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Should you cut prices to match a competitor?

Discussion in 'Picture Framing Business Issues' started by BILL WARD, Jul 19, 2010.

  1. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Anyone who can spend even an hour per day, reading and posting here, should NEVER allow a prospective customer to get away even if you have to match a price. Right now you are making zip, zilch, nada. You have too much free time and not enough customers. Otherwise, you wouldn't be here.

    While Paul Walters gave a detailed analysis that considered many variables, I'll simplify it by stating that if your butt is on the Grumble, you're only cost to make that sale is materials. Your other expenses remain as they were. IT IS NOT A LOSS LEADER, YOU ARE NOT LOSING MONEY. It is additional profit that will go in your checkbook. You're working for a slightly lower hourly wage than you would like, but it's still paying better than being here.
     
  2. Jay H

    Jay H PFG, Picture Framing God

    PaulW, I agree completely. I said earlier that we may be able to break shops into 3 catagories. I think our product is much to narrow already to have 3 but certainly two. Where restaurants could probably be broken up into 4 or 5 classes as far as the public is concerned. So we do need to capture both high-middle or middle-low in each shop. I do think it difficult, if not impossible, for one to capture high - low in one shop. The public just will not see the value. That is why we have so many different options when it comes to buying a piece of cooked beef.
     
  3. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    PERCEIVED VALUE

    I apologize, Jay. I searched the thread for "perceived value", and nothing came up.

    Anyway, the point stands, doesn't it? Perceived value -- if it is there -- can take precedence over low price.
     
  4. Rob Markoff

    Rob Markoff PFG, Picture Framing God

    And here is where YOU miss my point. I do not think you can make a blanket statement like that. My example is just one of the ways that an "occassional" reduction of price can yield benefits that transcend the "loss". To lose money on a regular basis is foolish, but to "match" price in anticipation of larger future rewards may make sense.

    Same for an overall pricing strategy - a slight increase in volume triggered by more aggressive pricing may move a smaller shop to a more aggressive cost basis of supplies.
     
  5. Dave

    Dave SPFG, Supreme Picture Framing God

    I am not against discounting or lowering my price, but it must be justified. Quantity and frequency of ordering are valid criteria that would put my pencil in the sharpener.
     
  6. pwalters

    pwalters SGF, Supreme Grumble Framer

    Got it. So do you disagree with my opinion that many commercial orders are "one and done" type situ's and that earning a good customer often can make a much more beneficial contribution to ones bottom line?
     
  7. pwalters

    pwalters SGF, Supreme Grumble Framer

    It's interesting how everyones perspectives work.

    One other thought for discussion here might be customer acquisition cost. We do quite a bit of marketing. If I mail 5000 postcards at a cost of $1700 and get 10 people in the door, then I have paid $340 per customer. Now, I would hope that they spend more than the $340 in that visit, but ideally over time I would expect that as their customer life cycle goes that they would indeed spend more. Now, if I have to come down (in my scenario) $70 on that customers order and they aren't here as a result of any type of marketing, I'm technically way ahead. Right? Any thought to that?
     
  8. Dave

    Dave SPFG, Supreme Picture Framing God

    I don't think I've ever won a commercial order or bid situation based solely on price. There are many (legal) ways to win commercial bids without being the lowest price bidder. Some of the same criteria that potential retail customers use to evaluate who will do their framing are used by commercial clients too.

    I once spoke to a purchasing agent for a large company that put out bids quite often when they were procuring supplies and services. Whenever unknown vendors were involved he generally threw out the lowest and highest bids (they required up to five on large orders). The reasoning was that the highest bidder was overcharging and that the lowest bidder either wouldn't be in business long enough to perform or might be a one-hit-wonder and not be a valued vendor that he could develop a long term relationship with. Strange reasoning but understandable and true.
     
  9. Dave

    Dave SPFG, Supreme Picture Framing God

    Will you lower your price the next time this customer comes in too?
    If you don't, do you honestly believe they will be full price
    customers from now on, change their spots, and not shop around anymore.
     
  10. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    PW, looking at it via acquisition cost definately validates it. Also, as you pointed out, we need to look at the value of the customer over a lifetime.

    Dave, Yes I would discount for them every time, until (or when) I am so busy that I can stand my ground. We all have customers like that. Swear them to secrecy. :) However, I do prefer to give discounts in the form of added services - if I give away an extra mat, the customer got 20 bucks; cost me $3. It's a win-win for everyone.
     
