How Do You Find Out What Your Area Competitors Are Charging?

[player]

I really need to get a handle on the local market pricing. How do you find out? I don't want to start calling myself and pretend to be a customer. Should I hire someone to do that for me?

How do you learn what the shops around the area are charging for 4' x 8's, logo designs, magnets, sandwich boards etc...

Thanks

 

[Gino]

If you're afraid to call them or go into their shops, then what does it matter what they charge ??

You hafta charge according to what you need to keep your doors open, not what they need. Wa-a-a-ay too many variables when you need their input.

How many competitors are nearby you ?? In our city alone, there are about 130 shops. I could care less what the majority of them get, as most of them don't know what they're doing anyway. There are a few serious competitors in our area and listening to people and whatnot, we have a pretty good handle of what price range they're in for most things.

 

[Bly]

Sure you need to set your own pricing but you do need to know what they charge.
Get your wife or a friend to get some quotes from them.

 

[Dan360]

We don't really know about the little stuff. But we have a good relationship with a lot of large clients in our area, so on the bigger jobs that they're required to get multiple quotes for, they will often tell us.

 

[AKwrapguy]

I really need to get a handle on the local market pricing. How do you find out? I don't want to start calling myself and pretend to be a customer. Should I hire someone to do that for me?

How do you learn what the shops around the area are charging for 4' x 8's, logo designs, magnets, sandwich boards etc...

Thanks

Just call them and ask.

 

[2B]

you can try "ghosting" and/or have random people call

 

[Texas_Signmaker]

Uuuhhhhh, just call them??? Use your wife (or husbands, or partner or whatever) cell phone and ask them. Get your friends to call and ask about different sized signs.

Every now and then I call around and ask because I like to know where everyone is at, but my pricing is based on "dynamic demand". The busier I get the higher my prices are. If I start getting a handle on things I lower the "surge" pricing back down and start getting more jobs. Luckily I've been at the higher end for most of this year.

 

[equippaint]

Are you going shop them for every single product that they could possibly make? You can't extrapolate pricing across the board based on a couple items. They're probably using a dart board just like many others are. It also wont tell you what they charge in quantity and if pricing reflects future business potential.
In addition to that, what do you plan to do with the data if you were able to get it? Pricing, within reason, isn't at the top of the priority list of any good customer.
If you're trying to make sure that you are not whoring the market, go around and meet some sign shop owners and build a relationship. Also ask your regular customers as was suggested above.

 

[equippaint]

Sure you need to set your own pricing but you do need to know what they charge.
Get your wife or a friend to get some quotes from them.

We used to call for equipment rental prices to our competition and my boss would jump all over me because what he was quoted calling in was way higher than what I could get in the field. It wasn't that I was too cheap, it was being blown off for being a 1 off customer that nobody knew and they did not have time for it.

 

[James Burke]

You hafta charge according to what you need to keep your doors open, not what they need. Wa-a-a-ay too many variables when you need their input.

Ding, ding, ding, ding....I think we have a winner...

 

[SightLine]

If you are a new at this or trying to create a business plan to get into this then yeah, you will need to get an idea of what the area pricing is. Aside from that if you have been doing this for more than a few years, at least us, I really dont care. We charge what we need to and what we feel our services are worth. Of course we are within what the market here will bear as well. I know for certain though, we are far from the cheapest. I will tell a potential customer right up front, if price is your bottom line and only objective then we are probably not the best shop for you. Its really a matter of educating and feeling a customer out though. Someone new has no idea on the different types and qualities of different materials or what a massive impact a shop with a lot of experience versus little can have on both their design and installation, they have no idea that the place down the road that is 25% cheaper is using a cheap calendared vinyl and you are using a premium name brand cast that will both last and also remove cleanly a few years down the road. That cheap shop is not going to tell them they are selling them crap either....

As others have mentioned, with larger clients they are often getting multiple quotes and if you are doing your job in selling them not just on price but on YOUR company, they will very often open up and either show you or tell you what other places have quoted. If its way cheap then you use your skills to educate them and sell them on why they should pay more at your business.

 

[equippaint]

You hafta charge according to what you need to keep your doors open, not what they need. Wa-a-a-ay too many variables when you need their input.

In theory sure but this is what has caused pricing to drop. Owner operators with no workers comp or liability insurance and people working from their houses. If I go and buy a 1975 crane and decide to deal with the issues that come with it, I should reap the financial rewards and not my customers, the hourly rate should be the same as if I went and bought brand new. In the rental business, you charge a rate based on new replacement cost no matter if its 10 years old or brand new. People with low overhead should and can charge the same as the guy with 20k sq feet and 20 employees. I think that this is the question at hand and not so much as it's how cheap can I get.

 

[TimToad]

The only real purpose I can see in doing very much research into your competitor's pricing is to try and undermine the established market and ignore your own overhead requirements and needs. Both are counterproductive to yours and everyone else's long term sustainability. Pursue that avenue at your own risk.

So what if you've done a good job determining your overhead and have set an hourly rate that fulfills YOUR company's financial needs, but you find out the local competition is doing everything at 25% less than you are?

What are you going to do about it? Call them out? Complain to them?

Maybe they inherited the business and the building and have much lower overhead costs or just don't care about losing money because they are loaded. Or they are really good and efficient and have found a way to build a better mousetrap than you and the others in the area.

