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View Full Version : How far do you go to get a customer?



Scott Shepherd
10-30-2007, 11:41 AM
I'm in the middle of trying to land a new customer. If it lands, it will be big. Very big for me. However, I'm going through something that I found interesting and thought might get some interesting input from others.

I've been asked to do a couple of samples for free. No problem (I said and thought). However, upon further examination, the specs they use are tied into some very specialty products. To reproduce a simple 7" square sign, it's going to cost $250 in specialty paints, and those specialty paints require more that just opening the can and spraying the paint.

It made me do a double take and wonder if it's worth it. If it lands, then it's certainly worth it, if it doesn't land then in the end, I'll be out probably about $1,000 in materials and labor.

Just curious how far you'd go to get a big customer. I've put a cap on my effort and I'm getting close to that cap.

Any insight from those who have gone through this before?

Mike Null
10-30-2007, 11:48 AM
It is pretty much routine for the client to expect to pay for samples. Especially ones so costly.

I would be very reluctant to accept that offer. You may consider countering with the sample price is refundable on receipt of the contract.

David Lavaneri
10-30-2007, 11:48 AM
Scott,

I hope this isn't the case, but a silkscreener friend of mine heard the same line, "If you can make some free samples, when the real order hits, you'll be in the money."

Turns out the samples were the real order, which the customer (if you can call him that) was being paid for.

Usually, to prevent that scam, it's best to tell the person to pay for the samples, then, once the tsunami of work comes in, that money will be refunded.

That way, it's only a free sample if the big one actually hits.

With the pricey scenario you've laid out, that's the only way I'd handle it.

David "The Stunt Engraver" Lavaneri

Mike Null
10-30-2007, 11:51 AM
David

Good to know my teacher agrees.

David Lavaneri
10-30-2007, 12:01 PM
Mike,

I thought I hit the Submit Reply button first. :)

The "School of Hard Knocks" teaches the tenets of the old "Free Sample" ploy.

David "The Stunt Engraver" Lavaneri

Scott Shepherd
10-30-2007, 12:25 PM
Getting them to pay for a sample is out of the question. They weren't looking for a new supplier, but I managed to get a meeting with them. I offered to make them a sample (looked pretty darn simple to me at the time). My best guess was $100 tops in material and labor. Since they don't handle the purchasing of raw materials, I suspect they have no idea of the cost.

Also, keeping in mind, the items needed are enough to make 100's of the signs, not just one.

They seemed to be somewhat open to giving me a chance on some future work if my sample was okay. So, basically, if I didn't make the offer to make a free sample, then they would have shook my hand and said "thanks for coming". But, by offering to make the sample, they spent more time with me and showed me one to make, and agreed for a second meeting.

So while not an ideal situation, without that offer, I'd have left with no chance. We're talking about probably at least $50K worth of work a year if I can get into their place.

Joe Pelonio
10-30-2007, 12:27 PM
I'd never do that, Scott. There are ways to provide a sample without that cost. Agree to do the sample with "off the shelf" paint, and include in your quote the price of the specialty paint as a line item, which explains why you won't do it free.

In a case like this you have to charge for the whole can of paint even if you use only 1 airbrush cupful, so tell them you will save it for them for future orders. That invests them so they are not as likely to switch to someone else.

Phil Sanders
10-30-2007, 12:50 PM
Scott:

$250.00 in specialty paints?
Richmond, VA?
7" square sign.....Hmm

Gosh that is going to be one tough call. Because of your location and description of what you have to do, I suspect your potential customer is BIG.

By that I mean: you not be submitting a 'sales' sample, but are submitting a qualification for Quality Control production vendor approval. Trust me, if this is what you are talking about, this is a whole 'nother world. Tread very cautiously.

