Start Charging What You're Worth!

[TheHogRing]

It's time to stop preparing estimates with the simplified formula of material + labor = price. The fact is, when customers comes to our shops they are getting so much more than just material and labor.

Take a moment to think of all that the customers are really getting from us. How about the comfort of knowing that their cars are being worked on by qualified technicians in a secured and fully insured shop?  What about fast turnaround isn't that worth something? How about our vast knowledge of the trade, the industry, the suppliers and the infinite amount of materials? That has got to count for something.

To read the rest of this rant: http://tinyurl.com/cdax4ap

[Mike]

Take a moment to think of all that the customers are really getting from us. How about the comfort of knowing that their cars are being worked on by qualified technicians in a secured and fully insured shop?  What about fast turnaround isn't that worth something?

wouldn't this be figured into the shop rate for labors I would if my safe secure location cost more overhead.   
I know when I take  my boat somewere to be worked on I pick a safe place that also doese quality work.

[DCAutoUpholstery]

Most shops just pick a number for their hourly rate that they think is consistent with the industry without considering all aspects of their overhead.

If the customer thinks in terms of paying extra for a secured shop, then the shop should charge accordingly. 

[Rich]

Most people don't give a ****what your overhead is.
If all your charging is labor and materials, what happens when the job doesn't go as planned? Has your labor charge already taken that into account?
Some customers think short-term and shop price, others think longer-term and shop quality. Seek out the customers who value quality as much as price.
Look professional, act professional, charge accordingly.
Rich

[baileyuph]

All points are essential to building and sustaining a high caliber business that properly rewards the business and the employees.

All said and that added is a perspective of the craftsmen and not necessarily that of the market.  This can be verified by looking at the furniture industry in this economic downturn we have been it.  Please take a look at the part of that business that has took a licking.  Point to be made is those furniture industries from manufacturing to restoration by highly qualified craftmen are the ones mostly affected.  All one has to do is drive down main street and those quality brands of days ago are no longer in business.  All this has happened while low quality vendors, especially those with buy here and pay here  maketing strategies, have flourished on a relatively scale.

That is a problem for any business sector, but after making a point out of it, what Rich pointed out about seeking business from quality minded consumers who can afford us is our only salvation.  More bluntly, our type of business cannot survive on customers who cannot pay, on customers who do not value what we do; therefore the over ridding issue is how to more effectively market to those who do appreciate what we do and can afford our services?

How to do just that should be our focus and how can it be identified?

Interesting reading, the challenges of how to do quaity work are equally met by the challenges of understanding the market that will best reward us.

Thanks.

Doyle

[Highvelocity]

This thread jumped out at me...we were discussing the friend discount on my thread. 

But really the more my skills and knowledge grow, the more I feel I am worth.  The quality of my product now versus 4 years ago is night and day.  And I think most will agree that sewing is the easy part. Laying out projects and getting good measurements, and thinking 5 steps ahead so that you don't screw up...Thats the hard part. 

Everyone remember the first corner dart you cut out.  Then you look and saw it was now way too short....haha  People have no idea...

Overhead is what it is, you have to keep the lights on. 

[Mike]

Ed its like my other post of my balancing act patterning the deckboat  over  on the lift. 
Hownto do it eith the bost. Ot on a trailer where one can walk around it.  It eould have been easier but you have to pay if you dont oen a trsiler     The customer come ter he was amazed  how it was done
Owning a bost or a hotrod is a luxery doyle and one pays for that Unlike the buy here oay here customer.
I have yet to see a buy here pay here boat lot

[Highvelocity]

Mike,,,You make a very very good point !!! 

These are luxury items...and what we do keeps them up to date and/or protects their expensive purchase.  And the one off products most of us produce here are amazing...

[gene]

I have acquired a different view of the "friend discount".

If you are my friend, why would you not want to pay full price to help me out in my business? Why do you always want me to help you out by giving you a price break?

Two years ago a friend started her own business. She offered to give me a discount. I asked her what her full price was. She told me. I added 10% to her full price and that is what I paid her. She thought I was nuts. I told her that if she is my friend, why would I not want to help her out, at least once?!? She still thinks I'm nuts, but then, she thought that before she started her business.

gene

[TheHogRing]

Speaking of "charging what you're worth", check out our article on how to increase your prices without angering customers. I think these 2 issues go hand-in-hand:

How to Increase Prices Without Angering Customers: http://www.thehogring.com/2011/04/06/how-to-raise-prices-without-angering-customers/

[Ihavenoname]

2 or more points.

friend discount. Sure I can do with a friend discount.

