On Customer Loyalty ... ?

[Bill Stearns]

Hey All -
While some profess to have gained a high degree of customer loyalty, others say there is no such thing! Wondering? - Has anyone yet tried developing a "loyalty building program" for their engraving business? - a "promotional way" of generating (ensuring) greater repeat business? May be that consumers 'n companies don't require "engraved products" frequently enough for a "be-back" reward program? My question: other than basics (great service, your prices, etc.) do you do anything "promotionally" to reward individual customers who shop with you? - to gain, even "lock-in", their loyalty? Anybody remember trading stamps? - S&H Green Stamps 'n Gold Bond Stamps? (I used to sell stamp programs for the Gold Bond Stamp Co. years 'go - thus my continuing interest in loyalty building programs.) Would like to create a "be-back reward program" for my own business - wondering if you've got thoughts, ideas 'n advice for me, as might pertain to the engraving business? (could be I'm spinning my wheels? - let me know.) :confused:

Thanks.
Bill

[David Somers]

Bill,


I obviously can't answer this as a laser business person. All I can give you is my perspective as a general customer.

The things that earn a company my loyalty has more to do with their employees. I am also quite interested in the quality of their products and the consistency and level of service, but I will work with a company that is not quite as high in that regard if their employees are notches above their competitor.

If I were a business making this decision I am not sure how I would respond to this. But as an individual consumer that is where my preferences lie.

Here is an example. I have a choice of several coffee shops near my office. I love good, stout coffee and although I generally only drink a cup each day it is a part of my morning routine I really enjoy and miss when I can't do it. My choices are Starbucks, and two other small local shops. (imagine that....a Starbucks in Seattle!!!! <grin>) I can take or leave Starbucks coffee. Nothing special. The two local shops offer a much better and stouter brew. But, their employees are curt at best. I have never developed any kind of rapport with them. But the folks at the nearby Starbucks, even though they change periodically, quickly become friends and a part of my day. When they leave for other jobs we often keep in touch. I can tell you the name of each barista, what classes they are taking in school and how they are doing. What their kids are up to, etc. We have found many instances of mutual friends in town, etc. Dealing with them is a good experience each day, consistently. Starbucks does offer a rewards program that I use, but that is not why I go back to that store, and the coffee is not why I go back. It is the experience each day that gets me back there.

I may not be a typical user. My co-workers often express surprise when I go into a restaraunt with them and can greet a waiter or waitress or cook by name. Or if we are off in another remote part of town and I run into someone who used to work downtown and I know them.

Anyway....those are the things that bring me back.

Dave

[Dan Hintz]

I earn customer loyalty through high-quality work, not rebates, coupons, etc. The "customers" looking for bottom-of-the-barrel pricing quickly move on, and I'm happy to let them go as they will be forever trying to nickel and dime you to death. When your clientele are one-offs for the tourist type, offering "Today only, 10% off!" types of things are fine, but it really doesn't engender a good relationship with long-term clients... they'll wait for you to offer a discount, ask when your next discount will be offered, wait until then, etc.

The only "promotion" I offer is to take on projects others deem too difficult... if it's for an existing client, I will offer them a very fair price. If it's for a new client, I will price it to cover any potential bugaboos I might encounter to cover my backside, and if none show up, I may reduce the original price (this really builds loyalty). If the new client never comes back, I still feel I've made a good profit and learned something in the process... if they do, well, there ya go.

[Gary Hair]

The "customers" looking for bottom-of-the-barrel pricing quickly move on

My business coach advised me a long time ago that any customer you win on price will be lost on price - win them with your value proposition and you'll keep them regardless of price.

[Mike Troncalli]

I have to agree with both Gary and Dan.. My customers have come back to me over and over because I deliver a consistent high quality item at a fair price and bend over backwards to get their orders out on a timely manor. I have had customers leave because they found a lower price but 90% have come back to me. They know that if they are in a bind I will do whatever it takes to get them taken care of. I have even taken no profit on a few small jobs (no fault of mine). The few times that this has happened, my customer knew about it.. They have been most grateful for helping them out of a bind.

[Ross Moshinsky]

There is customer loyalty but there are also organizations where the president turns over every 2 years and they have "a guy" and it doesn't matter what you do, you're losing that work.

Ignoring the marketing side of business (which is a huge part of running a successful business), business comes down to putting out a good product and knowing your margins. If someone wants something for $10, there are "nice" options out there where you can make reasonable money. Judging the person won't see you build a business. If you're not interested in catering to your market, then you're not interested in being in business. Now that doesn't mean you can't give an opinion, but if everyone that wants to do business with you only has $15 to spend, don't you think it would be wise to come up with some products you can sell for $15 and make some money?

[Mike Chance in Iowa]

It's the same for me as Mike, Gary & Dan have stated. Providing quality items and superior customer service keeps my customers coming back and I receive positive word of mouth advertising.

For my long-term customers who order often, we have built up an easy working relationship and know what each person needs to accomplish the job. We have a level of trust and even developed a friendship so to speak. They are the customers who can send an email at 10pm and say "I really need such-n-such" and provide all the details I need to let me run with it the next morning and ship it off that afternoon. We'll settle-up the bill several days later when we both have a moment to breathe.

One reward I do for my long term customers is turn them into my "official testers" for me when it comes to trying out a new product or new design. It could be something as simple as engraving a new type of pen or key chain with their name or their grandkid's name on it.

