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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. Ylva

    Ylva SPFG, Supreme Picture Framing God

    That's why I would call it an on the spot decision. I might have done the same thing, just depending on the customer.

    As for your second story; yes, I would have done it the same way too.

    But there are too many every day scenarios, and even in some of my decisions I'm not always consequent.
    If someone comes in with a quote in hand (which almost never happens) I will try to match it.

    If I just spend 2 hours on design with a customer, quote and then the customer asks if I can do it for $x instead, I politely decline.
     
  2. pwalters

    pwalters SGF, Supreme Grumble Framer

    Thanks for addressing it specifically. I agree with you that it's all situation by situation which is why I find an absolute statement of NO very tough to understand. Now, I was asked for specifics and provided them. I in turn asked if those that wouldn't match would in those cases and haven't seen those answers yet (although Queen did state that the 11 piece order was a different scenario). I'm hoping to so I can better understand this philosophy.
     
  3. pwalters

    pwalters SGF, Supreme Grumble Framer

    What if it was a 9 piece order with the EXACT situation I described?

    Would you match then?
     
  4. pwalters

    pwalters SGF, Supreme Grumble Framer

    Here is where I agree with Jeff. If you have gotten to the point where you are presented with the opportunity to "match" then it must have been discovered that you were higher. Right? So the customer already has the impression that you are too high. No?
     
  5. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Now, that Jeff, is easy. It's the same answer I give to the person holding the cheapo quote from down the street. I point out the attributes of the shop, but then ask 'why do you think they are so cheap compared to me? There must be some difference in quality etcect. As I've said previously, in most cases I get the job regardless and in the few where I don't, I let them walk.

    But, here's something I've come across more than the discount / match issue: Customer comes in for the "cheap black frame." I do the job at my standard price. I do carry a nice 1" cheap black frame that I buy at box price of 43 cents a foot and sell for $5.00 a foot. Notice the markup. ANYWHO, the customer comes back many times and places orders for much more expensive materials. I asked one about that. The response? "We wanted to check out your workmanship without spending a lot of money."

    Someone asked me once what was the best compliment I ever had. The answer: A repeat customer!

    ;)
     
  6. Ray Bragg

    Ray Bragg CGF II, Certified Grumble Framer Level 2

    In most matching scnerios I find it helpful to tell the customer that I know what my skill level and abilities are worth, That if my compettitor is cheaper it may be because he is not worth the extra.
     
  7. Jay H

    Jay H PFG, Picture Framing God

    So all things aren't equal? (sigh)
     
  8. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Of course. Only in the scenario I provided. I didn't say that scenario occured in my shop. I like to think I provide a higher quality product in terms of fit and finish than any other shop - whether or not that is true is in the eye's of the customer.

    :kaffeetrinker_2:
     
  9. Ylva

    Ylva SPFG, Supreme Picture Framing God

    As stated before; I very much make a decision based upon a situation I find myself in.

    So in that regard I could say "I don't price match" but I can also say, "I can match that price".

    You might not think there's a difference, but there is.

    Now, if it's just a price shopper; I probably couldn't or wouldn't match. If it's a question about gaining a new customer for life, oh heck yes I'll match a price. The few dollars less in profit are well spent in that case.

    But how many times do you have customers in your shop with a specific quote in hand? It has not happened to me.
    In order to match, you need to compare apples to apples.

    One of my best customers is an artist. The very first time she emailed me with a quote request. I knew she was going to contact a lot of framers.
    End of story was that I was the highest priced.
    I called her to chat, told her what it was I actually quoted on. She came in, was impressed what I offered and has ordered from me ever since. She understood the need to compare apples to apples and none of the other framers had spoken to her in detail.
     
  10. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    No. Once again, I see no point in matching anyone's price be it on a written quote, coupon or any other media. I simply do not match prices.
     
  11. pwalters

    pwalters SGF, Supreme Grumble Framer

    Very good then. I'm a bit surprised that anyone would turn down that job, but then again, that's the beauty of this type of forum. I guess it is working for Queen because from what I understand, she's quite recently lost another competitor in St. Petersburg (or so I understand), so it must be working for her. Where I am my strategy works well for me. To each their own, I suppose.
     