My friend works for the post office, or Bank, or Government, or phone company. I'd love to have a discount.

Oh, you wanted me to give a discount?  OK, I have some weeds that need pulling, a house that needs painting, a car that needs fixing and so on. I'll work on your project while you cut my grass, make dinner, clean the bathroom, wash and wax my car, take my dog for a walk, clean up his droppings and so on. Some how this never works with my friends. Odd.

No, I don't give friend discounts.

But I do help friends paint their house, work on their car, let their kids spend the weekend at our house while they take a grown up weekend just the two of them, and so on.
Good friend but business is business.

OK if it's small them ok. Dinning chair or fix a seam but no sofa or chair or boat top. Sorry.


Point two a more important point.

Charging what you are worth.

THE SECRET ....

When people call and ask "How much?" it is for one reason only, they don't know how to buy upholstery work be it a boat, or car ,or sofa.

So what you do is not give a price right way. What you do is teach your customers how to buy your product or service.

What kind of foam and why
What kind of fabric and why
Why a 1965 sofa is better then a leather 2012 sofa even if you count the no payments till 2018.
Why upgrading your boat cushions will add years and comfort to their boating life style, and why they need you not Mr Low Price

Here is what I did with some good results. I wrote a phone script then condensed it down to bullet points.

So I wrote down my story and the quality furniture story and the cheap furniture story, and reduced it down to bullet points.

Then when someone called and asked "how much to upholster my sofa?" I would always ask:
Have I done work for you before?
Yes or no I would then tell my story that I planed out. In so I was also educating them on quality, furniture, new junk form Ashly Furniture and so on.

In about 1 or 2 minutes they knew I am a top notch upholsterer, and also I armed them with the knowledge of what to ask the next time they called an upholstery shop.

So when they went to the next shop on the list and asked not how much, but" do you use HR Foams and what Density? or How many years do you have in upholstery and what is your specialty? How long do you guarantee your work? and so on.

So what I am saying is, since most shops only quote price, since most customers always ask "how much?" You separate yourself from the rest pretty fast as professional, knowledgeable, trust worthy, quality minded, worth more then the others and so on. Get it?

Try it. Invest an hour  or 2 making a  phone/buying script, reduce it to bullet points, and focus on creating a buying criteria for your customer based on your product or service.

Test if and see if I am right.

There you go. You now have an answer, maybe not the only one, but one you can use.

I hope that makes sense.

and forgive my know it all attitude. But I am right. This will work if you will try it.

[Rich]

But do you end up getting the job? At your price?
Rich

[baileyuph]

Boats are a luxury item, common sense.  But, are you guys saying all luxury item owners freely spend and accept your price at whatever?  No, they don't.

The point I made with the changes in the furniture example of how - buy here marketers are doing not to bad- while quality name brand frurniture retailers have actually gone out of business is a sign of our market changes.  I am believing also that the economy has had a down scaling effect on marketing to the luxury boat ownes crowd.  Surely your not telling me that all luxury owners, of boats, are freely spending?  Yes, some or alot maybe, who do realize that they are dealing with a luxury issue, consequently hasn't this economy put some check on the market that was there just a few years ago?

There is still a luxury furniture market but it isn't like it was before this economy took place.  This economy has left its print almost everywhere.

Doyle

[Highvelocity]

Boats are a luxury item, common sense.  But, are you guys saying all luxury item owners freely spend and accept your price at whatever? 

I don't think anyone is saying that...  I think that most people who have a passion for there boat or car will pay to have it look awesome...  And like Bonehead said...give them the facts. 

Hey they may not want to spend $$ on Tenara thread or Sunbrella Plus...that's ok.  As long as they know whats out there I think they will respect you more going into the purchase... 

[Mike]

Ive had rhe guy who askes is there a less expensive canvas   
When i say yes.  They may  save $100 on there $1500 cover they see it isnt worth it to them.
Or the guy who i loose to the $250 bimini out of  the dennis kirk catalouge. Snd its usualy 1' over tye fuys head too tall and looks dumb  but for someone who has a nice boat or car. The eill spend what they have to

Just last week i had a guy bring me 3 yards of vinly seat msterial and wated  me to sew premade pipes to replace a rv slide out topper.  Im sure he wouldnt be a customer of mojo   But i got a dinner out of it