[Doug Ladendorf]

There are many ways to get repeat customers. Often it is a feeling people get when thinking about buying. There are companies that make it a point to give their customers a warm cookie. It's part of their brand, a trademark gesture. Customers love it. When they think about that company it's one of the first things that pops in their head and gives them a good feeling, which counts for a lot. What's your warm cookie?

[Jason Hilton]

I can't speak specifically to a laser business, but I have designed and implemented loyalty programs for various clients throughout my customer experience consulting career. As several others have noted, quality products and great service are the first and most important component of customer loyalty. Loyalty programs only work if the products and service are up to snuff.

A loyalty program requires some other prerequisites before it makes sense to implement. The first is a business model that encourages and supports repeat business. A laser business that does trophies and plaques is a good candidate because sports organizations purchase products regularly. Secondly, you have to be sure a loyalty program is a financially viable option for the business. Is the potential value of the program worth the time and money investment required to implement the program? Thirdly, is your market large enough to support a loyalty program? Loyalty cards are most successful on a very large scale, and rapidly lose value at smaller scales. Viewed in the context of a massive organization, customers see value in joining loyalty programs, but at the small business level most people see a loyalty program as a hindrance to interaction with the business. People want to have connections to small businesses, however fleeting, and that connection has a big influence on the overall customer impression of a business.

All that said, even if you decide a loyalty program isn't for you, that doesn't mean the concepts can't be integrated into your business practices. Consider offering a returning customer a small discount automatically. You won't have to point it out, they'll notice and appreciate it. No card to punch, nothing to sign up for, just a quiet thank you to a loyal customer will be a very powerful motivator for them to return.

[Bill Stearns]

Hey 'gain -
Thought I was clear 'n asking 'bout ways to build loyalty BEYOND service, prices 'n workmanship, etc. Guess not, as just 'bout everyone brought these basic factors to the forefront. The consensus being: these factors ('least for the engraving business) rule out the need to offer an actual loyalty reward program. Plus, Jason's idea that my business isn't scaled large enough to merit initiating a reward program is probably right on the mark. So, guess I've learned what I wanted to know - thanks all.
On the flip-side: I've know 'great many business, over the years, which offered terrific service, great pricing, and quality products - all long gone now, due to competitive pressures - 'cause sometimes these elements just aren't enough! Did get 'few good ideas, however. Mike suggesting I give each customer a little "gift" of some sort. (i.e. keychain, pen, etc.) - one of those "can't hurt" type of things. And, Doug explaining the value of giving customers a "warm cookie". (an advertising gimmick which, if nothing else, spurs remembering a business.) Kind' a giving thought to Ross's idea: - my offering "cheap items", too. (if that's what my market is truly after?) Thinking that customers who buy a $5 item may return for a more profitable item down the pike? Anyways, thanks for all the input. Now, back to working on my new book - "To Small to Fail". :) Just kidding - back to engraving ...

Bill

[Dan Hintz]

On the flip-side: I've know 'great many business, over the years, which offered terrific service, great pricing, and quality products - all long gone now, due to competitive pressures - 'cause sometimes these elements just aren't enough!

This does raise another issue many of us have discussed here in years past... the race to the bottom. Do you want to be one of the few surviving shops that are doing just that, surviving, and nothing more? If I can't survive by offering a quality product at a reasonable price, then my business deserves to die off. I'd rather flip burgers at the local McD's (and let them take all of the risk of keeping me as an employee) than make the same hourly wage with a business barely scraping by (where I'm responsible for expensive equipment and upkeep, quarterly tax hassles, etc.). The moment you start acting like those businesses that paper Wal-Mart parking lots with 50% off and buy-one-get-one-free offers, that's the moment you begin racing to the bottom.

A customer should need to come to you because of what you offer, not because you're the cheapest.

[Bill George]

Well put Dan.
When I had my PlasmaCAM and was doing metal art and then parts for people building cars that was all fine. But take your stuff to a art/craft show and people look at what you've done and think... heck he does that all on a machine all he needs to do is turn it on. They forget that someone has to do the design. People see that junk from India and where ever priced at $5 and think yours needs to be priced the same.

I did make some money doing personalized signs and metal art that was specialized for pet and horse owners.

Problem with the plasma cutting is it gets in the air and in your lungs even with a good exhaust system and a water table.

[Kev Williams]

My engraving is industrial oriented, so the vast majority of my customers are other businesses. And more than a few of my customers are other engraving shops. I do engraving most other engravers avoid. I have customers come and go, but I have many regular customers going on 30 years or more. My dad started this business in 1966, and his first customers were ex co-worker/friends who changed employers, some of them several times. And typically, someone at every prior employer would call us for engraving, then THEY would change jobs, etc. etc... good ol' word of mouth, with Dave's "exponential function" at work! ;)

[Joe Pelonio]

I also prefer to let them come back due to the quality, but I did try something one time to get more customers. What a flop. I gave out a card to my regulars that gave them a 15% discount on their next order if they referred a new customer to me that spent at least $50. A regular waited until he had a $1,800 order, then sent me a referral that gave me a $60 order. Cost me almost $300 to make less than a 3rd of that, and never saw the new guy again. :(

[Bill Stearns]