  12. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Unfortunately, you are correct. And, not only one, but two in the last two weeks. It really is a shame to watch these places close. But, one closed that was known as the "cheap frame shop", the other is closing but the owner is moving the equipment out of state to another location. His shop is known in town as one of quality, so it's a shame to see him go.

    BTW, I should say that in the scenario order for 9, I would have encouraged the customer to "look around the house and see if there's something else I can frame for you so I can give you a commercial rate." I've used that line before and it seems to work.

    :popc:
     
  13. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    While I'm not offended when Framing Queen equates "cheapo framing" with poor workmanship, I'd like to point that I fall into the category of "cheapo" and there is nothing wrong with the craftsmanship our stores are capable of. After all, we're going on 33 years in the business and we know how to make frames.

    If there's any doubt, check out our web site: click on Frame Outlet and then on Pricing Examples" (we never got around to applying the prices) and scroll down to the closed corner teak frame. How many shops can routinely do that from rough sawn wood? Then check out the Frame Works's examples, especially the construction of the presentation case for a ceremonial shovel, again made from raw material.

    Then, for the heck of it, check out the Frame Outlet back room to get some idea what we're capable of.

    We turn out high quality, high value products for a reasonable, competitive price.
    As far as I know, there is no correlation between price and quality of workmanship or or quality of a shop.

    BTW, I only take offense when it's intended.
     
  14. Kirstie

    Kirstie PFG, Picture Framing God

    Warren,

    Do you try to compete on printing, or is that a different ballgame? It would seem impossible to compete on scanning or printing with the Internet and every Kinkos or Copy Mat as a competitor. Obviously your equipment is far superior as is much of your framing equipment, but if you don't mind, tell us about print pricing and how that correlates to frame pricing in expertise, equipment, and cost of goods.
     
  15. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Kristie, of course we compete in printing and digital Imaging; there's no reason to be in business if we can't be competitive. When our new scanner (it weighs 1700 lbs and is coming from Germany air freight) is installed, we'll be very competitive in digital imaging; probably only 4 other places in the country will have our capabilities (currently, there are about 30). Competition is all about offering services as well as good prices.

    Kinkos doesn't have our capabilities in printing; we can print up to 60" wide. We also offer way more paper options from Epson Enhanced Matte ($5 sq. ft.)to Hahnemuhle William Turner ($14 sq ft). For the clients who care about color we adhere to all icc color standards; we have 17 different media profiles (custom made in house) for each of our printers. We offer all this and still compete on price. But we don't bid on volume printing jobs because there are mass printers who do that work. Our niche is small, high quality runs at reasonable prices. You can't do everything but you should be able to do a lot.

    We also offer a lot of experience, 10 years beginning at pretty much the beginning of high quality ink jet printing. We know a lot about it. We've had artists as far away as New Mexico spend a week with us. We offer profiling services, printing services, imaging services and we compete in every area.

    The new scanner (Cruse 220ST) is a big risk in this economy, but it will put us out ahead of the pack because I doubt many competitors will make this kind of investment. That's competing in the fast lane. Who knows? There will only be a very few places that can make a high quality 42 x 78 300ppi scan with no stitching
     
  16. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Well, Warren, I was certainly not referring to your place of business which is obviously a well run and established organiztion.

    Instead I was refering to the store down the street from my shop that is known as the "cheap frame shop" -- a phrase the owner himself would use to compare his operation to mine and others in town. His point was he was inexpensive next to the rest of us. His whole business plan seemed to be 'I'll just be cheaper and the rest will go out of business.' That, of course, never works. I was not insinuating his workmanship or quality were any better or worse than mine - just his price structure.

    He lasted about a year and a half.

    But, I have to ask: If your prices are that much lower, why would you not raise the prices and increase your profit margin? Possibly the same philosophy I use concerning discounts. I'm just curious.