Be sure you get all the referenced documents, as some purchasing types so often "forget" to send you those referenced documents. Don't let them baffle you with claims the documents are standard "Government", "Aviation Industry," or "Military Procurement"; get a copy and read them. Look very closely for the following Key Words: Mil-Spec, EDI, ISO-9000, ISO 14000 (or any ISO) and VOC air quality. These will be buried down deep in some referenced document. . You never know what is buried in the referenced documents (which may be all lawyer speak) that will put you out of business.

You haven't given enough information, but some of the very expensive paints have very heavy OSHA and environmental problems that some company (or whatever) may be trying to sub-contract out. But you may already be ahead of the curve on that.

I agree with the other replies, a 'sales' sample should not be fully usable by your customer.

I just read you updated comment that you are seeking an in where the customer is not actively seeking a new vendor supplier.
Some questions that can get you into trouble: don't answer, but think through.
Does that mean if you do get your foot in the door, you will be only getting part of the production needs?
Will you become sole supplier for the item?
Will you be bidding on price / delivery rates on future production lots against current supplier(s)?
If your machine goes down, and you cause your customer a production halt, are you going to be responsible for wages and costs of that halt?
Will you be required to maintain a stock of completed items ready to ship at their (your?) location but they don't pay until they actually order the parts?

Phil

Keith Outten
10-30-2007, 12:58 PM
I will join the masses here Scott and in spite of the big carot I would walk away from any company that would expect such expensive free samples. I don't think I have ever heard of a customer that would provide a specification and design to request a free sample, it soulds fishy to me.

I might provide a sample but it would be my design and my selection of materials...nothing they could sell to a customer.

.

Craig Kershaw
10-30-2007, 1:09 PM
Here's something else to think about when landing a "BIG" Customer. Big customers can be risks, especially if you devote time and energy in serving that customer and put the smaller ones on hold. Its a very risky proposition for a business to have a customer that is more than 20% of their revenue volume. You get used to having the customer, but if they leave all of a sudden that revenue volume you were used to dries up and now you have to scramble to fill the void. I know one guy whose business strategy says he can't have a customer that is more than 5% of his total volume. Also, I'd be leery of potential customers who want expensive "freebies".

Scott Shepherd
10-30-2007, 2:17 PM
I appreciate the input, but several have missed what I said (or I didn't say it correctly). They didn't ask for a sample, I offered it. The free sample was my suggestion, not theirs. Of course, had I known then that it would be several hundred dollars in specialty items, I wouldn't have offered the "free" sample. So it's all on me, and a mistake I made and one that will come out of my business.

Lesson learned.

Yes, they do have standards and a manual on it and I have been over the specifications several dozen times now trying to get familiar with their specs.

Phil, I didn't say it was in Richmond :)

Also, it's not $250 in paint for a single sign, it's $250 for the coatings that it uses, which would probably be a teaspoon of, so actual cost will be $250 or so, but if more were ordered, the cost per sign would be less than $1 each for the coatings.

And this is to get a small piece of their work, not all of it. The do over a million a year in signs, so peeling off $50K of that wouldn't be an issue. The sample is a quality control sample, not a sales sample, so the colors have to be right.

If I had to do it over again, I probably wouldn't have made the offer to make a "free sample". But it's over and done now and I stand by my word to deliver a quality product equal to or above the quality level they are currently using.

Might end up being a loss, might end up being a home run. We'll have to wait and see.

Mitchell Andrus
10-30-2007, 2:43 PM
I appreciate the input, but several have missed what I said (or I didn't say it correctly). They didn't ask for a sample, I offered it. The free sample was my suggestion, not theirs. Of course, had I known then that it would be several hundred dollars in specialty items, I wouldn't have offered the "free" sample. So it's all on me, and a mistake I made and one that will come out of my business.

Lesson learned.

Yes, they do have standards and a manual on it and I have been over the specifications several dozen times now trying to get familiar with their specs.

Phil, I didn't say it was in Richmond :)

Also, it's not $250 in paint for a single sign, it's $250 for the coatings that it uses, which would probably be a teaspoon of, so actual cost will be $250 or so, but if more were ordered, the cost per sign would be less than $1 each for the coatings.

