Why not tell them, "Next time you have something to frame let me do a quote for you... I think you'll be pleasantly surprised!" I've found that my "regular" pricing is about on par with M's "50% off" pricing.And yes out of the 15 people ive met at the BNI group I am joining. 3 of them went to M's... one feels she got a VERY good deal... needless to say.. i almost told her she didn't... but held off. why make her mad.
the other 2 i did because they were a bit nicer and didn't mind me telling them... but that one lady was not the kind of person to talk to about it. esp with her response of how much she loved m's. cause im about right with you on the pricing after their 50% off.Why not tell them, "Next time you have something to frame let me do a quote for you... I think you'll be pleasantly surprised!" I've found that my "regular" pricing is about on par with M's "50% off" pricing.
Isn't the object of BMI to refer business to EACH OTHER? If so, then she clearly doesn't expect to send you business. I do not match competitors as their overhead and mine may be substantially different AND that customer is gonna tell everyone that I match. Soon enough, I will have to match every coupon, estimate and heresay from everyone in town.the other 2 i did because they were a bit nicer and didn't mind me telling them... but that one lady was not the kind of person to talk to about it. esp with her response of how much she loved m's. cause im about right with you on the pricing after their 50% off.
Well, if they are - and I'm directly across the street from M - they aren't doing it to draw the "shopping around" customers from me as my normal price is usually less than theirs.When M's offers 55% off (THIS WEEK ONLY!!!), aren't they lowering their prices to match their competitors?
SHEESH, I'm a little slow today!Good point, Paul...
I'll have to remember that approach when discussing their sales tactics.
They are lowering their prices to compete with me!
i like it!!!!When M's offers 55% off (THIS WEEK ONLY!!!), aren't they lowering their prices to match their competitors?
Well Paul, you apparently feel it is necessary to degrade your workmanship by discounting your prices. If that's the case, why don't you just reduce your prices across the board and become the "cheap frame shop?" Advertise it as such! Go as low as you can! Take every customer coming in the door that wants that "cheap black frame."Warren's post should be required reading for anyone going into business. Any business.
We can't ignore the economy and we can't allow ourselves to believe that customers will be so much happier with our framing, than with Michaels'.
If you're a better framer than Michaels, good for you. But if you let the customer buy from Michaels, your skills will remain a secret.
For too long, framers taken the approach that Michaels is "bottom fishing." They're not; they're fishing at the front door. Once you let a customer go to a Michaels, or any competitor, the chance you will ever see them again are near zero.
And if you want to sell Bentley's, you'd better have a store that looks the part, and in a location that has Bentley buyers. Just having Bentley prices doesn't mean you're Bentley.
MY GOSH !!!! Don't you get it??? THAT'S THE POINT !! It didn't (doesn't) matter what the competitors are charging!Dave you leave out one critical bit of information. What were your competitors charging?
You seem a bit tense about the discussion. I don't understand why. I have to read alot into your situation but you seem to be suggesting that you have packaged your shop differently than those around you. Is that fair? The experience is different and that resonates with your community. They also must expect this better experience to cost more. Perhaps you have found the path of least resistance and your cohorts didn't? That's great. To say that pricing doesn't matter requires one to ignore a mountain of evidence to the contrary.MY GOSH !!!! Don't you get it??? THAT'S THE POINT !! It didn't (doesn't) matter what the competitors are charging!
Unfortunately you still don't get it. You apparently think that your retail price should mirror your competition. Good luck with that. OH, and you should take an Economics 101 course. It might help!To Dave's suggestion of raising prices 50% it absolutely matters where a shop is on the price hierarchy before the increase. If not just raise your prices 50%. Then do it again Thursday. If price simply doesn't matter why not?
sounds like the old minimum wage battle. why not make it 20 bucks an hour if you "really" want to help someone. price increases have to end somewhere....The question still stands. Why not raise your prices again and again if it doesn't matter.
I do not think it's any more possible for a frame shop to mirror prices of all others than it is for restaurants. But I do think that shops could be divided up into 2 or 3 catagories and customers will expect the prices in those catagories to be somewhat consistant.
Yes as long as precieved value is still there. People don't just decide to eat a $70 steak unless it represents substantially more value than the $10 steak. There is no way for a steak to taste 7 times better. The whole package can make the experiance worth the price. So even then price is not completely flexable with no limitations other than the owners whims.I still say that price is further down the hierarchy of reasons that customers choose a framer than many other factors.