DAN -
I value your input; really do. Sad truth is, much as I enjoy this business, I am "just surviving", not much more. Not' a shame to admit this; plenty of others are 'n the same boat, nowadays. (BTW: gonna have nightmares, tonight, of my flipping burgers at McD's.) By asking 'bout promotions, I wasn't inferring that service 'n quality are absolutely essential to success. Just that promotions, handled right, can help a business "stand out from the rest" - 'n those instances where competitors all offer the very same products, good service 'n quality, too. BTW: I do provide, safe to say, extraordinary customer service, and nobody has ever balked 'bout the quality of my products, or workmanship. (okay, one lady 'couple years back.) But, enough 'bout promotion: would like more of your thoughts 'bout "pricing". (know we've discussed pricing 'n past posts.) Guess I don't consider my trying to come up with different pricing strategies a "race to the bottom". (But, I do know what you mean.) Where do see the problem in my expanding into "lower cost awards"? Keeping 'n mind by "low cost", I don't necessary mean "cheap quality". Would like to think I'm more creative that that.) (plus, my chief competitor has shelves of that stuff.) Paraphrasing you - "a customer should come to me 'cause of what I offer" - if "inexpensive" is what they're after, shouldn't I be offering it, too? (key word: "too".) Especially, to groups hamstrung by pencil-thin budgets? Why chase 'em to the Internet? Only other move I can think to make is to expand upon those higher ticket items which sell best for me - meaning: a wider assortment of choices 'n styles. (i.e. photo engraving, lake maps, family trees.) You think this would be 'smarter, more profitable, direction for me? Please, let me know.
JOE - 'minute you mentioned your promoting with a "discount card", I could see your problem coming! That's why you see so many disclaimers on promotional cards - Get a Burger Free - with the purchase a soda - offer only on Tuesdays 'tween 1 p.m. 'till 4, etc etc.

Thanks guys - you're not just offering advice BTW - you're helping me, well ... stay afloat!

[Dan Hintz]

People see that junk from India and where ever priced at $5 and think yours needs to be priced the same.

I did make some money doing personalized signs and metal art that was specialized for pet and horse owners.

And this raises yet another good point, though one not raised often enough, I think. If you make the same thing as a Chinese shop, is there any valid reason to expect someone will pay 10 times more for your version? It's a competition you're destined (and guaranteed) to lose. You might get away with it if the Chinese version is complete junk and yours is totally awesome, but those are few and far between. The real choice is to make something not made by the Chinese (or someone else). I see plenty of posts here about people trying to compete in the business trinket world (stamped pens, calendars, stress balls, etc.), mainly because everyone can order from the same catalogs... if you're competing against 500 people all making the same stuff, the low bidder wins almost every time. Razor thin margins, not a fun way to survive. If you make something custom, there's no one to compete with, which means you can help set the market price.


I gave out a card to my regulars that gave them a 15% discount on their next order if they referred a new customer to me that spent at least $50. A regular waited until he had a $1,800 order, then sent me a referral that gave me a $60 order. Cost me almost $300 to make less than a 3rd of that, and never saw the new guy again. :(

You missed a key ingredient on that discount card... a limit to the discount, e.g., "15% discount on the first $400 of any single order". The card worked, but it would have worked better if you set limits.

[Dan Hintz]

Paraphrasing you - "a customer should come to me 'cause of what I offer" - if "inexpensive" is what they're after, shouldn't I be offering it, too? (key word: "too".)

Offering a low-price line of items isn't a problem in and of itself, but you need to keep them highly separated. Also, be prepared for customers to try the old "This item (in your premium line) is only a few dollars more than the one I initially asked for (in your value line), so can you upgrade me for free?". The price points need to be either far enough apart they can't honestly try that (and the products will have to reflect the large price difference), or you have to be willing to stick to your guns every time.

That said, what is your time worth? Would you rather 8 hrs/day at $100/hr profit with a quality line, or $40/hr working on the value line where the margin is thinner? You may need to do both initially if times are tight, but eventually you'll want to drop the value line altogether.

[Pete James]

The best way to get repeat business is to maintain a line of communication with your customers. We use a simple email (with prior approval from the customer) program on a regular basis. We sent out x emails daily to a portion of our existing customer base. Usually, with some small special offering, but often just a happy birthday, have fun on Memorial Day weekend, or Happy Christmas (or Holidays for the politically correct). Try and limit the emails so that no customer gets more than one every two weeks. Many will respond to specials, and almost all will remember you when the need arises. On occasion we mail inexpensive samples. Just keep business name and products in front of your customers. By the way - never quit looking for ways to attract new customers. No matter how happy your old customers are with you, that base will eventually dwindle away.

[Amos De Pasquale]

I have read with great interest the advice and opinions given in this thread; in my case I have run an electronics repair shop these past 16 years.
The service and quality coupled with honesty, have kept me going when really the time has come to close.
In those years, I had another unprincipled repairer open up just 80 metres away, he offered "free quotes" and various things to get customers, but did not last and closed up after a very short time.
The flood of cheap imports has affected the repair business, to the point where buying new (but poor quality), has become the norm.
I also have noted in the Pen making business, many selling themselves super cheap, mind you , some of those selling at low prices also are making poor quality stuff.
In general, most people do not have regard for loyalty, there was a day an age where loyalty and quality were the bench mark, however, things have changed, I see it in the society in general, most have an expectant attitude, where you are expected to pick up their litter, you are expected to give them a free handout;
and most will select or vote for the person(s) or goods that represent the "cheapest" or "freest handout". I speak in generalization, realising that there are genuine people out there, but, not enough to run a business profitably.
On my part, I will always aim to give quality and service. Amos

[Gary Hair]

Bill,
I'm going to say this as nicely as possible and please understand it's coming from me with a sincere desire to understand and to possibly help. I have a really hard time reading your posts due to your usage of punctuation marks. I'm not sure what your intention is in using punctuation as you do, but if you communicate with your clients the same way it may put them off. I have honestly never seen anyone write quite like you do and I have been participating in forums for more years than it would seem possible. It would be interesting to see you write a post using only periods - no quotes, no commas, no apostrophe, etc.
If my post offends you then I apologize as that was not my intention.

