Sketch Deposits

Post by **Mike Jackson** » Mon Dec 29, 2008 3:53 pm

erikwinkler
By the way Mike,

This christmas i asked for almost all the signcraft magazines.
The last few days and nights i am reading all the years, now i am at nov 1989.
It is funny to read about the rise of the computer added signs in retrospect.
Did you know that in these years we only had the Gerber systems in europe?
And finally I understand some of the posts here on the forum better, because now I know what you refer to.
For instance your reply on the fact that I make designs for my potential customers, without a downpayment etc.
Still in our circumstances it is a well over-thought policie with certain clients... they are regulars, no price-fighter-seekers and all i send is in pdf password protected AND we have an unlimited lawyer insurance....
But like you mentioned in the article: sewing is not a real nice thing that you want to prevent whenever as possible.
Still a few years to go and read. Hope to find some how to's about gilding, blasting, routing, painting....

Erik wrote this in another post, but I thought it would be better if it was discussed in it's own thread.

I've written articles in SignCraft for over 25 years. I don't know how many people actually read them, but I write them anyway. None are ever intended on being THE way to do something, but are offered as suggestions on how we do them and adjusted for quite a few years of dealing with the trade.

The question here is whether to try to charge for sketches. But actually, the question is whether to do speculative sketches for jobs you may never get. All you have to do is give pricing (or a range of pricing) based on the supplied information and agree on a final price (or price range), get a deposit, and then do the sketch or sketches. It isn't so much that you charge for the sketch, but you don't do any work until you have the job locked down. The sketches become part of the total selling price.

In most cases, it is only a matter of changing a few things you say and the order in which you say them. I wouldn't say, "Let me work up some sketches for you and fax or email them over". I would say, "Based on what you are telling me, the sign could cost $400 for a basic sign, $600 or so for something with a little pizzaz, and $1000 if we do some custom artwork and add extra effects. Do you have an idea which one would work for you?"...."Okay, we'll agree to work on something in the $750 range. We'll begin the sketches and watch for your deposit".

In the first example, you are working on your nickel for something they may never buy and mabye even for a business that will never open. In the latter, you are already on the job, and you know the client is serious about the project if they agree to send the deposit. We've had people tell us they can't give us a deposit because they don't have any funds. They are hoping the bank will give them a business loan, but without forcing their hand, they would have never told you about it. You can design away for a ghost business.

Okay, with all that said, we do a lot of work for our regular clients in which we don't get advances or go through all the hassles. We just agree on the price, do an approval sketch, and get paid in full when they pick up the sign. However, if they ever burn us by bidding our sketch design, that relationship goes back to basics and I would never do another up front sketch.

Others here may have their own little speeches and business practices related to this topic. They are welcome to add them to this thread.

You can also turn the free sketches around on other shops. "Listen, if that company is doing free sketches for you, then they do them all year long for everyone. That means they blow a lot of time weekly, montly, and yearly on jobs they don't get, and if you buy from them, you are absorbing a percentage of all those unbilled hours".

M. Jackson

erik winkler · Post by **erik winkler** » Mon Dec 29, 2008 4:27 pm

Mike,
I want to ad here that we sometimes get a design clearly made in Gerber Omega software.
They have the design made by a fellow signmaker and they want to ask me for what price I can do it.
Standard I write a polite, but aggresive letter with some of the following words: "Clearly a competitive colegue made this design and has put his designing time (and in Mike's words: "years of designing experience, training and research compressed in just one design") in it. I think it is rude and a lack of manners to go and shop around with his or her design. Therefore I do not want you as a client".
I know not everybody does this, but if we all would, we could re-edducate some of these people.

Ofcourse we can prevent this by every signmaker not sending a design prior of being paid. And therefore re-educate our selfs like Mike propossed in his articles. But how many times do we get a person who sells gabbages on the market or makes the plumming in toilets and really does not know what I ma talking about if I mention "the basic, the pizzaz or the custom version"?
Thank god (or just myself) I had put some time in our website and refer to the subcategorie cars under fleetmarking and show him live through the telephone the different designs we made and how much these specific customers have paid.
I am too really interested in how others deal with these 'problems'...

Post by **Mike Jackson** » Mon Dec 29, 2008 4:44 pm

Erik,
I would probably adjust my comments to the customer supplying the Omega artwork.

I'd probably say, "I'd really like to do this project, and I can probably improve a bit on the design you are supplying, but it looks like this design is coming from some sort of sign shop or agency. Before I can use this design, I need you confirm in writing that you paid for the artwork and have full legal rights to use it. Otherwise, I might be brought into some sort of legal battle over the use of the image or design".