Ah.... you forget about the death grip. Everyone has issues. The grass might be greener but it's got carp in it too. I think what each of us has to realize is that there are varying levels of customer and businesses are smart to understand how each of them react and respond to varying factors. To do this, you have to understand their needs. I propose that there are essentially 6 different types of customers. I'm sure that we can come up with many more, but this is our list.just over all things are down across the board in the country... except APPLE... there may not be a way to get more people in the door right now unless i sell I phones.
Disagree. Waffle house steak (and eggs) versus Daileys (Atlanta anyone?) and I believe that there could be a percieved difference that one might quantify with a multiplier.There is no way for a steak to taste 7 times better.
Quite a leaping ability you have there.:kaffeetrinker_2:
Well Paul, you apparently feel it is necessary to degrade your workmanship by discounting your prices. If that's the case, why don't you just reduce your prices across the board and become the "cheap frame shop?" Advertise it as such! Go as low as you can! Take every customer coming in the door that wants that "cheap black frame."
Soon enough you will be out of business because you're predicating your price structure on another shops' costs. I had a limousine company many years ago. Everytime someone opened in the county, they'd outprice me by $2 - $3 per head for airport van runs. I would always hold my price. No discounts. Ten years, and 4 competitors later, I sold my business for quite a nice sum. OH, did I mention that I purchased the assets of the other 4 at the inevitable fire sale?
You must have a lot of "shopper" walk-in traffic. I don't. And, because I keep a sharp eye on how many customers walk - knowing I can't do every single frame job in town (nor do I want to) - I charge Cadillac prices. Not Bentley, mind you, but more to the top end than the bottom. Guess who's still in business after 8 years while 17 collegues are now closed?
:kaffeetrinker_2:
A little thin skinned, there, eh Paul? I have never misquoted anyone here. And, just for the record, my conclusions are based on my perceptions. So, if you believe I'm twisting your words, maybe you should be more clear of your intent.Quite a leaping ability you have there.
You have a habit of misquoting/mistinterpreting posts you don't agree with. You're welcome to disagree with me, and to argue your position, but please do it without twisting my words, or reaching outrageous conclusions.
I'm glad what you are doing is working for you. I also think it's great that you are tracking how many people walk without buying. That's good and no one can close every deal.
But what about the people who never came in? What do you know about them; what are you doing to attract them?
You know, in the very first framing class I took, that was essentially the first advice that they gave. They said everyone is charging too little and should go home and double their prices. Of course they knew that most would not, but it gave people something to think about when the discussion went further into the values that frame shops wish to have and to communicate to customers, and what customers are actually looking for.I decided right then and there that I was going to raise prices by 50% because if people thought we were expensive then we, by golly, I was going to be expensive!
If this didn't work then I would seriously considered closing down the framing operation. Overnight I raised prices by 50%. A $ 200.00 frame job now ran $ 300.00.
It was much easier to change my prices than to change my customers perceptions of our price."
Where did I say that? Children can argue with more logic than that. Stick to the facts.:kaffeetrinker_2:
Well Paul, you apparently feel it is necessary to degrade your workmanship by discounting your prices. If that's the case, why don't you just reduce your prices across the board and become the "cheap frame shop?" Advertise it as such! Go as low as you can! Take every customer coming in the door that wants that "cheap black frame."
...
:kaffeetrinker_2:
It is interesting that after 34 posts in this thread about pricing, these words have not yet been mentioned:
PERCEIVED VALUE
I guess that depends on where you're looking. I did misspell it though. I should have remembered "I before E except after C". DANG!Yes as long as precieved value is still there.
Queen - I can absolutely agree with your statement of competing against your cost basis. I think that should be clear to everyone, unless someone chooses a particular moulding or package that works for them as a "loss leader", which I don't believe makes sense. However, what if we look at this in a more realistic way. You know your costs, so apply them in this scenario -My original point stands. You can't possibly be successful in a competitive environment by simply matching someone's retail price. If your costs are more than your competition and you match a retail price that is below your cost basis, you are losing money on each job. Is that sound financial practice?
I know what my cost basis is and how much I need to make a tidy profit and a reasonable living. If my business can't support that formula, then I need to close and find work elsewhere.
Rob, that was my EXACT point. If you don't know your cost basis, you can't possibly "match" someone's retail price and show a profit. If you simply "match" price - and it's a loser - there's no way any amount of "volume" makes up for it.FQ -
I think you may be overlooking something -
And, I am in no means suggesting that a successful operating strategy is to offer things below cost -
AND, here we have someone who understands cost basis. So, JWB is satisfied with his markup as it seems to bring the income necessary for his level of living. No discounts and allowing the "wal-mart" crowd to walk.My costs are lower than theirs are.