And this is to get a small piece of their work, not all of it. The do over a million a year in signs, so peeling off $50K of that wouldn't be an issue. The sample is a quality control sample, not a sales sample, so the colors have to be right.

If I had to do it over again, I probably wouldn't have made the offer to make a "free sample". But it's over and done now and I stand by my word to deliver a quality product equal to or above the quality level they are currently using.

Might end up being a loss, might end up being a home run. We'll have to wait and see.


I say go for it. If this is a very 'high stakes' prospect, there may be work that comes from this even if not what you originally intended. Making a good impression and greasing the skids now makes it easy for the prospect to call you again later. Spending $200 - $400 in time and materials to land a foot in the door for $50K + over the next few years....? I'd fly across the country for the meeting alone, and bring 5 samples with me.

If you figure out that you aren't qualified to accept the contract or can't handle the extra work... back out now, but make it known that they can keep you in mind for smaller jobs their regular suppliers don't want.

Also, be aware a hot-shot in procurement could be setting you and a few other small fish up for failure so another, favored supplier bubbles to the top and gets the job.

Frank Corker
10-30-2007, 3:40 PM
Steve, I too don't like the free sample, but in this case as you offered, I'd be inclined to go ahead with it as you are doing. Good luck with it and I really hope that the reward is as big as it promises to be.

George Elston
10-30-2007, 4:05 PM
Scott,

Just my 2 cents worth, I have also opened my mouth when I did not know what I was getting into, but my most valuable asset is my word. If I say I'll do it, I have to do it, and that simple creed has gained me more than it has cost, and it has cost me. I say follow your instinct and go for it.

Maybe you could get the suppliers to send you samples of the high price stuff and cut your costs, it could be good business for them also, to get a new customer doing a couple of grand a year.

Mark Winlund
10-30-2007, 4:25 PM
I have been "nailed" a few times in my career this way. One particular job that I remember that we did "free" samples for was a maker of casino games. It required very expensive transparent inks in many different colors. After they got the samples, we found out that the purchasing agent was just trying to get his current supplier to lower his prices... they never intended to switch.

Another time we were making badges for a very large corporation. They offered us the contract to do the entire corporation (including foreign branches), some 45,000 people. The requirements were strict... custom badge color, custom font (had to be made from scratch) and screen printing logos in four different colors, all with tight registration.

It turned out that one of the corporate bigwigs had set up his wife with an engraving machine, and he needed to look like he was getting competitive bids. We were lower in cost by a substantial margin, but guess who got the job? (hint: it wasn't us.) We were the only company that actually qualified for the job other than the wife.

Hard lessons indeed. Free samples aren't free.
Mark

glenn bradley
10-30-2007, 4:30 PM
Getting them to pay for a sample is out of the question. They weren't looking for a new supplier, but I managed to get a meeting with them. I offered to make them a sample (looked pretty darn simple to me at the time).

The fact that 'you' are pursuing 'them' does challenge the free v.s. paid sample position a bit. They are reviewing your craftsmanship, not the material per se. I would (if possible) let them know that there are specialty materials involved and you will make them samples using regularly available materials as a demonstration of your work's quality. Just a thought.

Scott Shepherd
10-30-2007, 5:06 PM
Interesting side note, just got a quote request from another customer and it specifically says in the quote that you will provide a sample at no charge prior to even being considered for the job!

Phil Sanders
10-30-2007, 5:22 PM
.....Phil, I didn't say it was in Richmond :) .....
Nope, you sure didn't.:D

But then again...,
get a map, and draw a circle around Richmond say about a 3 or 4 hour drive's worth of a circle. Whole lot of in that circle.... yep, a whole lot.

Anyway, your eyes are open, you're an adult, and it sounds like you're ready to take any body blows coming your way. What else can anyone say....
Best of luck and God speed, Scott.