  11. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    How interesting it is that you know my exact situation without ever meeting me, knowing anything about my store or my employees. But, I guess that nonsense you spouted before about sticking with the facts only applies if you want it to apply, eh?

    :thumbsup:
     
  12. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    zzzzzzzzzzzzzzzzzzzz
     
  13. pwalters

    pwalters SGF, Supreme Grumble Framer

    I absolutely believe you, as I know that's a staple of government bids locally as well. However, regarding my question about the lifetime spending cycle of a customer (even one who you may have originally gotten as a result of "competing" on price) over the revenue generated by a "one and done" type commercial account that most all of us would adjust pricing on (whether it was to match/beat a competitor or not), would you agree?
     
  14. pwalters

    pwalters SGF, Supreme Grumble Framer

    I think that you assuming that I would have to and me assuming that I won't have equal 50/50 odds on being right. I think once I get them in, show them the difference in my service, quality, offering, delivery time, service after the sale, etc. that I have an excellent chance of them being a customer who does not only go by price. So to me, I think it is worth the risk. What I do know is that if I were to shoot that sale down (now remember, I'm not losing money on the job, just acceptably lowering margin) I likely won't get another chance. Because even if they are a price shopper, once they think that you are overpriced, that's all she wrote.
     
  15. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    20% of my business is commercial. Of course, large commercial orders differ when computing a cost basis. I compete constantly with three other shops on commercial bids. One is strictly a commercial operation and the other two are a combo retail / commercial.

    I do not lower my profit margin to get the job. I need a certain level of income and if someone beats my price they deserve the job and the lower return on investment. What I have done is move the commercial customer from wood to poly, and/or call the supplier and try to negotiate a better deal on the supplies. I can't - nor do I aspire to - do every single commercial project, just as I don't expect to do every retail job.

    Those shops that are not busy, or one-person operations may feel a need to discount just to keep the customer. Of course, even with commercial, the customer will expect it over and over again - IF they actually are a repeat customer in the future.

    I guess I'm lucky in that I do not have to provide discounts - many of which are artificial. I guess I could do what M does -- triple the retail price and then offer 50% off. But I think it's disingenuous.

    :kaffeetrinker_2:
     
  16. Kirstie

    Kirstie PFG, Picture Framing God

    I agree, Rob. I have personal experience with this concept. Last year I had the opportunity to beat the price of a framer servicing a corporate account. I low-balled the estimate with some trepidation because I could barely make money on the deal, but I got the sale and I got the account. That original sale has now changed, upgraded specs and is bringing in more money and continued volume from many departments within the company. And, the volume that this bread-and-butter account brings in justifies more boxes of moulding at a better price. A win-win because I took a chance.

    There is more than one way to price match. For a walk in customer wanting me to match a price, no I would not, because we don't lower retail prices on demand. However, we do offer a monthly discount in our newsletter program. I would offer the customer the monthly discount, sign him up for the newsletter in order to solidify the relationship, and offer more design alternatives if necessary to get the price in line. I can do this all without giving the customer the idea that anyone just has to ask to get a discount. That is not our policy.

    Give me a few minutes with such a customer, and I will often manage to sell them a better design at a price slightly more (or less) than they asked me to beat because it won't take long to show them that we offer service, quality, design, AND price.
     
  17. pwalters

    pwalters SGF, Supreme Grumble Framer

    Queen - That's fair. So if you are getting a 60% gross profit margin at the counter, you won't settle for less than a 60% gross profit margin even on your corporate work. Interesting. Again, different strokes for different folks.

    My last "big" corporate job was over $10k and if I were holding the same gross margin that I had at the counter for the "normal" customers it would have been well into the $20k range. And I wouldn't have gotten in. All in all, it was quite profitable even at the lessor margins.
     
  18. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Sorry, I wasn't clear on the cost basis point. My commercial bids are at a lower margin percentage than my retail counter. Nevertheless, it's still a fixed percentage. As an example, the retail may be chop x 5. The commercial is calculated at cost + profit percentage. That percentage is a constant.

    I have a question for those who provide a discount. What do you do when you've provided a discount for a new customer because he came in with a quote from another shop, he then tells his friend - also your customer - of the discount and how he did it. Do you apologize for overcharging your previous customer (his friend) when he comes in again or give him the discount on his next order? And, what happens if the original customer is so miffed that he never returns? Also, how do you now handle BOTH customers who will now expect the discount on every visit and may well have told the entire yacht club about it? I'm just curious.

