There was a post on another thread about the three tier pricing system & I figured I'd make a new thread so it gets the attention it deserves. I use it a lot & have only ever sold the lowest tier just once (used car lot, go figure).
I'd like to hear how other use it.
This is the estimate I gave the cheapskate, er car dealer... 1st tier: vinyl lettering (& maybe a quick vector art off to side). 2nd tier: Painted lettering with a logo behind the lettering, slightly different color than substrate (like a watermark) 3rd tier: hand lettered, nice logo beside it, background smalted.
I used the same general scheme (read vector art) for all three sketches. After I did the first sketch, it only took about 5 minutes to copy & modify it into the other 2. I usually re-do their name in a few different fonts off to side for them to decide which they like.
Any changes get written down on estimate (#2, change lettering to font circled, use forest green for pict not hunter green) & estimate is signed by client & accompanied by a deposit.
Ok Ron, where are you??
Posted by Rick Sacks (Member # 379) on :
Chris, did you ever read the article about that written by Mike Jackson years back, probably in Sign Craft?
Posted by Ron Percell (Member # 399) on :
Hi K,
The pricing guides offer a look at the numbers in tier bids.
You can offer a tier bid visually by designing the most creative sign that you can( outlines, fades, shadows, gold, raised, carved)design with materials know are available, and have fun with it, this will be design 1.
Now you may Duplicate, then remove the more complicated task, this will be design 2.
Now repeat this process so it might match inline with your pricing guide until you get to the 1 color price, you'll reflect this in your written bid.
I like to create my written bid the same way. First I'll type out all of the components I wish to include for my Letterhead quality sign, then I can duplicate(copy & paste)#1 line of info, then change and or remove any components to reflect the design levels.
Here is a sample of a bid we won, this was one of the customers that picked the high bid. He also upgraded to a relief carved & faxed center piece.
They've been a great Letterhead Quality Customer, and we've gone on to supply them with a complete Identity package, Original Camera Ready Artwork Shirts, business cards(paper an magnetic), Digital logos on entrances. So hang in there, the right customers will come. Keep making samples too.
Now for those customers who need an answer/price now, I use a series of pre-made designs that reflect the pricing guide tiers, just so we can slow them down, or to cut right to their budget. It's good for your customers to have a choice. When you go shopping, you wouldn't go to a store with only 1 tv, you'd want a few choice's, and you might also choose to upgrade to picture in picture.
A well structured bid will typically produce more mid level customers, and allow the one's that want something really nice like a Ferrari know the quality is available.
Posted by Terry Baird (Member # 3495) on :
I use the three tier system of bidding on everything but the most basic job. After talking with the client, I do a quick thumbnail sketch to make sure that we're on the same page and then use that thumbnail to design the Basic sketch. I don't worry about whether it's vinyl or enamel. My Basic sketch is simple lettering (no outline or shadow) with a nice, effective layout. The Second design has a few bells and whistles, an outline or shadow on the main copy and maybe a simple pictorial. The Last design is a full blown custom with everything but the kitchen sink thrown in. I don't remember the last time that someone picked the Basic design and although most clients go for the Second design, I'd say that 10-15% go for the Custom design. The best thing about this system isn't the occasional upgrade, it's the fact that instead of the client thinking about whether to go with my company or Joe Schmo Signs, they're thinking about whether to go with design A, B, or C. Jay Cooke clued me in on this system over 10 years ago (he also told me to double my prices) and my business hasn't been the same since. I really works great.
[ July 12, 2003, 08:04 AM: Message edited by: Terry Baird ]
Posted by Bob Rochon (Member # 30) on :
The only thing I have with this system is your doing 3 times the work.
I find if you find out what thier budget is before hand you can design a sign to fit in thier budget and design only once. Most people have a clue on what they want to spend before they go shopping.
Posted by Mike Pipes (Member # 1573) on :
The 3 tier system makes sense but I do agree with Bob..
