Customer Price Resistance - an Increase?

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Grahame Case

Customer Price Resistance - an Increase?

Post by Grahame Case »

have any of the other members of the forum noticed an increase in customers being a bit taken aback at how much quality wood moulding is costing?

it could of course be we are trying to charge too much - but we are experiencing a lot of people questioning the cost of wood mouldings compared to a few years back.

is this a trend that is repeating elsewhere
stcstc

Re: Customer Price Resistance - an Increase?

Post by stcstc »

i Think the way to deal with this is a 3 part thing

Look at you costings, make sure your not just grabbing as much as possible, make sure you price for YOUR market. I know i dont mark up as much as other people do on mouldings, but still aim to make a gross overall around 70%

use price conditioning when discussing and designing the frame with the client, ie get them used to seeing the prices before you even give them it. for example as you keying stuff into est, make sure the customer can see the prices etc that way they wont get a big shock at the total, as they have already seen some of the prices

Make sure your market is right - if your trying to sell top end high value frames to a market which is expecting middle of the road, then maybe that product isnt suitable for your market?
Graysalchemy

Re: Customer Price Resistance - an Increase?

Post by Graysalchemy »

I think STC is right, have you increased your price above and beyond what your market is prepared to pay, perhaps you have done this because your overheads have gone up more than usual. I don't think wood moulding prices have gone up to much compared to glass and backing board.

Perhaps you should look at ways of making savings on material costs and increasing profitability that way. I have managed to increase profitability by getting better terms out of suppliers I now buy mountboard glass and backing all by the palette load and make significant savings, I realise that this obviously isn't possible for most high street framers but you may be able to strike a deal by agreeing to by a quantity of glass and backing over a number of months. I also give 90% of my moulding to one supplier which in return I get a significant discount.

The general public are being hit hard with this recession and people are still raining in their spending. Perhaps your market has just reached a tipping point and they can no longer afford the quality product which they would have bought 6 months ago.

There are a lot of good quality mouldings at reasonable prices if you look. I have a core of mouldings I use for originals and prints which are sold onto top end independent galleries, they look the part but aren't big money. Again buying in quantity helps.
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JohnMcafee
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Re: Customer Price Resistance - an Increase?

Post by JohnMcafee »

We have also noticed this lately, Grahame.

And there has been a massive increase in the number of folk coming in for a quote, often without the image to be framed, its dimensions, or any idea what they actually want.
"A little learning is a dangerous thing"

(Also known as John, the current forum administrator)
markw

Re: Customer Price Resistance - an Increase?

Post by markw »

I have changed the way I sell to those cost conscious customers and have recently added significantly to the range of readymade frames I stock. I had noticed an increase in customers walking away from a quote - as well as customers with a number of pieces to be framed cutting the order short when they reached their price limit. Offering some cheaper options seems to have stemmed that problem - Ime still making a good profit - and at times seeing a better return than If I had framed the work.

I think one relevant observation I would make and that is many of my competitors have closed so I am getting a better flow of customers. My knowledge of that competition is that they were all underselling themselves and despite hard times - now is not the time to lose confidence in pricing.
Graysalchemy

Re: Customer Price Resistance - an Increase?

Post by Graysalchemy »

markw wrote: My knowledge of that competition is that they were all underselling themselves and despite hard times - now is not the time to lose confidence in pricing.
That is true but we have all had to re evaluate the market place. As I pointed out before there are two sides to making a profit it's not just about what you sell something for but what it costs to make and if you can reduce that you can remain profitable as well as being affordable for the customer.

If you don't understand your market place then you are at a disadvantage. And what you offer and at what price are probably most important in that respect. Some people will probably feel uncomfortable offering readymade frames but its better to sell readymades than nothing at all just for the sake of your pride. These still are desperate times.
stcstc

Re: Customer Price Resistance - an Increase?

Post by stcstc »

actually the cost of materials in most jobs is a small part of the overall price


so where the biggest savings are is in labour. working smart and quickly is when your profit can go through the roof in terms of percentage

even by investing in equipment to make you quick etc you make huge savings over time

well with in reason anyway
markw

Re: Customer Price Resistance - an Increase?

Post by markw »

Is that why I spend so much money on equipment?
Graysalchemy

Re: Customer Price Resistance - an Increase?

Post by Graysalchemy »

Are you my Irish Doppleganger STC. Speeding up the process is what commercial framing is all about and hence making more money so bigger faster machinery is what you need. However I still think cutting material costs is the way forward too.

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Re: Customer Price Resistance - an Increase?

Post by Not your average framer »

I target myself towards the better end of the market and always aim to provide the best quality of workmanship to all of my customers, including the cheapskates.

If they are looking to spend money, but have a limited budget. I will still try and work with them to come up with something they will like at a price they can afford. I've learnt how to work a lot smarter during this recession and find I can clinch a higher percentage of framing orders than I used to before the recession.

You only have to know when to adapt a little to win the orders!
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