Instead of burning a bridge and losing a potential client, you are forcing them to pay the other person, or are forced to take the legal burden if it ever came to that. More than likely, they'd then ask you to go ahead and do a better design, and that would trigger all the other lingo discussed above. If they refuse to agree on a price and give a deposit, then it is time to let them walk to the next sign shop.

You don't want to offend them and you want to give them the vehicle to do the right thing. They "could" turn out to be a good client once they understand the issue of sketches and the time it takes to do them.

erik winkler · Post by **erik winkler** » Mon Dec 29, 2008 4:56 pm

Mike,

That really sounds great! I will use that.
Seemingly turned around into win-win situation.
Except for the other signmaker who lost his design and potential job if the custome does not pay him.
And a bad feeling in my stumaque, because I lied to him when I said " I would really like to work for him".
I try to live and work in a good way: "Do not to others what you would not want have them do to you".
Sometimes the heart is on the tonque instead of tact.

Anyway I must not forget we are in business for a living.
So I will definitly use your phrase!

Doug Bernhardt · Post by **Doug Bernhardt** » Mon Dec 29, 2008 6:18 pm

Just excellent comments and Mike, it may surprise you but I read everything in all the trade mags....well almost. I don't intent to distract from what has been said but with me it goes something like......I need some sort of sketch to give a quote. The clients I find on my door don't seem to be price shoppers as they as easy to "souse out" and I sort of Pre-Qualify them over the phone on the first conversation. From there I'll make a thumbnail to price and as often as not use that as a sales tool. It all helps when I have an example that shows where we go from the sketch and I'll show something like

as opposed to where it ends up

so far I rarely do any artwork (as shown) without seeing the actually job and if they wish to take a copy of it I make it clear there is a bill at the end if they decide to go elsewhere. As of yet this hasn't occurred. I'm not so sure how things work at other shops but this is my experience to date.

Post by **Mike Jackson** » Mon Dec 29, 2008 11:29 pm

Hi Doug,
Nice sign! This topic won't have a "one size fits all" envelope. A few people will have a strong following of clientelle familiar with their work and they will have a good idea up front of what it might cost to have a sign project made by them. You mentioned you usually "pre-qualify" them, which I assume means you let them know up front that one of your signs will be several thousand dollars. If you get a good feeling about them and the are still interested after knowing the sign will not have a "bargain shopper" price tag, then it falls into a realm of your good instincts and whether you trust them. As you also mentioned, you explain that your sketches are not free, and that you expect to be paid for the design if someone else uses them. So, the way I see it, you only risk preparing an unpaid sketch if the customer seems sincere, then decides not to do the sign project at all, or decides to use someone else using their design.

In your case, you wouldn't be generating that many thumbnail project signs a year on spec. My articles are usually written for the wider spectrum of magazine readers that may be asked to do hundreds (five or six a day) of sketches yearly. "Do me a sketch for my truck doors. Do me a sketch for the 2'x4' real estate project sign. Do me a sketch for my pair of magnetic signs." You get the picture. Even the simple sketches of this nature take time and add up over the course of the year.

While not always the case, the original design or layout is a big chunk of the value of a sign project. For a shopping client, getting years of sign experience handed to them for free is a great find if they can find one willing to give it to them. In reality, a good sign designer/salesperson/fabricator probably shouldn't give away the farm until people pay to get the expertise. A good portfolio and samples should give the potential client the necessary information to trust what they might expect to get, but I always suggested no more than a very rough thumbnail up front only if it appears you are already in line to get the actual project.

Raymond Chapman · Post by **Raymond Chapman** » Tue Dec 30, 2008 9:43 am

Mike Jackson writes articles?

Post by **Mike Jackson** » Tue Dec 30, 2008 11:04 am

Once in a while, you hear a person complaining about someone stealing their sketch. They are mad as a hornet.

I look at the situation as an outsider and suggest they shouldn't blame the customer or the other sign shop. The problem, in my opinion, lies with the person complaining. Even if they DID do a sketch up front without a deposit or sketch fee, they apparently lacked any kind of up front communications with the client letting them know the sketch is their property until they buy it or the sign project. All they would have to do is say they need $100 for the design if someone else uses it or does a sign that looks like it before letting it walk out the door. That number would vary from shop to shop and according to the amount of time put into it of course.

For most small shops, you just don't NEED to do the free up-front sketches to get the jobs. As explained in the posts above, it only takes a little honing of the selling skills to get a customer to agree on a price range based on some general parameters and get the job before you do the sketches. Whether you get a deposit isn't as important as achieving at least a verbal contract that you have the job for that amount. Then proceed. Doing it this way, it is less likely to have the design stolen and used by another company.

I haven't been around that market in a long time, but some of the large sign manufacturers routinely do elaborate concept sketches and presentations...something like the signs in Vegas. Those companies have a design staff that makes the elaborate colorized sketches used to try to land the sales of sign contracts in the hundreds of thousands or millions of dollars. The sign designers are built into their ovehead just like janitors. It is a part of doing business with that kind of clientelle. In other cases, the customer hires a design firm to develop the sign package, then the sign package is bid out to a group of qualified sign companied.