If you've been in your business and local market for any length of time, you should be able to see enough examples of when the others got jobs you that didn't and assume it was based on price unless there was some disqualifying factor like a poor interaction, the customer went elsewhere because you were too busy at the time or have long running relationships with the client.

We also put don't give much credence to those unscrupulous customers who share information on pricing they receive from other vendors. If someone has so little respect for the concept of keeping what they collect from competing vendors from each other, who knows if they wouldn't exaggerate the amount to see if you'll go even lower.

 

[TimToad]

Uuuhhhhh, just call them??? Use your wife (or husbands, or partner or whatever) cell phone and ask them. Get your friends to call and ask about different sized signs.

Every now and then I call around and ask because I like to know where everyone is at, but my pricing is based on "dynamic demand". The busier I get the higher my prices are. If I start getting a handle on things I lower the "surge" pricing back down and start getting more jobs. Luckily I've been at the higher end for most of this year.

Is that the UBER method?

 

[equippaint]

The only real purpose I can see in doing very much research into your competitor's pricing is to try and undermine the established market and ignore your own overhead requirements and needs. Both are counterproductive to yours and everyone else's long term sustainability. Pursue that avenue at your own risk.

So what if you've done a good job determining your overhead and have set an hourly rate that fulfills YOUR company's financial needs, but you find out the local competition is doing everything at 25% less than you are?

What are you going to do about it? Call them out? Complain to them?

Maybe they inherited the business and the building and have much lower overhead costs or just don't care about losing money because they are loaded. Or they are really good and efficient and have found a way to build a better mousetrap than you and the others in the area.

If you've been in your business and local market for any length of time, you should be able to see enough examples of when the others got jobs you that didn't and assume it was based on price unless there was some disqualifying factor like a poor interaction, the customer went elsewhere because you were too busy at the time or have long running relationships with the client.

We also put don't give much credence to those unscrupulous customers who share information on pricing they receive from other vendors. If someone has so little respect for the concept of keeping what they collect from competing vendors from each other, who knows if they wouldn't exaggerate the amount to see if you'll go even lower.

I personally ask because I don't want to be the market whore. My overhead including my salary is covered in our painting business. If I back out current revenue and assume that I only do signs then each 4x8 will be $2000 which is about as stupid as calculating OH from working in my basement.
As far as customers disclosing pricing, it is for the same reason and there is nothing unscrupulous. Not everyone is out to get a deal. I have more that will tell me when I am low vs when I am expensive which in my mind is out of respect. We're all in the same game including our customers and most of them understand.

 

[Texas_Signmaker]

Is that the UBER method?

Uber does it, airlines do it, gas stations, hotels, movie theaters, apartments...lots of industries do it. If people are demanding more service then I can provide, then I give myself a raise. If I start to slow down then I lower the prices to win more bids.

I think most of you have charged a "rush" fee before...that's a basic and simple example of dynamic demand pricing.

https://en.wikipedia.org/wiki/Dynamic_pricing

 

[player]

For those that think it is best to only worry about what they will charge and ignore the current market, I disagree. Everything is down to price price price these days, so if I want to compete, I need to know what the market is currently bearing, and charging. It is very important IMO that I know about my competitors' current price structures. If not, I will learn about it when my business dries up, then I will be reacting to a sudden loss of orders, that could take months to climb out of... If everyone else is quoting lower grade materials and cheap cheap prices, with no art charges, then it is going to be a tough go if I quote the best materials with art charges. I need to know this. I am not saying I should work for free, or whatever, but I should have a product that is comparable or else not bother quoting, or have a strategy that deals with what is going on. To put my head in the sand about the market is not smart IMO.

The other side of this is I also do not want to be way lower than everyone else, leaving money on the table.

 

[CanuckSigns]

Uber does it, airlines do it, gas stations, hotels, movie theaters, apartments...lots of industries do it. If people are demanding more service then I can provide, then I give myself a raise. If I start to slow down then I lower the prices to win more bids.

I think most of you have charged a "rush" fee before...that's a basic and simple example of dynamic demand pricing.

https://en.wikipedia.org/wiki/Dynamic_pricing

How do you handle a repeat order 6 months later when they originally got the lower price, but now need another identical sign next week and you're swamped? It's hard to come out of that without looking slimy.

I prefer to keep pricing consistent and be honest about lead times, most people understand we are a family business and work comes in waves, sometimes you sink and sometimes you swim. I feel better giving the client a consistent price and telling them it's going to take a couple weeks longer than usual.

 

[player]

What do you ask your competition when calling to check prices?

 

[Texas_Signmaker]

How do you handle a repeat order 6 months later when they originally got the lower price, but now need another identical sign next week and you're swamped? It's hard to come out of that without looking slimy.

I prefer to keep pricing consistent and be honest about lead times, most people understand we are a family business and work comes in waves, sometimes you sink and sometimes you swim. I feel better giving the client a consistent price and telling them it's going to take a couple weeks longer than usual.

What do you do when you regular client doesn't want to wait a couple of weeks and they call around and find someone that can do it sooner? I get these type of calls from clients that (used) to use my local competitors that are running 2-3 weeks on simple signs... all the while I'm charging more then them and making the customer happy... Win-win.

So anytime someone needs to raise a price it's slimy? No one likes paying more but it's a fact of life that stuff increases in cost... a fact most people understand.


I have 2 BIG repeat customers that order sometimes weekly and I am SLOWER at raising their price... but if I can't control the amount of work coming in and the big customers keep hitting me up then eventually they go up too... those two I deal with on a separate basis.