Design fees and payment upfront

[Rualsignmaker]

I have noticed when I explain we charge X amount (very reasonable price in my opinion) for a design fee for banners, signs, business cards ect. there is some resistance by some customers. In my opinion, that is a billable hour and I'm sure most of you agree. Also when dealing with new customers I expect payment upfront. We don't want to end up with no-shows. Another thing I'm sure most would agree with. How do you all deal with these issues of charging for designs and managing payments?

 

[Texas_Signmaker]

I know... if you push hard for some sort of payment upfront they just go elsewhere... maybe that is a good thing? Sometimes if the job is big enough and feel I have a good chance in getting it, I'll give them mockups to help get the sale. Sometimes I come up with a quick layout because it's a shot in the dark... then the customer loves it and wants to move forward and I feel like I'm producing a sub-par designed sign.

 

[binki]

First contact. Customer says "I want...." I get the details and then give a price. "We require 50% down, the balance at delivery, no checks for final payment" or, if it is a high risk job, "We require payment in advance, Cash or Credit card, no checks"

It is called 'Qualifying the Lead'. If they walk then they were not going to pay anyway.

Another way to look at it is customers that:

Always Pay: Come hell or high water, they will pay.
Will Pay: Slow but always get you the money at some point.
Never Pay: They will do everything to never pay you.

The first is golden, the second keeps the gravy coming in and the last is poisen.

 

[Gino]

My first question is..... what are handmade vInyl graphics ??

if this just has been happening for a few months per your words , my thought would be..... what am I doing wrong, not am I charging enough ??
Are my banners any good ??
Is my artwork worthy of charging extra for ??
Why wouldn't anyone come back, if you haven't charged them for anything ??

Comes to my mind...... either they don't like me, or they don't like what they see.
How is your shop set up ?? Does it have a comfortable feeling ?? Does it appear professional ?? Is it clean or cluttered up ?? Are there other projects taking place in which they can see your capabilities ?? Do you have competent looking employees or if it's just you..... are you good dealing with people ?? With all the things you don't seem to know how to do or collect, I'm betting on most of these not in your favor.

 

[Notarealsignguy]

First contact. Customer says "I want...." I get the details and then give a price. "We require 50% down, the balance at delivery, no checks for final payment" or, if it is a high risk job, "We require payment in advance, Cash or Credit card, no checks"

It is called 'Qualifying the Lead'. If they walk then they were not going to pay anyway.

Another way to look at it is customers that:

Always Pay: Come hell or high water, they will pay.
Will Pay: Slow but always get you the money at some point.
Never Pay: They will do everything to never pay you.

The first is golden, the second keeps the gravy coming in and the last is poisen.

No check but you'll take a credit card? That's about retarded. Probably dumber than not taking a check. You're a sign business, not a towing company.

 

[Bobby H]

It's very common for customers to feel insulted if they get hit with any design charges. They don't think sign designers are doing any real work.

Part of that attitude comes from all the bull$#!t depictions of computer use they see in movies and TV shows. Finger-rattle some gibberish into the keyboard and the project is done in a few seconds. Why should there be any service charge for that? They have very unrealistic ideas how much work has to go into certain kinds of artwork requests.

Another problem is the customers have little if any respect for what we do for a living. Artsy-fartsy stuff doesn't sound like work to them, we're just playing in our jobs all day. We ought to be happy doing our jobs for free, just for the honor of getting our work noticed.

Maybe those kinds of customers will throw in the old "my kid could make that in 5 minutes" cliche. Well, be my guest! Make you kid come up with your logo or artwork! Bluff called.

I have a list of free/cheap graphics applications customers can download or buy to try their hand at D-I-Y graphic design if they want to go that direction.

Our shop is pretty specific about what incurs additional design charges. Vehicle wraps require a design deposit up front. Pixel-to-vector re-creations of crappy JPEG logos or other pixel-based artwork is the most common design charge. We rarely do those conversions for free unless it's something fairly simple. It's a case by case judgment call. Customers will often send the first JPEG image they find of their logo. When we warn them a design fee could be involved for that vector conversion many of them send over clean, vector-based files not long after that.

