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Effective Pricing Strategies for Signage Businesses

Pricing signage effectively requires a balance between competitiveness and profitability. Craig Brown, Chairman of the BSGA, shares essential insights to help your business price strategically, avoid common mistakes, and maximize profits.

 

Understanding the Client's Budget

Determining your client's budget upfront is crucial—even if they initially hesitate to share it. Early budget discussions help tailor the solutions and materials to what the client can realistically afford, avoiding costly over-engineering.

Key Actions:

  • Ask detailed questions to clarify budget expectations.

  • Use initial briefs to guide pricing decisions.

Managing the Supply Chain

Material availability and costs fluctuate regularly, impacting pricing significantly. Strong relationships with reliable suppliers can help navigate these changes effectively.

Key Actions:

  • Maintain close supplier relationships for better stock management and pricing.

  • Confirm material availability and lead times before finalizing quotes.

  • Be open to material substitutes that offer cost and availability advantages.

Avoiding Fixed-Price Pitfalls

Fixed-price quotes can erode profitability in volatile markets. Incorporating validity periods into your quotes protects your margins from sudden cost increases.

Key Actions:

  • Clearly state a quote validity period (e.g., 30 days).

  • Regularly review and adjust pricing structures based on market trends.

Preventing Common Pricing Errors

Small mistakes can significantly impact profitability. Common pitfalls include:

  • Rounding prices down excessively.

  • Forgetting to price double-sided signage correctly.

  • Underestimating installation times and unforeseen site issues.

Key Actions:

  • Always double-check pricing calculations.

  • Clearly price all sign components, including double-sided signage.

  • Build contingency time into installation estimates.

Timing Your Quote Strategically

The timing of your quote submission can influence client decisions. Being the second or third quote submitted allows you the chance to discuss competitors' offers and position your proposal more effectively.

Key Actions:

  • Avoid rushing to submit quotes first.

  • Engage the client in discussions after they've received initial quotes.

  • Follow up proactively to clarify your quote and showcase your expertise.

Pricing as a Sales Tool

Effective pricing goes beyond numbers—it involves relationship building and demonstrating value. Engage clients with your expertise to ensure decisions aren't based solely on cost.

Key Actions:

  • Clearly explain your recommendations and the value they provide.

  • Position yourself as a knowledgeable expert rather than just a vendor.

Summary: Essential Pricing Best Practices

  • Clarify budgets early.

  • Manage supplier relationships proactively.

  • Include clear quote validity periods.

  • Avoid common pricing errors with diligent checks.

  • Time your quotes strategically for competitive advantage.

  • Use pricing as a relationship-building and sales tool.

 

Guest Contributor: Craig Brown - Chairman of the BSGA (British Sign & Graphics Association)