Gary

[Frank barry]

morning all
I think this is a very good post and some good ideas the thing about sales is half of what you do is of no use (you never know what works and what works for one customer might not work for another) many of us can make things and some are just amazing but very often you find those who can make amazing things cant sell as its a very different skill
I do think you have to be able to buy well so you can sell at a good price and make a good return and in the end of the day we have to compete with products from other countries and there is also a great need to be able to move your business model in different directions with loosing your core and remember we buy from people so to sell you have to be a people person Happy Easter all Frank

[Bill Stearns]

GARY -
No I did not take offense on your commenting about my apparently too casual writing style. Not sure when or why I got into the practice of writing that way? I will see if I can change this habit because easy readability is the key think. And no I do not use that style when writing to customers. Which as Dan might say brings up another good point. Customers or even friends who do not bother to tell us openly and honestly how they feel about things. Our businesses nor products for example. My question: do any of you use customer surveys to learn how your customers actually feel? I am thinking now of implementing one. Somehow anonymous enough where customers might openly speak their mind. Your thoughts on or experiences with surveys?
Okay Gary. How did I do? No quotes apostrophes or parentheses. But already finding I cannot live nor write without commas as you suggested. Can almost feel my 6th grade teacher whacking me with her ruler for omitting them from where they should be used. Seriously I will at least attempt to cut back on distracting punctuation marks and too casual writing. Thanks for bringing this to my attention.

Bill

[Doug Ladendorf]

I had to go back to see what Gary was referring to. To me Bill's use of punctuation was appropriate and perhaps a bit more thorough than most. Frankly I would rather see someone give more attention to what they write than less, which has become more common. (See my use of a comma there… Oop! now parenthesis, yikes!)

:p

[Richard Coers]

I've been reading a lot of your posts on your business Bill. I'm curious if you did any type of business plan or business study before you bought your machine? Just because you wanted a laser didn't mean that a business could be supported in your area. Many restaurants fail because so many people feel that they know how to cook well, so all they have to do is open a door, and they have a business. Same goes with any business of course. Before I started a custom woodworking business, I did it part time for 15 years. I wasn't going to kill a great day job on something that I did not thoroughly investigate. After 8 years in business, I found that I was not cut out to run a business. I was killing myself with 80 hour weeks because I could not say no. My insecurity about the business just about drove me to the grave. I was no good at paperwork, but I was one heck of a good craftsman. I sold what I could, and closed the door. Just suggesting that you look a little deeper, and see if this is what you should be doing. No idea how long you've been at it, don't even know if this is full time for you. But everyone is not cut out to do just anything they think they can. It takes a passion and immense creativity to run a small business.

[Jason Hilton]

I always found the way Bill writes to have a sort-of folksy charm, I imagine him speaking in the same way!

In regards to your question on surveys Bill: Surveys can be incredibly valuable if you understand your goals and ask the right questions. Make sure before you have a very clear idea of what kind of information and feedback you're trying to gather. What problem are you trying to solve? What questions are you trying to answer? Do you want general feedback on your customer service or specific feedback on individual products?

A couple of other guidelines that will help:

1. Keep it short: People hate taking surveys. Short and too the point means more people will complete it

2. Incentivize participation: A survey is considered overwhelmingly successful if 10% of respondents participate. To encourage participation, offer a reward or drawing or some other incentive. Make sure your respondents understand there's something in it for them

3. Use a survey tool: E-mail surveys are annoying to people, use an established tool (Survey Monkey is a popular choice) to make taking your survey as painless as possible

4. Cast a wide net: As I mentioned above, a 10% response rate is considered amazing. A large pool of respondents increases the chances that you'll get enough feedback to make decisions. If you have a small pool and get only 3 responses, you can't be confident that changes or decisions you make based on that information will be valid. The more data you have, the more confident you can be.

Hope that is helpful!

[Kev Williams]

Bill is simply writing as he would say it out loud. I do that, as do many others. Bill has just taken the 'art form' to a higher level! ;)

When I was in Jr. high school we had to write a short story, just make something up from scratch- I don't exactly remember my story but I DO remember people in the story "talked", and they used words like "ain't" and bad English - "Joe don't have any banana's! - because, that's how my character's talked! I got a "D" because of using bad English and for using words like "ain't". Kinda soured me on English class!

(sorry for the hi-jack!) ;)

[Gary Hair]

GARY -
No I did not take offense on your commenting about my apparently too casual writing style. Not sure when or why I got into the practice of writing that way? I will see if I can change this habit because easy readability is the key think. And no I do not use that style when writing to customers. Which as Dan might say brings up another good point. Customers or even friends who do not bother to tell us openly and honestly how they feel about things. Our businesses nor products for example. My question: do any of you use customer surveys to learn how your customers actually feel? I am thinking now of implementing one. Somehow anonymous enough where customers might openly speak their mind. Your thoughts on or experiences with surveys?
Okay Gary. How did I do? No quotes apostrophes or parentheses. But already finding I cannot live nor write without commas as you suggested. Can almost feel my 6th grade teacher whacking me with her ruler for omitting them from where they should be used. Seriously I will at least attempt to cut back on distracting punctuation marks and too casual writing. Thanks for bringing this to my attention.

