happiness fit into that.

    Your idea of knocking yourself out of the running for work that you do want to do is flawed. What you're saying is I should spend my time doing work I don't want to do in the hopes that one day they'll bring me work I want to do.

    Things do change. I buy new equipment or learn new techniques I may find that I can do the work I used to not want to do a lot easier, better, or more profitably than I could before. At that point I simply lower the prices I quote for those jobs.

    If I wanted to be miserable, put up with bullshit from customers, and spend all day doing work I didn't enjoy I'd shut down the shop and go get a job.
     
    • Pure Genius! Pure Genius! x 1
  5. HulkSmash

    HulkSmash Major Contributor

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    It's not dishonest. Some customers and jobs require more time than others.
    For example - channel letters. We can't do them in house. We outsource the fabrication of them. We do the vinyl and install of them ourselves. Is it a pain? Yes? Waiting 3 weeks for a permit from the city, making sure the electrical is right, making sure the land lord is OK on how you mount the sign. After you install the sign, you have to make sure it's inspected, and they don't tell you when they can meet until the day of, and you have to make sure you're there or it'll fail inspection.
    So yes. If i don't want to do a job, i price it high, and if i get it. i put the effort into it. If i don't - there's other jobs to replace it.

    A customer comes into my shop asking me to cut and weed vinyl that's .25 inches and is 10 feet long. Well yeah we do it, but hell - they're going to pay for it cause I would hate to have one of my staff to weed that.

    I would never turn down a job, if i wasn't busy. But I've never had that problem. and if it's one of those jobs we don't like to do, we tell customers. We're not the cheapest at the job they're requesting, but we do have high quality work.

    So yeah.
     
    Last edited: Mar 24, 2011
    • Agree Agree x 1
  6. signswi

    signswi Very Active Member

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    This is actually a well known strategy known as the Red Velvet Rope strategy, coined by business author Michael Port -- I suggest reading his "Book Yourself Solid". You build a good customer base by getting rid of the bad customers.

    Pricing up to the point of absurd just to drive someone away isn't the way I'd go about it (I'm more of a straight shooter) but up-pricing to deal with annoying customers that eat your time isn't unethical at all.
     
  7. HulkSmash

    HulkSmash Major Contributor

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    this
     
  8. MikePro

    MikePro Major Contributor

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    you're not really bumping the pricing of your product, you're actually charging them a fair amount for your service.
     
  9. threeputt

    threeputt Very Active Member

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    Boy, it's amazing how your words get twisted around.

    First the issue of dishonesty.

    What I was saying is this: If you don't want the work, just say so.

    Don't price it ten million dollars high. What's so hard about that? (you can refer them to someone who might be interested in the work or whatever).

    Colorado: Of course some jobs take longer. Some clients are a PITA. Of course you will want to factor that into the bid. You completely missed my point. We always upcharge for those factors.


    Pat: I'm not saying you should spend ANY time "doing work you don't want to do". How did you get that from my words? Huh?

    I'm saying you should simply tell a client, "At this time, we're not accepting that type of work" or whatever is your particular style of wording it. Nowhere did I say you should do jobs you don't want, to gain work at some other time.

    My objection, for those that missed it, is being dishonest by saying "hey, we'll do it, but it's ten million dollars", when you don't want the work, don't like the client, etc.

    With that approach anyone he tells about your pricing is getting a distorted idea of your shop's pricing and the shop's true nature. When in reality you'd welcome good paying, easy to work with jobs. You're chasing work away, without even getting a chance to bid it.

    That simply was my point. Sorry to have even raised it. Sheeesh!
     
  10. HulkSmash

    HulkSmash Major Contributor

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    Denver.
    You never tell a customer . "we don't do this" or.. "we're not accepting that type of work at this time"

    If it's any type of sign work or print work - you find someone you can source it to. You can't be known as the shop who can't do it. That's not good advice IMHO.


    Unless it's obvious reason for example - people call and ask if i make doors.. all the time.
     
  11. threeputt

    threeputt Very Active Member

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    washington state
    Tell that to KFC.

    Try going into there and ordering a hamburger. They're a fastfood restaurant, right? They shouldn't turn you away, or say we don't do hamburgers. Right?

    Some larger companies than yours and mine have decided they would do one thing, and do it right. Just because it's related, doesn't mean you have to do it.

    By the way, we do take in many types of work that we don't do. (we simply outsource it). (screenprinting, channel letters, etc.)
     
  12. HulkSmash

    HulkSmash Major Contributor

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    That's a terrible example...fast food that sells chicken. not burgers.
    Hence the name. KFC.

    Seriously?

    You're missing the whole point.. forget it.
     