Wouldn't it be better if we asked what a persons' intent was prior to telling them!A little thin skinned, there, eh Paul? I have never misquoted anyone here. And, just for the record, my conclusions are based on my perceptions. So, if you believe I'm twisting your words, maybe you should be more clear of your intent...
I would say even 10x better!Yes as long as precieved value is still there. People don't just decide to eat a $70 steak unless it represents substantially more value than the $10 steak. There is no way for a steak to taste 7 times better.
I agree other than the 10x better.... I ate at a Morton's just to try it out because ive always wanted to.. and because they actually had a special deal... not sure if its every day, but of course they don't advertise it.. basically 50 a person and you get to choose from a smaller menu, but get appetizer, dinner, dessert.I would say even 10x better!
Morton's, Palm, Peter Luger and other legendary steak houses don't lower their prices to match the competition (even same level competition). They believe and act like they're better.
And so does the customer.
Costs can be an indicator of other problems but doesn't drive retail price much.If you don't know your cost basis, you can't possibly "match" someone's retail price and show a profit. If you simply "match" price - and it's a loser - there's no way any amount of "volume" makes up for it.
Interesting. As we all should be aware (and considerate of), many different and valid viewpoints. So let me ask either you or Queen (or anyone else who wouldn't match) this. Have you ever competed with another frame shop on a commercial order? Ever lowered your price due to quantity, frequency, etc to secure that job? I realize that these situations are different than one person walking in your door, but in my 18 years of being in this business, I've found that in reality the long term benefits of that one consumer continuing to do business with me far outweighs the one time shot of an office project or hotel job in terms of net revenue. Disagree? Also, I think the section in bold is an awfully dangerous assumption that I wouldn't qualify my staff to make. You know what they say when one assumes. And for the record, I'm not trying to incite, rather I am trying to understand the perspective because it's so different from mine and those that I compete against here. So if I've offended anyone here, I apologize.Paul... I wouldn't match that price. I would probably bend a bit justifying that there are two identical pieces but I wouldn't match the price.
Matching the price reduces custom framing to a mere commodity and in my book it isn't. If anyone thinks it is then they should run their business that way and be a low price framing operation and probably be very successful with it too. I don't operate that way but do not belittle those that do. Just two ways to run a business...both valid.
Matching the price also encourages the customer to want a deal every time they come in the door. If a person is shopping on price alone they are not my customer and never will be my customer long term.
Why is that customer standing at my counter? They are looking for an even better price??? I'll offer a better design and probably better craftsmanship (at least I like to hope so), but not a better price simply because someone else is cheaper.
Someone else will always be cheaper. It is the nature of business but more go out of business for being to cheap than for being too expensive.
Jim P, wouldn't you agree there can be a big difference between what you are known as & what you tell customers? (I am not trying to be funny here)Instead of being known as the "cheap frame shop" or the "expensive frame shop", I like to tell customers that I have a variety of offerings at different price points....
PREceived value - percieving beforehand!Yes as long as precieved value is still there. ...
Quite frankly, I would wager that on a per store basis, someplace like Fridays or Applebees would outsell even a longhorn steak house nationally and that even someplace like a Golden Corral or Ponderosa would move more than both. My wife ran marketing a chain of Fridays stores in StL years ago and my best friend was the GM for the Outback chain (bigger than L-horn in StL) here and per store Fridays in STL beat them on this exact topic. Also on AB products sold. It was quite enlightening and surprising.I wonder who sales more steaks Ruth's Chris or Longhorn? I wonder which has more appeal to the general public? Which is the path of least resistance?
I have not had time to read this whole thread but Warren's and Paul C's comments that I have read so far are a breath of fresh air. They have said it before, and they are right. You can fool yourself by thinking that customers don't shop price, but they do. And the quality at the bbs is not all that bad. Not always great inside the frame, but the public is sadly not aware of this and often doesn't seem to care.Warren's post should be required reading for anyone going into business. Any business.
We can't ignore the economy and we can't allow ourselves to believe that customers will be so much happier with our framing, than with Michaels'.
If you're a better framer than Michaels, good for you. But if you let the customer buy from Michaels, your skills will remain a secret.
For too long, framers have taken the approach that Michaels is "bottom fishing." They're not; they're fishing at the front door. Once you let a customer go to a Michaels, or any competitor, the chance you will ever see them again are near zero.
And if you want to sell Bentley's, you'd better have a store that looks the part, and in a location that has Bentley buyers. Just having Bentley prices doesn't mean you're Bentley.