    :icon45:
     
  19. Dave

    Dave SPFG, Supreme Picture Framing God

    On a large commercial order economies of scale usually kick in but not always. Sometimes the pieces are all different with totally differing designs. Because of shear volume I will generally quote a lower price than an individual retail order.

    Other times the items being framed are similar or the same using the same moulding, mats, etc. Here the pencil can really be sharpened and I always go to my vendors for price support to maintain profitability but be as competitive on price as I feel I need to be.

    Quite often the problem with commercial orders is not what is seen but what is lurking in the bushes. Such things as the understanding of payment terms, delivery and/or installation concerns, change orders in the middle of a job, timetables, material availability, yadda yadda yadaa can come into play and gobble up any profit that might have been made if not addressed ahead of time and you shave it too close.
     
  20. Jay H

    Jay H PFG, Picture Framing God

    The what-if train never stops. I prefer not to get on. I have had maybe 10 clients in 7 years come in with a quote from another shop. I think I was able to beat them all with no price adjustment. Even if I opted to adjust my pricing for this particular client, it doesn't happen enough to make store policy. If it did happen often AND I was well over the estimate, then I may wish to review my offerings and pricing anyway. Because I feel like I'm in line with the market, it wouldn't bother me if every single client walked in with an estimate. Heck I may get a raise.

    The beauty of business ownership is becuase we have the ability to flesh out our dream with few limitations.
     
  21. pwalters

    pwalters SGF, Supreme Grumble Framer

    To be honest, I can't answer that. I've never seen it happen ever. However, in understanding retail, I suppose that one could assume that there is some understanding on behalf of the general public when it comes to coupons, discounts, sales, promotions, etc. If customer A comes in with a coupon and customer B doesn't, do I automatically have to give the larger coupon to both parties? No. In fact in St. Louis there is quite a bit of couponing that exists. Always has been, no matter what any speaker said during a speech. We send different coupons to our existing clients that we offer in any of our prospecting efforts. So I guess we do this all day long. Never gotten bit by it before, so I'm not going to worry about it happening. I also don't wake up worrying about being hit by a bus either.

    One other point, I don't know about your customers, but again, as I've mentioned in previous posts. I don't agree with the assumption that giving a discount once means that someone is going to expect it forever. In fact, as I just mentioned, we run various promos and just because I give customer A something off on this order as a result of our anniversary sale, they don't come back looking for a discount all of the time. So in my experience this isn't a concern.
     
  22. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    welcome to the quandry of lowering your prices. it won't happen often, and its hard to know what you are beating when it comes from someone else unless they know the exact frame. so they may quote a price of a cheap frame and want an expensive one for the same price. so i agree... lowering the price to much may be a bad choice sometimes to get the business. and yes... they always want the discount!!!!
     
  23. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    I wasn't asking about coupons or special promotions to the general public. My specific question was about matching a competitor.

    I think my scenario is valid. At my yacht club, members constantly compare products, services and the like. I think I'd be a little more than irritated knowing my order was charged at full price, but my neighbor got a discount from the same establishment simply because they provided a bid from another establishment.

    It seems to me that targeted, unadvertised discounts provide for unintended consquences, not to mention a lower profit margin.

    :kaffeetrinker_2:
     
  24. Kirstie

    Kirstie PFG, Picture Framing God

    I really should not let myself get into this, but I have an answer for you from my perspective. We ONLY discount to our newsletter members who get a monthly coupon on the first of each month. Essentially, when I add a discount to a new customer's order in order to get the sale, it is because I have signed him up for the newsletter. The other regular customers that you mention are already in "the club." Anyone can join. No one is miffed. The reality is that the new customer comes in, places his order, then gets the emial the next month and has an opportunity to come back with a coupon. We don't have problems with this at all and we retain our customer base.
     
  25. Jay H

    Jay H PFG, Picture Framing God

    I would think people at a yacht club, or any other club for that matter, would prefer to trust the people they do business with and not get 2 or 3 estimates on each project. If they wished to do so, I think I would be in line (usually below) any estimate they would bring in when comparing apples to apples.

    It's also important to remember that what we do is custom. Each exchange is handled on the merits of that project.
     
  26. Dave

    Dave SPFG, Supreme Picture Framing God


    I'm with you Queen... I have one price at the retail counter. I will only vary from it with good justification. Reasons may be:

    Using up some scrap moulding or other materials I have on hand and am glad to get rid of...

    Multiple quantities of the same or near same design.

    Interior Designers also get a discount.
     
  27. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Wow. I'm still not getting any guidence on the specific question of the competitor bid and how someone would handle it. Each response has concerned coupons, newletters and the like. Nothing addressing the scenario I posed.

