Posts Tagged ‘ Pricing Work ’

Interior Insights: Should You Give Estimates Over the Phone?

Phone estimating has been a hot topic of discussion for quite some time and there have been many varying opinions as to whether to provide phone estimates or not. Many trim shops won’t give estimates unless the customer brings the vehicle to the shop, while others will give estimates over the phone.

We’ve all heard potential customers say, “I’m just looking for a ballpark figure and I won’t hold you to the price,” but we know that this is not always the case. It seems that a lot of the time the only price that people remember is the lowest price quote that they heard. In my opinion, the manner in which phone estimating is handled can be a customer service concern and can determine whether you get the job or not.

One of the most-important aspects of phone estimating is who gives the estimate. The person answering the phone might not be the estimator but is still the customer’s first point of contact. If your shop doesn’t give phone estimates, the greeter will need to explain why it’s important for the customer to bring their vehicle to your shop for the estimate. Many shops will provide customers with an additional incentive if they estimate the job in person, like free pickup and delivery service.

If you give estimates over the phone, as we did at my shop, you need to have an experienced, knowledgeable person giving the estimates. In many cases, the person who answers the phone isn’t the estimator. If this is the case, it’s important that the greeter lets the customer know that the estimator will provide them with an estimate.

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Why You Should Ask Your Customers to Leave a Deposit

Joe Griffin decided he’d start having his customers leave deposits on work done at Joe Griffin’s Custom Upholstery, the Oakland, Tennessee, shop he’s operated for 34 years, after he got stuck with an interior kit a customer changed their mind about. He now asks for the cost of materials on made-to-order kits and a 50-percent deposit on custom jobs.

“We don’t have money tied up in a lot of different jobs,” he said. “If we get a deposit and they change their mind for some reason, then we’re not stuck with the cost of whatever it is.”

There are a number of reasons why a shop will decide to ask for a deposit, including personal experiences like Griffin’s, but whatever their motivation, shops that are taking a down payment on projects are experiencing various financial and operational benefits.

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Interior Insights: Using Pricing Tiers to Simplify the Estimating Process

Over the years of operating my business, one of the biggest thorns in my side has been estimating jobs. It feels like a delicate dance between two people on completely different ends of the spectrum. As an owner, I’d like to see a million-dollar bill and, as a paying customer, they want to see the job done for free. Finding a middle ground where the customer feels like they’re paying for and receiving a good value, and you feel like your skills and experience are receiving fair compensation is tough.

I’ve created tiered levels of service as a base guideline for a customer to choose what they’ll be receiving. We have four distinct levels a job will fit into. The lowest price tag is entry-level and stock-replacement-style interiors. This level of service will include base lines of materials that typically fall into the $20–25-a-yard range and steer clear of any upper-level craftsmanship or custom design. We do charge a minimum of $3,500 and this level of service won’t exceed $5,500.

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Editor’s Corner: Builders Discuss State of the Industry at Restoration Roundtable

Builders from all over the country gathered to "talk shop."

Builders from all over the country met up at this year’s Restoration Roundtable at the Hotrod & Restoration Trade Show to discuss what’s happening in their shops and share best practices.

One of the perks of attending the Hotrod & Restoration Trade Show is having the opportunity to meet and talk shop with other builders from around the country, and the roundtable was perhaps one of the best example of this. Over 25 builders, restorers and shop owners joined HRR’s Managing Editor Devlin Smith and I to discuss important business topics, ask each other questions and get advice on how to handle issues that come up at their shops. If you weren’t able to attend this year’s Restoration Roundtable, be sure to put it on your schedule for the 2013 show! Each year it continues to grow in size and seems to really help those that attend.

State of the Industry

At last year’s Restoration Roundtable, it seemed that most shop owners were struggling to get customers in the door. While the builders at this year’s roundtable said that things have dramatically improved since last year, the struggles they’ve had recently aren’t getting customers in the door, it’s getting those customers to spend money. According to many of the builders, the down economy is making the clients expect to get a lot more for the money they are spending.