    :kaffeetrinker_2:
     
  17. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    Framing Queen, the reason i don't raise my prices to meet the competition's is that, as with just about any service or product (with the possible exception of medical care), the demand for picture framing is elastic. The lower the price, the greater the demand and the greater the demand the more volume I can do the the better the discounts I can negotiate with my suppliers. Elasticity of demand should be a matter of grave concern to all of us selling non necessary products in the depths of a recession that may last a long time. What few framing jobs that are available I want to get a shot at. We do a lot of business with the movie industry for one reason only, price (they take same day service for 20 frames and high quality for granted). I think "Frame Outlet" pretty much shouts "cheap frame shop"; at least that was why we picked the name. The Frame Works was a frame it yourself shop for years with a similar reputation. We're proud to offer low prices.
     
  18. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    Fair enough. It's a legitimate business strategy. One strategy takes customer volume over price (the lesser priced store) vs the establishment which carries higher retail prices to cater to a lower volume in the number of customers. I'm the latter. I'm still less expensive than, say Michaels. And, I can't really say that in 100% of the time because I don't "shop" my competition. But, from the printed quotes that come in from Michael's and JoAnn, my standard retail is always less.

    It's also because I don't want a large staff or retail space. I was just curious as to your thinking ....

    Now it's almost time for happy hour!

    ;)
     
  19. pwalters

    pwalters SGF, Supreme Grumble Framer

    Queen, I assumed that the store I knew of closing was the cheap one, but now I guess it is the one that did good work. They were there much longer than a year and a half. I'm talking about the "factory" option. I had thought that they were the cheapo option.
     
  20. nikfrz

    nikfrz SGF, Supreme Grumble Framer

    I just let one walk today.

    A man that I know comes in with a framed golf print that was framed by a well known gallery in Myrtle Beach. He has the rights to publish this image, 3000ed. Very nice print BTW. I bought several of them.

    Anyhow, he paid $69 for a 24x29, double black core mat (Berkshire most likely),v-groove, and a current 2 1/2" moulding that I had on my sample wall. The gallery has 1000 ft in stock. He wants to purchase in batches of 20 at a time.

    I just flat out told him that I wasnt going to invest in that amount of moulding, not knowing when that next 20 batch was gonna come around.

    Im busy enough now, that I dont want to deal with that headache. I am middle of the road pricing, and it has served me well. I have several distributors that give me box pricing on one stick or 50 sticks. However, to qualify for 1000 quantity, I have to buy 1000 ft. Aint gonna take that chance.
     
  21. Kirstie

    Kirstie PFG, Picture Framing God

    Very impressive. A truly unique quality service at a good price. Sounds unbeatable. We could all use a little unbeatable in our businesses.
     
  22. Framing Queen

    Framing Queen CGF II, Certified Grumble Framer Level 2

    OH, no. Quite the opposite. We will all miss Jim. He had a great shop and produced quality work.

    In my opinion, this is a smart strategy. No need to operate your business on the "maybe" factor, as I put it. How many times have you had people come in and say "I have so many other items to frame, etcetc" only to never see them again.

    :kaffeetrinker_2:
     
  23. Warren Tucker

    Warren Tucker MGF, Master Grumble Framer

    "Unbeatable", Kristie? Oh how I wish. It's a pure gamble in this atmosphere and we could take a big hit, one that we could withstand but a big hit nevertheless. One important idea I learned in freshman economics is that there is a direct relationship between risk and return.
     
  24. Kirstie

    Kirstie PFG, Picture Framing God

    Absolutely. We look harder at taking the big risks these days, both from a general economic stance and from the perspective of our age. Buying a few boxes of moulding or a replacement machine is a sure investment, but expansion of space or major services that require expensive equipment are now giving us pause. I should start a thread on business continuation plans.
     
  25. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Any time you buy technology, you can be certain the price will drop considerably in the not too distant future. But in the case of your scanner, it's a machine that not only generates its own income, but also printing and framing revenue, giving it a quick ROI and a nice upside. Sounds like a good move because of its size.
     
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