    :popc:
     
  28. Dave

    Dave SPFG, Supreme Picture Framing God

    I did Queen... it is a non-issue because I have one price.

    How someone who has flexible pricing would handle it I have no idea.

    Also, those of you who have variable pricing and employees who
    has the authority to vary your pricing to match a competitor?
     
  29. Jay H

    Jay H PFG, Picture Framing God

    I have a question for those who would discount to get a client. Would you ever agree to pricing that wasn't profitable? If you offered a deal on monday, would it bother you do it again everyday for the rest of that week?

    My theory on pricing is to never make an offer that would bother you if that was all you sold. If a client came in with an invoice from another shop, I feel we should be able to provide equal value. That may mean we deliver, we offer better matting at a slightly higher cost. Or maybe we beat their price and do the job exactly as described. Failure to do so, probably means we offer less value. Once we agreed on the exchange, then it woudln't bother me if they brought every single member of the yacht club in the next day for the same deal.

    The "what if" may be valid but can't imagine it happening often.
     
  30. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Agreed. But the initial subject matter of the thread was "matching" a competitor bid - which I don't do.

    The scenario I provided produced responses about coupons, newletters and the like, but nothing from those who DO discount as to how they would handle that customer, the customer who got wind of it and the possible unintended consequence of losing a customer because of it.

    I would certainly like to hear from those who provide the competitor discounts how they would handle that type of scenario.

    :kaffeetrinker_2:
     
  31. Jay H

    Jay H PFG, Picture Framing God

    When you refuse to match prices, what are the details generally speaking?

    Are they selling the same products at a much lower price? Are they selling cheaper products that you refuse to sell? What is the situation that causes a would-be customer to get a bid from another shop, visit you, and leave without an agreeable deal? How much different are you in price? Why are the prices so different?
     
  32. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Let's make it simple and say all items are equal. The competitor bid has the same moulding, mat, glass etc., but his quote is, say, 20% less. Then take the scenario I posed and tell me how you'd handle it.

    :thumbsup:
     
  33. Jay H

    Jay H PFG, Picture Framing God

    I see. I guess we have to make one of two assumptions. One is that the other shop is profitable at 20% less. The other is that they have a defunct business that won't be around much longer.

    There are a few things I would consider. I'm not sure which I would do because again this has never happened to me. For starters I would is assume that shop A is on solid ground and will be selling frames at this price for years. Is there anything obvious about the job that creates the price difference? Do they have a Durable Competitive Advantage? If theirs is price, what is mine? Can I sell the client on that? Am I buying to expensive? Maybe I need to contact my suppliers. Is the product in question a brand I don't carry? Could I for the same price?

    To answer your question, I would try and match the price unless I can find a very valid reason why their price is bogus. If we're off by 20% then one of us has something funky going on but this is my problem. Asking a customer to understand the difference, with all other factors being equal, is unreasonable. Maybe that shops durable competitive advantage is price. If I don't care to get into that arena, then I must have something of value to offer that will justify the 20% price difference. I would either try to match the price or understand why I cannot.
     
  34. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    OK. So you would match - all things being equal. Now, what do you do when you've provided the discount for the new customer because he came in with a quote from the other shop, he then tells his friend - also your customer - of the discount and how he did it.

    HERE ARE THE QUESTIONS: Do you apologize for overcharging your previous customer (his friend) when he comes in again or give him the discount on his next order? And, what happens if the original customer is so miffed that he never returns? Also, how do you now handle BOTH customers who will now expect the discount on every visit and may well have told the entire yacht club about it? I'm just curious.

    :kaffeetrinker_2:
     
  35. pwalters

    pwalters SGF, Supreme Grumble Framer

    I'll present a recent (two months ago) situation when this did come to be, and tell you how we handled it.

    A lady had 11 pieces to frame. New to the area, but was familiar with custom framing prices. She came in to my shop with 2 mouldings in hand. One was a company I carried, another was a company that I threw out of my shop over 7 years ago for out of stock issues. She had been to two shops to work up the design and had gone to another shop to get price. She didn't like the original shop that she worked with because they leaned on her hard to do the order. She went to the second and thought their price was high, compared with the first shop.