Bill

I'm extremely happy that you didn't take my post as offensive or attacking you in any way. It's difficult to express, and read, emotions in writing since you don't have facial expressions, body language, and voice intonation to get your cues as to the intent. Just as you were not put out by my post, I wouldn't have been put out if you had replied with "that's the way I write and I'm not going to change." I can only comment on how I feel, I can't ask you to change if you don't want to.

I've never used surveys even though my wife is a data analyst that creates survey instruments for a living. I'd be curious to see what your results are and what changes you can make based on the responses. I have always been of the mind that most of the people who comment on a business transaction are not happy, the happy customers usually stay silent. The old adage is that a happy customer tells no one but an unhappy customer tells everyone... That may be a bit extreme but I believe it's more true than not.

[Jason Hilton]

Gary,

Your point is very valid. Unhappy customers are always the most vocal. Our goal should be to provide a customer experience so compelling that the customer becomes an advocate for your business. This is a major push forward from the traditional marketing expectations of simply increasing sales. A positive customer journey makes the customer invested personally in the success of a product or business. It's really fascinating stuff.

[Bill Stearns]

Hi All -
Gary commenting on my writing style sure sparked interest, uh? Ultimately, we are all here to help one another, right? and that's what Gary was trying to do. Jason - you're right, I've been writing like I "talk"; didn't think anything of it. Based upon your responses, think I'll continuing using punctuation where I feel it's needed, and writing in what Jason called "my folksy" manner. Me? if something is tiresome to read, I simply pass it by.
JASON: Thank for the advice on "surveys", I'll keep it all in mind. Think my biggest question might be: what more might my customers' companies be buying from me? (i.e. they will order a retirement plaque from me, engraved signs from someone else. Go figure?) Got' a kick out' a Richard asking - did I create a business plan at the start? (going on 8 years now.) A good reminder that business plans aren't just for "start ups", but important all 'long the way. BTW: Here is my story in a nutshell: I used to sell Gold Bond Trading Stamp Programs, years ago. (thus, my asking about promotions a few posts back.) Thinking many of you are too young to know what a "trading stamp" is, uh? No secret: they vanished from the scene with the advent of electronic point reward programs. Left me wondering what I might do for a livelihood! One day my son (an engineer) called to say he had bought a laser engraving machine. Told him I'd help him acquire sales. Ran 'round town to quickly realize there were engraving needs everywhere! Ended up buying the machine from him - no particular plan in mind other than survival - started Great Engravings. At 65, now, my "plan" isn't to grow bigger, just more profitable. (Oh, how I wish I was younger! I could much more easily grow this into a larger business than it is - investing in new 'n better equipment, etc. Don't seem to have enough stamina anymore. Finding it much tougher to simply reach a point where I'm not sweating bills that roll in. That's about it. Now ... back to work. (what'd you say we start a new thread regarding surveying our customers?)

Bill

[David Somers]

Bill,

Your last comment about not growing bigger, just more profitable, is pretty helpful. I think many of us were focused on getting you more business in various ways, profit through volume if you will, through customer retention, reaching out for more business, etc. But if I read you correctly you would rather not get busier, just more profitable with the time you are investing now? Is that a fair read on my part?

If so, and please keep in mind I am not experienced in this by any stretch of the imagination, after looking at your web site it seems like you have 2 basic choices for becoming more profitable. Either find less expensive sources of supplies to make what you are making now, reduce your overhead in otherwords, or change what your focus is to something more lucrative. If the work load of the award and consumer type products you are doing now isn't doing what you want, perhaps changing over to more industrial types of applications might be the ticket? I throw that out simply as a starting point of conversation though. I think folks here who are actually doing this for a living can give you wayyyyyyy more ideas than I can.

Dave

[Dan Hintz]

my "plan" isn't to grow bigger, just more profitable.

With this in mind, I would say stay away from a value line of products altogether, then.

[Ross Moshinsky]

With this in mind, I would say stay away from a value line of products altogether, then.

Not the case necessary. You can make decent money on laminate plaques and plates cut on a sheer. In fact, I'd be curious why anyone wouldn't offer these kinds of plaques.

[Scott Shepherd]

Not the case necessary. You can make decent money on laminate plaques and plates cut on a sheer. In fact, I'd be curious why anyone wouldn't offer these kinds of plaques.

Because we don't need to. Too much higher paying work available. Those are some of my answers to why we don't want to play at that end of the market.

[Bill Stearns]

Hello again -
How confused I must be making those of you who are trying to help. Sorry. Writing what I have 'bout my situation, reading your responses, has helped me to realize just how muddled I am in my thinking. One minute I'm saying I need a great deal more business, the next I'm saying I'm not out to grow larger. (what an oxymoron, uh?) On the bright-side, I love my business; really enjoy it. I run around a 76% gross profit margin - leading me to think my pricing of items, and COG, is reasonable. (please tell me if I'm wrong?) Attempting to think more clearly, guess I feel I just need more traffic, and much more awareness of my business and capabilities. Thus, my always asking about your advertising and promotional experiences. Been told to forget about newspaper ads, flyers, mailers, etc. - which, frankly, threw me for a loop! (Other than thru word-of-mouth, how else do people learn about a business?) Thinking. Thinking. I do tend to think they forget I'm here. (My chief competitor has a much more visible free standing store on the main drag, has been around for years 'n years - very well known - first place people think of when needing engraving. Even after 8 years, think I am an "after thought". 65, still a kid-at-heart, I could stand to be 'lot busier than I am; just no longer out to build empires. Thus my considering expanding into "low cost" awards. But, like Dan said: Is this the best, most profitable, use of my time? More than likely not. With taxes mailed off, property taxes coming up, guess I'm just running 'little scared - what ever I come up with to improve business, should probably happen pretty soon! Thanks, as always, for all your caring. (Oh, and Dave, thanks for checking out my web site - can use any suggesting there I can get!)

