Posted on Wednesday, August 8th, 2018
The other day, we got an interesting email from a reader about a topic we’ve heard about many times before: Why do many sign people do design sketches at no charge? Is there a way to avoid this time-wasting, profit-eating issue?
“Has SignCraft run any articles about shop policies dealing with the ever-increasing problem of customers expecting free sketches as part of the bidding process?” Michael wrote. “The general consensus in my area is that free designs are expected when pricing any new work.
“I know of no other trade where this phenomenon exists. Every other trade bids on work that’s been hashed out and designed first by an architect, engineer or graphic designer, then the production cost is bid objectively by the trades involved. But in the sign world, bidding becomes a design contest as well as a pricing war.
“How do other sign shops handle this problem? Over the last 40 years, I’ve lost tons of money doing free designs for jobs that I never got. Have any sign shops changed this dynamic to avoid complying with the attitude of entitlement of potential customers?”
In our latest Trade Secrets e-letter, we put that question to our readers. Over 200 completed our survey, giving some great insight into how they deal with this issue. Thanks to all of you for helping out on this, and for all the great comments. The comments filled over 25 pages, and once we sift through those we will share some of them in the next Online Exclusive article.
Most of the responses came from owners of well-established sign shops from coast-to-coast:
89% had been in business for more than five years.
76% had two or more employees.
57% were in mid-size towns or suburban communities. 25% were in small towns or rural communities. 18% were in large cities.
Here’s how their answers to our questions averaged out:
Do you do sign designs at no charge as part of the sales or bidding process, or do you charge the customer up front for the design—separate from the cost of the sign?
If you charge for sign design up front, do you use a flat fee based on the type of sign—such as a wrap, storefront sign, truck lettering, monument, etc.?
If you don’t charge for sign design up front, how do you recover the cost of the time you spend on designs?
So about a third of the respondents said they do not charge a fee up front for sign design. The remaining two-thirds said they do charge for design up front, often in the form of a deposit on the sign.
Some said they are unable to recover the cost of the time they spend on designs for jobs they don’t get, while others add the cost of the design into the cost of the sign they are bidding on. The problem, of course, is that if you don’t get the job, you’re out the time you spent on the design.
There are many great ideas on avoiding the “free sketch trap” in the comments we received and we’re looking forward to passing those along. Watch for the next Online Exclusive to learn how others charge for design, developed their design fees and how they explain it to customers.