    She was doing 5 pieces that were going to be 24 x 36, creme mat, fillet, cc glass in one frame. 6 22 x 28 photographs in the other frame, each with a liner and cc glass. Before she told me the saga of her prior visits, one of my employees worked up a quote for her. Since I don't deal with the old company any more (other than when matching something from some time ago) I have them marked up with a 30% premium in my system. If I am going to sell them, I'm going to CMA! So we turned up to be very competitive on the 5 that were with the company that I do deal with, but high on the others. She then produced the written quote from shop one (yep, they let her out with samples and a copy of the ticket :nuts:), explained what she had been through and said that she preferred the way that we worked with her, liked the fact that my employee walked her through how we were going to mount the pieces, information about different glass types (which neither shop had done) and the fact that we offered to deliver and hang without charges since there would be so many (which I was the only shop who offered this). However, my price on the 6 pieces from the no good vendor were in total a few hundred dollars higher and she was trying to get this all done within a budget that hubby wouldn't let her deviate from.

    When presented with that information I decided to match the price instantly. I knew my margins would still be fine and saw the benefit of doing this. She was thrilled. Handed over the credit card for a little over $4300. We did the job and hung it.

    Now, she is new to the area, so I don't know that she would tell anyone, but if that happens I'll let you know. What I do know is that she has been back in with two other pieces and didn't ask for anything special/above and beyond/etc. So for those of you that are so sure that they will "ALWAYS" want a discount "EVERYTIME", I would caution you against making absolute statements.

    Now tell me Queen, Dave and others.... you wouldn't have adjusted your pricing to get that job?
     
  36. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    what if you just tell them a price and never tell them that its actually discounted to get to it?

    i had a friend that worked for another frame shop... will remain a secret... but for interior designers, he was given the go ahead to raise their prices by 20% and then tell them that price and then their normal price after saying the higher price... he said that worked for them and they felt special. :)
     
  37. Jay H

    Jay H PFG, Picture Framing God

    I did not say that. I said I would "try". Then I explained my reasoning for trying. Its my arugment that we should either try and be similar in price or identify why our higher price has value. Failure to do so is our fault and our problem.

    If I desire to stay in business, I would need to understand why the other shop is so much less.

    Again this is the problem with "what if" land. Since none of this is reality, we can create sceneros that aren't likely to prove why the way we handle likely situations are unreasonable. If it's determined that I am overcharging then why would they keep comming to me? If they do, then clearly my shop offers an advantage other than price that the other shop doesn't. In that case all things are equal.

    He shouldn't return if all things, except price, is equal. If he never returnes I have failed to opperate an agreeable business.

    If the come in with an estamate that says "24x37 frame 2304930, double 4" mat 2308 & 2093, and super megga glass @ $455" and I agree to match that price, I wouldn't care if the entire club did the same. I would take each of their invoices and try to match the prices they recieved. If I cannot match the other shop on a product by product basis, then I will be prepared to explain the differences and why my shop still has greater value.

    If all things are equal, and you're 20% more, and all other factors are equal, how do you justify that?
     
  38. Dave

    Dave SPFG, Supreme Picture Framing God

    I can't recall anyone asking me to match someone else's price but this discussion reminds me of a time many years ago when someone did just that to my dad. He had already figured up the cost on a job when the customer popped the question but had not been told our shop's price yet.

    My dad said "Possibly... what price were you given?".

    "$ XXX.XX ea" the customer said.

    "I guess I can match that", my dad responded.

    The customer placed the order and left. My dad matched the price alright. It was about 15% higher than our normal price! My dad said he thought about giving him our regular price but the guy pissed him off so much he just matched it!

    :D
     
  39. pwalters

    pwalters SGF, Supreme Grumble Framer

    Queen, I'm guessing you are also a boater and if so then you know that boaters are always sharing information about great deals. Whether at Overtons, or through iBoats or some other venue. Something special through West Marine for me and I tell someone at my marina (not a Yacht Club) that I got a great deal, I've never seen anyone get upset about it. Now, if it were the exact same thing, then maybe they would potentially be a little upset, but in custom framing how often are you doing the same thing over and over? One of the great things in our business is that each item is generally unique, different size, etc. I think your assumption here revolves around a hypothetical scenario where two slip neighbors both framed the same item and one saved a little because of the price of the other shop. Just don't see it happening. On the other hand, if someone came in and said that their friend only paid x for their framing and they paid y, I would explain how they likely had a different design and that's the reason for the price difference. At least, in my world that's how it would work.

    By the way, what type of "hole in the water" do you throw money into?
     
  40. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2


    Totally different. Ten or more frames get a commercial quote in my shop. I'm talking about one frame. One person. One quote from another shop. In this thread I've been told more than once that others would "match" the price to "get" or "keep" the customer.