Bill
Great Engravings

[Ross Moshinsky]

Because we don't need to. Too much higher paying work available. Those are some of my answers to why we don't want to play at that end of the market.

7-20x markup isn't good enough for you then, that's your call.

[Scott Shepherd]

7-20x markup isn't good enough for you then, that's your call.

I have no desire to be in the trophy side of the business. Good margins or not. I'll stick to what got me where I am today. If it's not broke, I'm not going to fix it.

[David Somers]

Bill,

No worries! One of the lovely things about a group of people like this is you can use us to help clarify your thoughts, not just seek technical answers. Working through thoughts can be a bit awkward in a forum, but if any group is going to give you the space to do it, and politely and patiently try to help it is this one. In fact. I truly can't think of a group that is as patient with this kind of thing as everyone has been here. (sorry....I am being schmaltzy. But you folks are really good to each other. The way you work with each other would be impressive in person, let alone on an internet forum)

Dave

[David Somers]

Bill,

Another thought. Have you considered sitting down with a business coach? They would be in a position to actually review your numbers, talk about your goals and feelings about where you currently stand,and perhaps help you put it in perspective and help you decide where to take it, if anywhere. I have a few friends with businesses that are in a kind of crux.....a position where they need to grow or contract in order for things to work. The coach hasn't actually given them an answer, but kind of like a counselor might help with personal decisions they have helped the person define what it is they want, and compare where they are with others so there is more of a grounding in reality about their situation. They were a knowledgable sounding board in other words. Might be worth it since you seem to really enjoy what you are doing, but are not feeling secure about it? Again, perhaps I am misreading what you are saying, but that seems to be the situation?

Dave

PS...I will try to take some time this weekend and go look more at your web site and see if I can offer any thoughts. If anyone else has thoughts and some time you might do the same thing.

[Bill Stearns]

Dave 'n Others -

Thanks so much for your kind and encouraging words. And, indeed, this is an incredible group of people. Believe you hit the nail-on-the-head. Writing to you all helps me to more clearly define how I am thinking and feeling 'bout my business and issues. (My friends' eyes glaze over, whenever I talk business.) Now thinking that my primary objective needs to be: greater awareness = more traffic = higher sales. My 76% gross profit margin would seem fine for a one person operation; nobody suggested it wasn't. Guess I feel that I am diversified in my product offerings - that my prices are reasonable - my quality and workmanship fine. So, now, feeling I simply need to do 'much better job of reaching those people and places where the money is! And of keeping my business name in front of current and past customers. In a past post, someone asked: "What do you offer that competitors do not?" Awful lot to chew on there.
BTW Dave - I have tried business counseling in the past. Our so-called business development center; found it a political can 'o worms! They made short-work of me as I was not interested in borrowing 'n investing thousands, growing large, hiring 'bunch of people, and joining the Chamber. (mentioned earlier one of my competitors "heads" the Chamber.) Also, found that while counselors may spout general business advice, if they don't understand your specific business/industry, well lets just say - I find this forum vastly more helpful. Will appreciate your feeling 'bout my web site - kind of a "here is what I have to offer" kind' a site. Thanks again. (will now shut-up and listen.)

Happy Easter All -
Bill

[Mike Null]

Bill

The secret to success in this or any other business is marketing. Hone your marketing skills and you will see your business grow.

I wouldn't get locked into a fixed gross margin when pricing your wares. I have a number of jobs which deliver a margin half what you're quoting but other than cutting an invoice and packaging them I do no work. I have a few other customers where I've developed a unique marketing approach tailored to their needs. I make a shorter mark on them but I make a few thousand pieces every year. Be flexible.

Since I am home based I've tried to focus on commercial rather than retail clients. I can now pretty much turn away retail business.

[Bill Stearns]

Mike,
Thanks, as always. That's what I am realizing more 'n more - my future "marketing" will be key! Why I've been asking you all 'bout advertising, promotions, loyalty, etc. BTW: the 76% GPM I mentioned is year-to-date, not a profit margin that I place on individual items. Also: neat to hear that yours is a "home business" - me too! An obstacle only in the sense that my chief competitors both have attractive, free-standing stores on main drags. (not so much a problem once customers discover where I am, and what I offer.) Hence the need for more customers learning about me. Marketing. Marketing! I do enjoy the "retail side" of my business - walk-ins, etc. - but, would like clarification on what you, and others, call "commercial" - as pertains to laser engraving. (most potential opportunities have called for metal-marking; where Cermark wouldn't be practical for the jobs.) Also, could you share with me what you meant by "developed a unique marketing approach tailored to your customers"? Maybe in pvt? Open to any and every idea you can offer. Really am scraping the barrel right now. Thanks 'gain! - Bill

[Gary Hair]

and joining the Chamber
It may be different in other communities, but I found the chamber to be of absolutely no value to me. I was VERY active, on the board and was the Chair for a year - still brought in almost no business.


found that while counselors may spout general business advice, if they don't understand your specific business/industry, well lets just say - I find this forum vastly more helpful.
Business is business, but the advice you get from someone who knows exactly what you are going through is much more valuable and can get you more focused than generic business advice.