You put lots of time and consideration into designing the high end option without knowing your customer's budget, you're gonna get bit when they choose the low level option or even try to "dumb it down" from there.
If the customer doesn't have the money, they don't have the money.. it's as simple as that, so find out what your constraints (budget) are beforehand THEN design to fit the budget, keeping the higher end option within the budget and the bottom end option high enough to cover the time you've already put into it.
Posted by Joe Rees (Member # 211) on :
Naturally, tiered pricing isnt going to be needed or warranted in all cases, but I think discussing and qualifying people's concept of price definitely IS - early and bluntly. I'm tempted to believe that if someone says $XXX is their top budget, they mean it, but I've seen jobs go for as much as double what they initially stated their tolerance was. I've also had people admit to me they were grateful I included some cost saving options in the presentation.
Posted by Tony B (Member # 935) on :
That's right, the 3 tier deal only works some of the time. Ya just have to know when. If they don't know what they want, and havn't told me a figure to go by, the 3 tier deal works. I've done it and it does work, I always expect them to pick the medium one, but a lot of times they pick the best.
I have been looking into taking credit cards through Quickbooks. That and the 3 tier deal could work well together. Here's why.
Let's say Joe Truck Owner Operator with the $104,000 show truck with the $15,000 in chrome and chicken lights, wants some lettering. I give the 3 tier price deal. My thought is that, if he has a credit card, he will most likely go for the most expensive one. He may not have the $300.00 bucks on him, but he really wants it, and you know how it is with plastic, it's easier to spend than cash. Besides, they use plastic all the time at the chrome shop buyin $800.00 do dads for the truck "cuz it looks nice".
Yep the 3 tier and takin credit cards could work well together.
Posted by Kissymatina (Member # 2028) on :
The way I work this isn't a waste of time. I talk to people before I start anything, asking them what ideas they have about what they'd like, price range, etc. If they say $1000, I'm not going to waste my time trying to sell them a $3000 sign. But, if when they say $1000, the 3 tiers may be $1000, $1200 and $1400, as an example. Usually they will somehow find the extra $ to go with the $1400 sign. I only spend about 10 minutes to come up with the 2 other tiers (both changing the design slightly and pricing them). The customers here like this. We have a lot of fast-food type sign shops around here & the customer is usually quiet impressed that "wow, you really spent so much time on this, (I didn't, but they think I did) the other shop just told us we could pick what color vinyl we wanted to use and it would be more if we wanted the background a different color than white"
Posted by Linda Silver Eagle (Member # 274) on :
Chris,
I like the way you think. And Ron, I must say, I never thought about the direction you go in your tier bids. Doing the best one first and then taking away to give them an idea for what they could get for less money is genius. The main complaint most of have is the client always wants more for less. This puts it all in a realistic view for them,
Operating on the premise, that they always want what they can't have, this is not sure-fire, but a better way to present it in my book. Thank you Ron!
Posted by Jeff Ogden (Member # 3184) on :
I use a two tiered system...one is basically what they want, and the other is kinda what I want to do. Sometimes the customer will see both, and say "How about doing such and such to number one", and then we create a number three(middle)sketch, at which point the sale is usually a done deal. I never worry about wasting my time doing an involved layout. To me, its's not a waste of time. If the customer chooses a simpler version, I always keep the best one and often reuse it later on something else. Ideas usually progress with experience, and if I "see" something that I want to try, I'm going to try it somewhere, no matter who the customer is. So long as it fits and is appropriate for the location and type of business it's for.
I guess I like my system, because with a low and high end, the customer usually gets to participate in creating a middle version. Another thing I do is print no.1 in black and white, and no.2 in color. It helps the customer see the advantages of changing the first sketch. Kinda steers things along im a certain direction.
I would't do a sketch for everybody, either. Most of the ones I have done are usually for main identity signs, and often are new customers who have either seen a sign I did, or have been referred by others.