If a modest project is pretty simple and doesn't require creating any new artwork elements from scratch we won't charge any design fees for it. A lot of existing, repeat customers fall into this category. We're not doing print shop related stuff like business cards. Profit margins can be very narrow on that kind of work, so any extra design work should be billed on small projects like that. On large projects, like a big lighted sign with a LED variable message display, we may throw in any additional design work for nothing because it's a big enough project.

 

[Notarealsignguy]

Roll the design time into the price of the sign and you won't have these problems. People do not like to feel like they're being nickeled and dimed and that does not mean they aren't willing to pay what something's worth. The deposit you get will cover the time to make the proof if they end up walking. It's like Sherwin Williams supply chain charge, its irritating. If you want to raise your prices 5% than do it, that doesn't seem to be as near as abrasive as a bunch of add on charges.

 

[James Burke]

Believe it or not, you're paying for a design charge when you buy a package of toilet paper (or any other product on a shelf). Those cute little bears don't get there for free. And besides that, who thinks of them once the dispenser has been filled?

But like Notarealsignguy says, design needs to be rolled into the final cost: Total Pricing (TP).


JB

 

[Bobby H]

Roll the design time into the price of the sign and you won't have these problems. People do not like to feel like they're being nickeled and dimed and that does not mean they aren't willing to pay what something's worth. The deposit you get will cover the time to make the proof if they end up walking.

Our company doesn't require any deposits (especially anything non-refundable) just to work up designs and/or bids for most kinds of projects. If the client has production ready logos, artwork or other assets that need no additional work we'll create sketches and bids without charging them anything extra at all in terms of design fees. But if we have to do a pixel-vector logo conversion just to come up with a bid they will get dinged for that. It's not our fault if their "designer" cooked up all their branding in Photoshop and saved them as JPEG images.

As I said earlier, working up vehicle wraps is an entirely different matter. We're willing to give customers a NOT-binding ballpark figure of what a wrap can cost. But if they demand to see sketches of a design before they buy, they're going to have to pony up a not-refundable deposit for that. If they want to screw around putting a designer through revision hell before any vinyl gets printed they're going to pay extra for that. Our design and production time is not at all free for other people to waste. Usually when a customer understands the meter is running, they're on a clock, they get a whole lot more decisive.

 

[simon haysom]

If its a reasonable size job $1000+ I do a quick knock up. (max of 30/45mins). Flick them a pdf (emphasis the fact it's just a concept, NOT finished art). make sure it's fully locked.
Worst case you loose 30/45mins of staff wages time. If your graphic person is any good they can generally wow them with this and you can claw back this cost/time from this point on.
I generally only do this if they have bothered to front up at my shop. Not just off the old interweb thingey. It of course go's without saying that they have given a reasonable brief.

 

[Gino]

Once you're at this business and have most of your costs already figured out, you can add them up in your head, write things down which go into the cost and have them included if the job is worth anything. So, a 3'×8' banner, ya already know your material and vinyl or ink costs, so just add in an extra $50 bucks for your setup time. While you're figuring in finishing costs add some more design design cost of another $50 bucks or so. Now, ya have your 3'×8' banner figured at $280 bucks and everything included.

When we do larger signs, the design time is ALWAYS discussed up front and included in the sign cost on a separate line item. That can be adjusted, as need be. Just as installation is added in separately.

 

[Johnny Best]

I just mix in the design fee with the work. Like Bobby H's company, I do not require a deposit. Its not that difficult to run a business if you are talented. This discussion has been gone over numerous times and it seems the people who have a chip on their shoulder about customers never seen to stay in business to long.

 

[bingo]

It's very common for customers to feel insulted if they get hit with any design charges. They don't think sign designers are doing any real work.