Will appreciate your feeling 'bout my web site - kind of a "here is what I have to offer" kind' a site.

I looked it over a bit and, for my taste, it looks really nice. It's easy to navigate and shows good examples of what you do with good pictures. The only thing I didn't care for were the places where you have bolded-red text that state you don't engrave metal. I'm guessing you put it there so emphatically because you get lots of people asking about it? If so then it wouldn't hurt to leave it if it helps to reduce those calls. If not, I would get rid of the 2 or 3 places you have the red text and just state that you "mark stainless steel". It just seemed like you were yelling this and it was in pretty start contrast to the rest of your site. Just my .02

[Bill Stearns]

Gary -
I understand - thanks. I should know better than to publish "negatives". Will change this tomorrow. (or, at least, reword it somehow.) Reason it's there: awful lot of people come in looking to have jewelry engraved, which I don't do. Have been sending 'em to a gal down town who does this using a - what's it called? a panogram engraver? - the old etch by hand style. Also: being in Northern Minnesota I get so many guys looking to have rifles 'n guns engraved - I am just trying to save 'em a trip. BTW: Thanks for the comments 'bout my site! - I was indeed shooting for easy navigation. Earlier on the forum someone suggested 'few tricks which helped me gain in the search ratings - now, when you Google "engraving - Minnesota" my site is on the first, or second, page. Has helped 'lot. One question: (based on earlier forum discussions 'bout web sites) - did you feel I needed more text describing items? - a little written "sizzle"? Also: do you feel that an "about us" page might help - showing my products as they are nicely displayed in the main room of my house? (might help customers feel more comfortable coming in - know 'head of time what to expect?_

Thanks again - Bill

[Gary Hair]

what's it called? a panogram engraver?
Pantograph


I get so many guys looking to have rifles 'n guns engraved - I am just trying to save 'em a trip
Why not do the work? It really doesn't take much to get your FFL, I went through the process and mine literally arrived today!


did you feel I needed more text describing items?
I think that most people just want the basics. So many people are using phones and other small devices like that to search/browse and if you have too much it would be difficult to browse with those small screens. I would give just enough info to let them know what it is and compel them to call for more.

do you feel that an "about us" page might help - showing my products as they are nicely displayed in the main room of my house?
I wouldn't put it on your website but let them know before they come. There are some people, businesses mainly, that may not want to work with a home-based business. I run mine out of my house and have had no problems, but where I live it seems that every other house is running some type of business so they are very accepting of me doing the same. Nowhere on my site does it mention it though and that was by design. I do work for several large companies out of state that have no idea that I work out of my house and there is no reason for them to know - I get their work done and that's all that really matters.

[Frank barry]

I am with Gary on this if you have customers coming in looking for you to do engraving and your telling them you don't do it your sending out a very bad message you want to be seen as the engraving guy why not buy a cheap machine for now and do it ?or sub it out in that way they are still your customer Just my taught cheers Frank

[Mike Null]

Bill

I enjoy talking to retail customers. It's just that their jobs are usually onesies, They want to talk about it, rethink it then talk some more. i find that they can quickly become an annoyance. It is not often that a retail customer becomes a regular. They have a job right now but probably won't have more and I don't really want their referrals. Personal choice because I am home based.

I have had commercial clients refuse to do business with me because I don't have a store or commercial location. Not many, but it does happen.

The reason I like commercial clients is because they have continuing needs and their orders are larger. They like to do business by email. Most pay promptly, some want terms. I just got a job last week where the customer's terms are "net 45". I have customers who have been with me for 15 years. One started as a small volume plaque customer and in the next 3 months I will ship plaques to their 2000 locations. (they are an example of a unique program where I function as a supplier and fulfillment house .)

The other unique marketing program I developed grew out of a $20 order. Once I determined how much volume there was and how I might offer a valuable service and a profit making opportunity for the customer (s) I put together a slick presentation that turned into a fairly large and continuing business. When I say large, keep in mind I run a one man shop with a part-time helper.

I have always viewed engraving as offering a service rather than a product, much the same as a plumber or a dentist. Over the years I've broadened the services that I offer as most of my customers have need of more than engraving. I offer CLT and laser sublimation along with rotary and diamond drag engraving. I do wholesale for a few customers including a jewelry store and a gift store. I do a bit of sandblasting though I really don't like it and turn away some work. Besides adding to my services over the years I have some jobs where it is necessary to outsource. You can expand your horizons greatly and for no investment by finding people who will do jobs or parts of jobs for you.

While most of us will share the hows of doing a job there are things that we don't share for the simple reason that the internet makes us all competitors.

Oh yes, GO TO TRADE SHOWS and work like crazy while you're there. You'll be amazed what you can learn. There is an NBM show in Indianapolis in June. Go if you can.

[Bill Stearns]

Mike, Frank, Gary 'n All -
It is certainly encouraging to find so many of you doing really well with your engraving businesses! Easy enough to tell that I've been growing discouraged: my sales hardly ever reflecting all that I can do, and offer. I ran out of yellow highlighter marking thru all your terrific suggestions - one all the way from Ireland. Believe I have enough, now, to keep me busy for 'quite a while. In short: I am going to, best I can, set aside the whining and worrying - gonna go back at this with renewed vigor and confidence. Let the chips fall where they may. Think it was Henry Ford who said: Whether you think you can, or think you cannot, you are right!"