    But no one seems to be able to answer how they'd handle the issue as I've outlined it. The bottom line, in this scenario, seems to me that while you may have gotten the "new" customer with a match, you may have also lost an existing customer. You would never know. And, if the existing customer came in and said, "Hey, my daughter's UCONN diploma is in the EXACT same frame as my neighbor and you charged him 20% less" how would you handle it?

    No one seems to be able to answer that scenario.

    :kaffeetrinker_2:
     
  41. pwalters

    pwalters SGF, Supreme Grumble Framer

    I know because of the stance that I've taken that it might seem that I'm always the higher one, but often I do have a better/similar price and get the job without matching. I don't know that I could pull this off (it is funny though:D), but usually I'm able to give them a better price as my "all the time price" without them knowing I actually discounted it. As I mentioned earlier in this thread, usually it works out that I am "magically" lower if they tell me the price up front and the client never knows that I worked some new math to get there. They are just under the impression that I'm less expensive.

    The fact is, even with these folks, usually once we get them and they believe that we are price competitive, we usually keep em.
     
  42. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer


    id take my chances and risk it. not really going to happen unless its the same customer asking for a discount every time... not with coupons or other offers...
     
  43. Dave

    Dave SPFG, Supreme Picture Framing God

    I think because the chances of that happening are about as good
    as my winning the lottery. Like Paul said, this is a scenario that
    just ain't gonna happen.

    Where you can get into trouble is if you quote your regular price and
    then give a percentage discount to one customer and not another.
     
  44. Ylva

    Ylva SPFG, Supreme Picture Framing God

    Paul W; interesting story. Do you think she really would have walked though if you hadn't price matched? Apparently this lady was very taken with your approach, your service, your knowledge and already had decided at that point probably that you would be her framer no matter what.

    Having said that, I might not have price matched, but maybe thrown in some extras (free glass upgrades for instance). I honestly don't know; it would be an on the spot decision probably.

    Not fair, but we all know that some customers will get better service than others...depending on the customer themselves.
     
  45. pwalters

    pwalters SGF, Supreme Grumble Framer

    Ok. Here is another. I had a customer who recently graduated from the University of Kansas. They had an option to order their diploma framed. Before doing so, the mother brought the catalog in to me to see if I was able to do it. They were not existing customers. I was able to source a similar frame, but instead of the $150 price tag (plus $20 shipping) I was $190 something (tax and all). I agreed to do it for the $170 (plus tax) that it would have cost them, as long as I didn't have to rush it and could push their due date to more easily fit into my production schedule. She bought. Since then, I have framed the daughters Masters from Saint Louis Universitya as well (a gift from the mom) and there was no matching of price, etc. Just a normal sale.

    I gave up less than $20, and they spent almost $400 to do the Masters framing. Again I ask, you wouldn't do this?
     
  46. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    More importantly is how do you explain to your Yacht Club buddies why your prices are ALWATS 25% HIGHER than the competition for the EXACT SAME JOB. That would concern me more than explaining a new customer discount.
     
  47. pwalters

    pwalters SGF, Supreme Grumble Framer

    While one could hope, the truth is that she was on an inflexible budget for those two rooms (hubby is a bit of an a**) and all things being equal or better, she was going to need to be under that number.
     
  48. pwalters

    pwalters SGF, Supreme Grumble Framer

    Bingo.
     
  49. Dave

    Dave SPFG, Supreme Picture Framing God

    Good scenario we can focus on now, Paul.

    I'd contact the university and see if I could get that job of framing everyone's diploma's for $ 150.00!!! Those folks are making a killing.

    You are producing a one-up with marginal profit and they are framing possibly thousands of them. Where can I get a gig like that???

    :kaffeetrinker_2:
     
  50. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    You should meet my Aunt. She hit the first drawing in the CT lottery years back! A new Caddy and trip to Italy spent that cash quickly! hehe

    But, seriously. This is a scenario that can happen. And, the consequences - especially if you're in a small town - can be unintended and detrimental.

    I rarely lose on price. But, occasionally, someone will bring a quote in that just doesn't make sense. I don't waste a lot of time because the customer is simply looking for the cheapest price. I'm not the cheapest shop. And instead of stressing the price, I stress the workmanship, the fact that all work is done on premises etcetcetc. In most cases I will get the job without having to lower my price. I let the ones simply looking for price to walk.

    My point is that "matching" - at least in my shop - is not a good sale tool. It simply tells the customer that my price was too high to begin with.

    And I won't :bdh: any further! :)

    :D
     
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