When it comes to delivering your price, some embroiderers feel a lot of anxiety. Most of this is caused by the fear of confrontation with an upset customer or fear of a lost sale. There are some simple things you can do to remove this anxiety and enable you to charge more for your services and enjoy better profits.
First, we have to understand that the customer is not just buying thread, a blank garment, and some of your time. The true value of the product purchased is a perceived value. The more we can increase the perceived value the more margin we can enjoy, regardless of what the competition is doing. I once saw a satin jacket for sale at a Graceland gift shop with a back embroidery of Elvis Presley. After costing out the jacket and embroidery at that time it was estimated to cost no more than $50 per jacket. The jacket was being sold for over $500. That’s almost a 1,000% markup. This is what perceived value can do to a cost figure.
There are three things you can do to increase the perceived value of all of your embroidery: Quality, Service and Packaging.
- Quality – Embroidery has always enjoyed the distinction of being a rich form of embellishment. This probably comes from a time when all embroidery was done by hand. Now that we use high speed, computerized machines don’t lose that perception by sloppy finishing. Check your work thoroughly and remove any loose threads - remove the backing neatly and remove any hoop marks. Double check the color choices and correct spelling of names and words.
- Service – Always deliver as promised! Go the extra mile to make your customer’s experience enjoyable and rewarding. If any mistakes are made go out of your way to remedy them. Make it impossible for your customer to consider going anywhere else.
- Packaging – Most of the perceived value comes from the packaging. Even though packaging materials are thrown away by the customer, you will find that you can earn additional margin through creative packaging. It’s possible to increase your product or services perceived value by as much as 10 times the cost of the packaging materials alone. This is far more markup than you will get from either the garment or the embroidery.
Communicating Pricing with Customers
One last trick to improve your pricing strategy can be found in HOW you communicate. Do not make pricing the focus of your sales presentation. By doing so, you draw the customer’s attention to it and generate your anxiety. In conversation with a customer, never leave the price at the end of a sentence. For example, if the customer asks for the price of a monogram over a robe pocket, instead of saying “We can do that for $12.50” try the following response; “We would be happy to initial your robe for only $12.50, would you like that in the dark blue or navy thread? Also, try adding that "if you place the order soon, I can get it on my schedule for you to pick up day after tomorrow.”
By following the simple guidelines above, you should be able to comfortably derive profitable pricing for your business.