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Pricing to Increase Profitability for Your Shop

By Harry Weimann

Setting your prices in a trim shop isn’t much different than in any other industry. There are several factors that can affect pricing such as location, competition and the clientele. You must examine the prices of your products, materials and labor, and remember that pricing is a very important aspect of the success of your business. It’s also important that you have an accurate idea of the various costs that are involved in the daily operation of your business, including rent, utilities, taxes and employee wages.

If you have a great reputation and customer following, then customers are more willing to pay a premium for your services. If you price yourself right, it can allow your business to prosper. Incorrect pricing, however, can have an adverse effect and cause customers to look at other options. Here are some ways to price your services correctly.

As I mentioned before, knowing the cost of your day-to-day operations is very important. Once you understand the cost of keeping the doors open, you can add other factors such as the shop’s location and how it can affect what you charge.

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Restorer Profile: How One Shop Owner Kept His Business Going Through Hard Times

Like so many business owners, Bob Alford (above, center) faced some tough choices as the economy slid downward.

“I did have to drop some labor because the amount of work slowed down so I didn’t have enough work,” the owner of Pro Street Customs in Orlando, Florida, said. “At one point [I] had five full-time employees, plus myself, and a couple of part-time guys, but when the economy went into the tank, I had to lay off three guys because I didn’t have enough work to keep them busy.”

Alford also found other places to reduce his expenses and keep his shop going.

“My landlord adjusted my rent for a while just so that I could keep my doors open,” he said. “I didn’t have to close my doors because I did work with my landlord. He was really accommodating for me, so I just kept going and made it through the slow time.”

Though his workload had diminished, Alford was able to bring in enough work to get him, and the employees he had remaining, through the rough times.

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Three Ways to Get Customers to Pay More

Are your customers willing to pay more for a product or service at your shop? Entrepreneur contributors Dan Kennedy and Jason Marrs think they are, if given sufficient motivation.

“[The] association between your product and the price you’ve assigned it most likely is not fixed in your consumers’ minds the way it might be in yours,” the pair wrote in a recent article. “Business owners can and should think creatively when it comes to pricing their products and experiment with various price points that are different from what they initially think they can charge.”

Kennedy and Marrs offered three suggestions to small business owners who would like to charge more for their products and services.

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How to Increase Prices Without Angering Customers

Bruce D. Sanders, consulting psychologist with Vacaville, California-based RIMtailing, offered retailers advice on how to raise prices without alienating customers in a recent Bloomberg BusinessWeek article.

“These days, most customers are especially sensitive to any increase in price for the items they regularly buy,” Sanders wrote. “Sometimes customers accept a price hike and move on, but in other cases they get upset. According to researchers at the University of Arizona, Arizona State University, and University of Pennsylvania, the root cause of their anger is a desire—conscious or subconscious—to punish the business owner. How else to explain a shopper leaving behind a full cart and walking out the door?”

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Expert Offers 10 Tips to Better Pricing

Pricing expert and author of the book “The 1% Windfall: How Successful Companies Use Price to Profit and Grow,” Rafi Mohammed, Ph.D, has written a new article to help small businesses to start generating new profit.

“Pricing is one of the most powerful – yet underutilized – strategies available to businesses,” Mohammed writes. “McKinsey & Co. study of the Global 1200 found that if companies increased prices by just 1 percent, and demand remained constant, on average operating profits would increase by 1 percent. Using a 1-percent increase in price, some companies would see even more growth in percentage of profit. Just as important, price is a key attribute that consumers consider before making a purchase.”

In his article, Mohammed offered business owners 10 pricing tips that can help them reap higher profits.

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New Law Lets Retailers Set Minimum Amounts for Credit Card Purchases

The Dodd-Frank Wall Street Reform and Consumer Protection Act allows retailers and other businesses to require up to a $10 minimum for credit-card purchases, the Boston Herald is reporting. The new law doesn’t apply to debit-card purchases.

Credit-card networks such as Visa and MasterCard used to prohibit businesses from setting minimums, but the financial reform law passed in July now prevents them from including such terms in their merchant agreements. It also gives the Federal Reserve Board the power to raise the minimum beyond $10, the paper reports.

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