  13. btropical.com

    btropical.com Active Member

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    We have an old saying for family / customers


    On the first day they kissed some ***
    on the 2nd day they showed their ***
    on the 3rd day they got the boot
     
  14. CES020

    CES020 Very Active Member

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    I don't believe you can make that a blanket statement by any means. We have people call us for engraving their watch. Engraving a watch can cost about $15-20 many times. So I'm supposed to get in my truck, drive all over town and meet with jewelers to establish a relationship so I can take that job for $15, take someone's $300 watch, drive it across town, drive back, wait for it to be done, drive back across town (jewelers don't deliver around here), then call the customer, fill out the paper work, take the $15, mail the payment to the jewelery store, and skim $3 off the deal for my troubles?

    No thanks. "Sorry, we don't do that" works just fine. Takes me about 15 seconds and it's done.

    We get all sorts of requests that we tell people "sorry, we don't do that" all the time. Who knew I was leaving so much money on the table!
     
  15. threeputt

    threeputt Very Active Member

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    washington state

    Thank you, someone who gets it.
     
  16. OldPaint

    OldPaint Major Contributor

    iam of that age, IF YOU DONT LIKE MY PRICE, I CAN ADD MORE TO IT!!!!!!! and the ones i do this to.........I NEVER WANT TO WORK FOR THEM........in this life)))))))
     
  17. TyrantDesigner

    TyrantDesigner Art! Hot and fresh.

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    You are not in the business of making friends. If a customer is an aggravation, if they tie up one or more people for far longer than is needed ... consistently, they are racist or rude or all around an *** ... unless you have something written for the price ... they should be charged more. It is not a bad thing, it is a way to discourage those that are time vampires from wasting your day away..

    I encounter this weekly, invariably it will be people wanting some of the most complex art or digitally printed art but they want it right away (we outsource), and think I just wave my wand around and poof ... finished art. Neither do they want to pay more to speed up the process or pay deposits to do work ... they want everything on their schedule, and want it right away. Do I price them to a point of overpriced ... possibly ... but if they don't want it, there are more people waiting for work to be done that it doesn't hurt the shop to not do the work. If they don't like the price, there is a shop up the road who consistantly tries to underbid us, we still get most of the jobs by having better customer service and better end product.

    As a whole once you consider labor, taxes, materials and overall the jobs you AREN'T doing because of this one pita job that took you forever to land ... the profits are not there unless you DO price accordingly. will I EVER feel bad about it ... no.
     
  18. Custom_Grafx

    Custom_Grafx Very Active Member

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    I have recently employed a revolutionary new method when it comes to PITA list VIPs.

    Don't answer the phone.
    Don't reply to emails.

    Soup nazi seemed to be pretty happy with his biz... his only mistake, was giving away that armoire full of his secret recipes.

    The moral of the story is. Fire customers however you see fit - but never email someone your icc or full res 'pure' artwork.

    NO SIGN FOR YOU!
     
  19. cdiesel

    cdiesel Very Active Member

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    It's one thing to say you don't engrave a watch. Sure, you have the equipment to do it, but it's not in your direct line of business. It's another to fire a client who you have already done work for, and they are asking for something that you've done in the past. The "I don't do that work" excuse doesn't work.

    While some of what threeputt said is valid, I'm worried that telling clients directly that you don't want to work with them because they're too much of a PITA will get you labeled as an Ahole.

    For instance, we have recently stopped offering while-you-wait truck lettering. We used to cater to truck drivers, and would letter 20+ trucks a week. Since the economy has slowed, the truck drivers stopped coming by and we've switched our business model considerably to stay alive. Part of this means taking on a larger backlog of jobs, larger jobs, etc. This doesn't jive too well with dropping everything you're doing to letter a truck. We've pissed off a couple of truck drivers by telling them that it'll be 10 days until we can take care of their truck. I'm thinking we need to start charging more and hire someone exclusively to deal with truckers...
     
  20. Mosh

    Mosh Major Contributor

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    I am honest with ALL of my customers...I tell some of them to go somewhere else. Simple, I don't beat around the bush. If I can't, or don't want to do the job I let them know. Some people tell me to just raise the priceon stuff I don't like doing, well most PITA costomers don't have any money so why waste the time.

    Moral of the story, unless you are starving, do the jobs you want and let the bottom feeders do the rest. AND if you are starving, you need to just go find some, ah I did it for $120... work you want to do. There is SO MUCH work out there, good work and PITA work, just decide what you want to do and do that kind of work.

    Sorry, but I turn down 1/3 of the jobs that come in my door, and I know there are more out there that "brokers" are going after. I had a guy come in and he had just bought a 4x8 banner from a broker...$400, we about started crying when iI told him I do them for $120. he called the scum-bag and was offered his next banner for $300
     
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