Phil

Mike Ross
10-30-2007, 7:18 PM
Exciting and scary at the same time!!

Scott, if I were in your situation I would call the client and explain the situation. Explain that the called for materials are more than you anticipated at your original meeting. Ask them if a sample with "off the shelf" paint would work? They will probably appreciate your honesty, if not, do not want that piece of business?

This also helps you establish what it will be like to work with them. Some large accounts you do not want if the buyer is a pain. You can lose a lot of sleep over large accounts.

Represent yourself and your abilities honestly and expect the same. Neither of you wants a business commitment if your companies are not a good fit.

Good luck,

Mike Ross

Sam Starr
10-30-2007, 8:12 PM
A promise is a promise. I have been in sales for 25 yrs you have to say what you mean and mean what you say NEVER go back on your word. If it don't work out write it off as business expense. In the future remember under promise and over deliver you will always come out on top. Good luck.

Sam;)

Stephen Beckham
10-30-2007, 11:51 PM
Scott - I may be too late to jump in here, but what about the possibilty of getting some "samples" of the paint/supplies from your supplier? Or some "samples" from another one of the suppliers customers?

The point - if you are possibly going to buy some specialty materials and possibly lots of it - you could request some samples of those materials for R&D and marketing.

Alan Case
10-31-2007, 6:35 AM
If you trust your ability and you have a gut feel you can get the work, then buy the paint and go for it. The rich are usually the ones that take the chances.
Regards Alan

Jim Huston
10-31-2007, 9:21 AM
Years ago I was in the vacuum forming plastics business. We were small and under funded but creative. Our stadard MO was to get into a company, visit with the designers or engineers FIRST, supply a sample for a project they were working on. Usually had the sample on thier desk to play with within a few days. Often this involved working late nights making the mold, forming the part, triming it and a long drive back to the customers. We ALWAYS formed the customer name on the part. After the designers/engineers got the part and IF the project was a go -- we ALWAYS got the job! That was how we started in 1972. Today the company still makes parts - bigger, more processes, ect -- Just my way - your milage may vary.
What I am saying here is that rather than compete for a project that is already in others hands - and will therefore be VERY price competative - go to the same customer and work on NEW items -- if you do a good job the "old" items will follow.
JimH

Rodne Gold
10-31-2007, 10:18 AM
If you wanna gamble on this , ask yourself why they would use you?
If you can't give a decent answer , you're wasting your money doing samples.
However you have promised.......... Take the chance and write off losses to school fees , Sam said it.

Scott Shepherd
10-31-2007, 10:33 AM
Interesting comments from you guys. Thanks for the input. We set up a meeting with them because they were complaining that the delivery was very slow. They are locked into a very large contract, but have the ability to go around that contract for smaller items. They can easily do $5000 orders outside that contract. I heard, on a conference call, how uphappy they were with delivery from the current vendor, but they are locked into the contract and they are only a small part of the larger contract, and they have no official say so in it.

I'm fine with the decision I made. What have I realized? I have realized that whoever designed the sign package must have certainly been trying to shut out all the little guys by specifying very expensive processes for very simple things. I can assure you that everything I have bought can easily be duplicated with a trip to the automotive paint store and the normal paint store. Instead of $70 a quart, I'm sure it all could be bought for $15 a quart with the same look. Someone setup those signs to cost a lot, no doubt in my mind.

Business is a learning experience and you win some, you lose some. But, in my opinion, if you never take the risks, then you'll never reap the rewards. Not all bets win, and most lose, but if you don't try and never go out on the edge, you'll never know what could have happened.

Last thing I want to do is look like $250 in going to break my business by going back to them and explaining the situation. It's all about perception, to me. If they perceive $250 in materials is too much for me to handle, then I have no chance of getting a large order from that that requires $10K in material.

I don't gamble much, and most of the time when I do, it's only dollars in material, but I think this one is worth the risk.

Thanks for all the input, there were some very good tips and thoughts throughout this thread.