Everyone here will have developed a business policy that seems to work for them in their own situations. In the end, people find a comfortable spot where they can handle the pain when they take certain risks.

Aaron Taylor · Post by **Aaron Taylor** » Tue Dec 30, 2008 5:07 pm

Thank for all the great advise in the sketch and deposit area. Well noted in my small brain, and can't wait to use the "Listen, if that company is doing free sketches for you, then they do them all year long for everyone. That means they blow a lot of time weekly, montly, and yearly on jobs they don't get, and if you buy from them, you are absorbing a percentage of all those unbilled hours"

nice!

Doug Bernhardt · Post by **Doug Bernhardt** » Tue Dec 30, 2008 5:10 pm

Hi again Goldie, I was just throwing in my experience and while reading the post I was wondering how I would deal with this if mine were a regular shop. I'll bet there are the BIG shops that work these things on spec but Mark Oatis would know that better. I will stick this in though, while "shooting the breeze" with him some years ago he mentioned that he nearly lost a big job because his "sketch deposit" was too small. Go figger!! Also to add is that very occasionally I get queries from prospective clients that have delt with other shops before winding up on my door and I try to be as diplomatic as possible and never never critize anothers work.

Post by **Mike Jackson** » Tue Dec 30, 2008 7:10 pm

While on this subject, I wrote an article on "Three Tier Pricing" for SignCraft. It is available for download at SignCraft's site at this address: http://www.signcraft.com/Jackson96.pdf

It more or less dovetails this topic of sketches.

In a conversation with a customer, you can almost always get them to give you a budget if you supply them with three quick prices. The quick prices are based on similar projects you might have already done and are generally zones of prices, vs specifics. You can ask right off if they are shopping for the cheapest sign they can get?....or a sign with the most bang for the buck?....or a high impact sign designed to create a memorable impression? Then you can throw out ballpark figures like $200, $500, and $1000. When given the choices, they will almost always come up with a number and you can almost always snag the job right then and there. When given choices, some customers will surprise you and take the top price and you get a chance to produce a portfolio sign. Others might throw out a price in between two of the price ranges...such as "What can you do for $800?" You can always be a little vague on what you can do at that moment, but tell them you will design some sort of project to target that price.

So again, most of the sales technique is "what to say and when to say it". You have to learn to lead them towards a sale that meets their needs and their budget. Once the two parties establish the budget, you pretty much have the job, but the sketch is the secondary leg of the sale. If they choose the cheapest sign, you deliver exactly what they bought--no more, no less. On all three versions, you maintain your shop rate and resist the urge to overwork the project based on the price they pay.

Doug Bernhardt · Post by **Doug Bernhardt** » Tue Dec 30, 2008 8:52 pm

Yes....the 3 prices. I guess I never got to say Thanx!! for that idea and use it all the/every time. That goes with pre-qualifying the client. I say something like "your sign at this level will cost such and such, your sign like this will cost this, and there is this(whatever that might be) available somewhere in the middle. Usually foam letters on plywood. It must be good to know there are ppl that read everything in the mags. Tom McIlltrot nearly fell off his chair when I told him I read his editorials. Also I'm contributing mainly 'cause this topic is SO important and not in any way to better or/distinguish myself from others in this group.....and I admit because this posting of photos is so much fun now that I have the hang of it.

Post by **Mike Jackson** » Tue Dec 30, 2008 9:53 pm

Doug,
You have a lot of great European sign photos. Now you know how to post on the site (it was never hard), feel free to start new threads and post all you feel you can.

So far, I have been doing most of the yakkiing in this thread. I'd love to hear other people's approaches and thoughts on the subject. I always like to hear lots of different points of views and techniques, then I adopt what seems to work best for me at the time.

Jerry Berg · Post by **Jerry Berg** » Wed Dec 31, 2008 7:45 am

I allways get a 50% deposit before supplying any layouts/sketches. I find out what thier budget is first. My customers know that a deposit is allways going to be required, they don't seem to have a problem with this.

Post by **Mike Jackson** » Wed Dec 31, 2008 12:05 pm

I don't think I mentioned it earlier, but we had a sign in the shop that said, "Due to the custom nature of our work, a 50% deposit is required on all projects. Balance due on completion". As Jerry just mentioned, getting the deposit is not a problem on a serious client.

I never had a problem starting the sketches without the deposit "in hand" as long as we agreed on the verbal contract. A lot of the times, I would write up the contract, do the sketch, and call them to come look at the design and pay the deposit. You can be flexible, but having a written policy on the wall will help on the bulk of the projects.