Posted on Friday, August 24th, 2018
We recently asked readers of our Trade Secrets e-letter if and how they charged for sign design. The survey was sparked by a reader’s question about why sign shops often do sign designs at no cost to the customer in an effort to sell the job. You’ll find the survey results in Do others charge for sign design?
Along with the survey questions, the 200-plus respondents gave us plenty of feedback. We read loads of excellent comments—35 pages in all—on this challenging issue. Many readers have struggled with this and arrived at workable solutions; others are still struggling.
We’ve distilled those comments into a simple explanation of how they avoid falling into the trap of doing designs for free, and investing time in drawings they don’t get paid for. Their guidance is priceless for shops who use their design skills to sell their work.
Many said they had been forced to find a solution after years of doing designs at no charge as part of the sales process. Interestingly, no one said they had tried charging or getting a deposit then gave up. Many, though, said they were doing it successfully and wish they had started years ago.
Two approaches led the pack. These are proven solutions that will help you eliminate wasted time and contribute to your bottom line. But you have to start using them and stick with them, even when tempted to do a design on spec.
Get the deposit first: The first, and most common, solution was to include the cost of design in the quote for the sign, then get a deposit before producing any drawings. This means selling the customer on the idea that you will be able to create a satisfactory design for them, by showing them examples of what you’ve done for others. Those who use this approach said you need a strong portfolio to do this—both on your website and as a physical or digital portfolio. Most got a 50% deposit.
You also must believe in the quality of your design work and see the value in it. And you need to be committed to using this approach, especially for new clients. Any design done before getting a deposit exposes you to the possibility of not getting paid for that time—and maybe having another shop produce the sign from your design.
Sell the design, then the sign: The other approach readers described was to charge a separate fee for the design up front, then provide a quote on the sign. Many used this approach with logo design, explaining to the customer that they would be able to use the design across all their advertising—including their signage. Some also used it when a customer pressed for a sketch before committing to buying a sign, explaining that once the customer bought the design, they would be free to shop around for someone to produce it.
Some people used a combination of the two, charging for the design as a logo up front, often as a part of a package that included signage and/or vehicle lettering. When the design was only for use on a sign, they included the cost of the design in the cost of the sign, then got a deposit before providing a drawing for approval.
The thumbnail sketch: If you can do a quick pencil sketch, that can serve to get the customer’s confidence and get a deposit or a fee for the design. Not everyone has the drawing skill to produce an appealing sketch as the prospect watches, but it can be very impressive to many prospects. They may get enthused about seeing what you can do (and by your creative skills) and realize they have come to the right place. Be careful, though, about doing this on the computer as the prospect watches. They are likely to assume that creating the design is quite simple and therefore has no significant value.
Free sketches are a guaranteed loser: There was universal agreement, though, that if you provide designs at no cost and with no deposit on the sign, you can expect two things: Many of these prospects will not buy the sign, leaving you unpaid for the time you spent on the design, and some of these prospects will take your design to another shop to have the sign made at a lower cost—because the design was already provided by you (at no cost). Even those who felt they were forced to do drawings for free by their market agreed on this.
Here are more of the key points these sign business owners made in their comments:
“We don’t do designs on spec.” When you provide a design to a prospective customer without them making a financial commitment to pay for the design or to buy the sign (and the design) you are designing “on spec.” You’re speculating—betting, that is—that the design will make the customer buy the sign. It is a high risk gamble, primarily because once the prospect has your design in hand, he is free to take it to someone else to produce the signs.
“I don’t have time to go to the lawyer.” Even if you use watermarks or copyright warnings on the design, you are opening yourself up to spending time and money going to small claims court or having lawyers write letters demanding payment for the design. You may get paid for the design, but you will not get paid for the time you spend trying to collect. It will take valuable time that you could be using to produce and sell other work.
“I wish I had done it from day one.” Many said they did designs for free during startup and it became a standard practice. In time, it became apparent how much time was being spent for jobs that never materialized. Once they started getting deposits, most regretted waiting so long. As one put it, “It frees up so much time to focus on production and customer service when you’re not chasing something that probably wasn’t going to work out anyway.”
“We have to educate our customers.” Some may assume that design work is free. Others may have dealt with sign shops in the past who did free sketches. One respondent said that he finds that a simple statement like, “We appreciate this opportunity to work with you but we can’t give away our time for free…” was often all that was necessary.
“Sign businesses undervalue their considerable design talent.” If you don’t realize that the skill required to design effective, creative signs takes considerable time and talent, you will have a hard time selling your design work. If you know the added value a good design brings to a sign, your prospect will pick up on that.
“Don’t slip or cave in.” One commented, “Whenever I slipped and did a design in advance of receiving a deposit, it almost invariably burned us. Now we stick to this policy and I’m pleased with the results. Surely we do not convert some estimates to sales due to this policy, but we are clear with our expectations and the trade-off of not performing unpaid work is worth it.”
“People see little value in something they got for free.” It’s true. When we value something, we pay for it. This sign maker went on to say, “They will have no qualms about shopping your free design around to the cheapest shop in town. I don’t even turn on my computer without a deposit. At the very least, a deposit qualifies you to the client. I learned early on to never design for free, hoping that the client would buy the sign or logo.”
“This is the biggest black hole expense a sign shop can plug.” And that’s probably true. Free drawings often increase the time required to sell the job. You may find yourself doing several free revisions to your free design—only to have the prospect not buy anything from you in the end.