Part of that attitude comes from all the bull$#!t depictions of computer use they see in movies and TV shows. Finger-rattle some gibberish into the keyboard and the project is done in a few seconds. Why should there be any service charge for that? They have very unrealistic ideas how much work has to go into certain kinds of artwork requests.

Another problem is the customers have little if any respect for what we do for a living. Artsy-fartsy stuff doesn't sound like work to them, we're just playing in our jobs all day. We ought to be happy doing our jobs for free, just for the honor of getting our work noticed.

Maybe those kinds of customers will throw in the old "my kid could make that in 5 minutes" cliche. Well, be my guest! Make you kid come up with your logo or artwork! Bluff called.

I have a list of free/cheap graphics applications customers can download or buy to try their hand at D-I-Y graphic design if they want to go that direction.

Our shop is pretty specific about what incurs additional design charges. Vehicle wraps require a design deposit up front. Pixel-to-vector re-creations of crappy JPEG logos or other pixel-based artwork is the most common design charge. We rarely do those conversions for free unless it's something fairly simple. It's a case by case judgment call. Customers will often send the first JPEG image they find of their logo. When we warn them a design fee could be involved for that vector conversion many of them send over clean, vector-based files not long after that.

If a modest project is pretty simple and doesn't require creating any new artwork elements from scratch we won't charge any design fees for it. A lot of existing, repeat customers fall into this category. We're not doing print shop related stuff like business cards. Profit margins can be very narrow on that kind of work, so any extra design work should be billed on small projects like that. On large projects, like a big lighted sign with a LED variable message display, we may throw in any additional design work for nothing because it's a big enough project.

Add to this that many, now use apps like Canva. they send thumbnails via whatsapp and they imagine they have done all the work for us.
I charge 1. Minor edit, 2. Edit 3. Full edit 4. Design from scratch. I can only get away with 20/hour though which is nothing really.

 

[Bobby H]

Once you're at this business and have most of your costs already figured out, you can add them up in your head, write things down which go into the cost and have them included if the job is worth anything.

We've been able to do that in the past, but not now. Every other day we get emails from sign supply companies telling us about yet another price hike on yet another material. We have to call up and get current prices on everything so we don't wind up in the red on a bid.

 

[Gino]

The OP and myself were basically talking about a 3'×8' banner. Ya can't be off by more than 10 or 15 dollars. Is that gonna really affect things ??

 

[binki]

The OP and myself were basically talking about a 3'×8' banner. Ya can't be off by more than 10 or 15 dollars. Is that gonna really affect things ??

a Scent, or a few Bucks, Otherwise the High Balls are on you!

 

[Gino]

So, what did I miss there ?? This new fangled math is just hard for me to grasp.

 

[Stacey K]

One thing I've been doing lately is telling people that the price includes 30 minutes (or whatever) in the price of the banner, sign, etc. if it goes over then I bill at $XX per hour. I say that usually means I'll send you a couple options and that includes one revision. I always tell them to be as specific as possible and if they any ideas to write them down, take a screenshot, whatever to keep the design time down. You would be really surprised how much faster the process goes when they know their 57 changes or indecisiveness is going to cost them.

 

[phototec]

Got a question about the design fee, lest say you create a custom multi-color window graphic (30" x 36") design in Photoshop (lots of 3-D effects and textures) and it takes several hours to create and you only charge the customer $50 design fee for the one sign.

What if they ask you for a copy of the full-size artwork to take to another shop to use for additional signage, T-shirts, or used on a partial vehicle wrap, do you just give them the file or do you charge them some kind of release fee? Thanks

 

[rydods]

For us, most design time gets hidden in with the overall work like some have said. Logos and obvious hourly design time involved with a job will be a line item. If a customer comes in almost blatantly making the design process difficult, providing non-vector artwork, wanting their order right away but then being overly difficult during the design/setup process, It's definitely a line item and usually a large one in hopes they never do anything like this again.