Thanks everyone,
Bill

[Tim Bateson]

...Also: being in Northern Minnesota I get so many guys looking to have rifles 'n guns engraved - I am just trying to save 'em a trip...

Why would you NOT do weapons???? It's a good deal of my business and growing every day. Besides gun/knife owners will usually pay a premium to have their weapon customized. Gun/knife owners give me more tips $$ than any other product/service I produce.

[Chris DeGerolamo]

Tim, it is from my experience you should not engrave any more firearms, but rather send those customers to me instead. hahaha!

[Tim Bateson]

Tim, it is from my experience you should not engrave any more firearms, but rather send those customers to me instead. hahaha!


No problem. :-D

[Bill Stearns]

Tim - Chris:

Does hurt knowing I'm turning away business of any type. Especially, knowing there is a market in my area. Guess I have avoided engraving "firearms" - mainly, thinking the liability too great, if an error were to occur. Don't know much 'bout firearms, but I have to believe they're darned expensive. Then, there is my not knowing the metals being used and all. Guess I've thought, all this time, this was a rotary engraving thing - or, some process used by "specialty companies". Are you talking 'bout my using Cermark? - even on the dark metals I've see on firearms? ( I have tried engraving on dark colored metal knife blades - doesn't show up worth beans.) I have an "in" with a very popular sporting goods retailer, here - could probably gain quite 'bit of business if I could better understand personalizing firearms. Don't suppose you'd start a new thread on the topic? (Worst thing is: to see ways to increase business, yet not have the needed resources. Should I be looking into buying a Pantograph, you think? - would that help me break into this?

Thanks for all your support 'n ideas.
Bill

[Frank barry]

Hi Bill
I bought an old pantograph played with it sold it made a few £ on that and bought a Suregrave Dahlgren Wizzard this machine is built like a tank no plastic on this machine I fitted a self centring vice and you can do that for small money cheers Frank

[Ross Moshinsky]

I have no desire to be in the trophy side of the business. Good margins or not. I'll stick to what got me where I am today. If it's not broke, I'm not going to fix it.

Um, are we not talking about someone who is in the plaques and awards business though?

Bill: I looked at your site and I saw solid wood and designer plates on everything. Well that's why you can't get the "value" buyers because every plaque you sell costs too much which is why you can't think of selling for less. I'll also say this, your prices are too low Bill. I've spent the last 3-4 months on and off researching plaque pricing and you're too low for what you're providing. Type in "award plaque" on google. The first 5 sites are your global competition. If you're lower than any of them, you're priced incorrectly.

I'm going to do my best not to throw out actual costs but if the "LE" series plate costs X, and I can buy 2 sheets of stock and make the same thing for 2X but from the sheet stock I get 6x the product, I'm dropping my costs by 1/3. Not to mention those designer plates are constantly damaged which I find to be a major issue at times. Doing it my way, you don't have to drop your plaque price at all and yet your increasing his margins a reasonable amount. You may have to pay $400 for a sheer, but it should pay for itself quickly enough.

[Mark Ross]

Bill,

We are currently in 12 different markets with our lasers (yes with an s...LOL) and we have a "work with us loyalty program".

If they stay with us we will...

Carry safety stock of finished items if their demand goes up and down.
We will do rush jobs at no increased costs.
We do free prototypes.
We research and show them new technologies applicable to their markets.
We have a stocking program where we run X amount of work over X amount of days/weeks/months and bill them on a predictable basis (kind of like being on an energy budget) so they have a fixed cost. Many businesses are boom or bust and it ties into the safety stock thing. If we do 25K a year with one customer, we bill them 2K or so every month. In months they are booming they might take 6K of product but they only pay for 2K.
2% 10, net 30? I haven't seen that in a long time. All our good customers get Net 60. Great customers get Net 90, but we do a lot of work and have negotiated Net 60 with our vendors so we can go and offer net 90 to our great customers.

Basically we kind of act like a bank with 0% terms for a certain amount of time. But only with customers that we can pull D&B or other credits on and our sales people are constantly there dropping off things and checking things out to make sure that things are okay.



Those are only for our loyal customers. Sure sometimes we get nervous when we don't hear the phones ringing, but we have some huge (Fortune 50) customers that have Net 90 and pay at 270 but you learn how to factor that in.

But the ladies (isn't this always how it works?) in accounting have the last say. If someone is told 90 days, on the 91st day, they are in the doghouse and they stay there...for a long time...and they know and respect it. Those who don't get pushed back into Net 60, Net 30, COD or CIA (Cash in Advance) and it takes years for the CIA's to get back into the great category.

We are not a powerhouse who goes through pallets of material a day, but we do pretty well. It all depends on your market and who your customers are. Hope this helps.

[Bill Stearns]

ROSS -
Sure appreciate your advice and your evaluating my site, products, and pricing. In a nutshell, I was so excited learning "how" to create my own site - seeing, now, that a better thought out marketing plan should've come first. (including pricing.) I will definitely look at those sites you mentioned, as a pricing guide for my plaques. Been so focused on how to increase sales, had stupidly forgotten to find ways to cut costs! No reason I can't design 'n offer my own "designer plates" - from cheaper sheet stock. Dumb part is: I do own a metal sheer/cutter! This is one of those "Duh! Kick Me" moments! Plus, I think JDS has 'fairly new line of economy plaques - 'stead of my offering solid woods. Not sure my customers appreciate, or care 'bout the difference - when they're looking for price? Thanks again. I've sure got my work cut out for me!

Bill