Build Your Business: Management

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July 8, 2013

Business literature is replete with books, some of which are best-sellers, which discuss the importance of customer service. An oft-repeated maxim is that the customer is always right. However, there are ideas customers convey that are funny, wrong or — in some cases — downright dangerous.

Following is a countdown, from No. 10 to No. 1, of the most common things we hear from customers, as well as some ideas about how to deal with them.

10. “It is OK to do a copyrighted design if you change it 10%.”
This one falls into the “dangerous” category. We often are told that everybody knows you can do this popular copyrighted logo if you just change it 10%. This often is followed with “besides, it is free advertising for the company.” This is completely untrue.

If, for example, your customer asks for a shirt with a Major League Baseball (MLB) team logo, there is no way around the copyright. If your finished product is identifiable as an attempt to resemble the design of an MLB team’s logo, it is a copyright violation and the penalties can be substantial. Several large, well-known firms have developed their own apparel lines to fight counterfeiting. Copyright infringement can cost you your business, substantial fines and more. The advice here is simple: Do not attempt to skirt copyright laws. If in doubt, contact your lawyer or smile and say “no.”

9. “We want the pricing based on 100-plus items, but only want three or four for now. A big order follows.”
It is rare that an embroidery or screen printing operation has not fallen for this saying at least once, especially where the customer is known to represent a large organization that has the potential for a significant purchase. We have often seen it done in the interest of acquiring a large job later, but the larger job rarely materializes. Worse, the customer may even return with several small orders with different designs. My recommendation here — implemented after learning a hard lesson — is to set prices based on quantity, price each job based on that quantity of a particular order and offer to reduce the price substantially when the larger order materializes.

8. “I know that you can run this extra job tonight.”
The customer is entirely correct! Of course, you can violate your own two-week delivery policy, work late and get the rush job done. It is tempting to do so because of the importance of providing great customer service. But there are problems. First, you need the time with your family or yourself that the two-week policy was designed to provide. Additionally, this has the effect of “training” your customer in bad habits. We have delivered early several times to retail business owners, only to find they were now promising one-week turns because “you did it that fast last time.” Finally, you probably have other customers who are happy to pay rush charges. We hear it over and over at seminars; have a price list and delivery, and stick to it.

7. “I do not understand the digitizing fee. Don’t you just scan this picture into your machine so it can sew it?”
We actually heard a version of this from an advertising executive who had probably purchased thousands of dollars in embroidery and other logoed products. To most people in this computer age, digitizing means converting a picture or document into a format that can be read by a digital process. The word conveys nothing with regard to the need to program stitch type and direction, thread cuts, color changes and other fairly complex things; the expensive software necessary to do them; and the time, experience and artistic talent necessary to perform these actions. Our invoices list a design fee and we often explain that it is a charge for converting a design into an embroidery program.

6. “I am really good with computers and graphics. Let me help you tweak this design.”
There are several problems with agreeing to this. First, like any professional, those of us who are good at digitizing make it look deceptively easy. The customer who watches you open a design and start working on it was not there when you struggled with learning the process. Therefore, he will mistake your hard-earned expertise with “easy.” Additionally, many customers overstate their own experience. We have found that “being good with graphics and computers” often means the customer can cut and paste with a low-end graphics program, a far cry from the sophisticated programs on which most of us rely. I recommend working with a stitched-out design or paper printout of the design when discussing changes with the customer and never doing it on the computer.

5. “I just want a few editorial changes…”
Most of us have a price list that specifies a charge for design development, plus one editorial change after the design is presented to the customer. “Editorial” is hard to define, and we have all worked with customers whose editorial changes became a complete rework of a design. There is no clear line that says: “Beyond this point is a complete redesign that will require an additional charge.” However, you know when you have exceeded a simple edit.

4. “Just show me the thread chart.”
We all have thread charts that display hundreds of colors from many different manufacturers. As the experienced embroiderer knows, however, the colors can look very different, depending on the way it is stitched, the nearby colors in the design and the lighting in which it is viewed.

Additionally, stocking all of these colors is expensive. On the other hand, some customers are (and have a right to be) very particular about color. In general, we recommend working on color within the actual design. Very few customers have the artistic ability to make fine distinctions among the several hundred colors and shades on a thread chart.

3: “The shop down the street can do this for a lot less.”
Ours is a competitive industry. Some customers are buying in large enough quantity that a few cents can make a difference. Early on in our shop, we lost a very big and lucrative job by a few pennies and spent a lot of time regretting it. Since then, we have several times bid very low, gotten the job and then realized the final bill would not recoup the costs. The best way to handle bidding is to carefully calculate all the costs plus the profit you need to make the job worthwhile. Your bid then reflects the lowest amount of money for which you can do that job.

2. “I don’t know exactly what I want, but will recognize it when I see it.”
This statement often comes up when developing a new design or making a major change to an existing one. Graphic design is such that the customer may have a vague idea of what he wants, but really won’t have a clear picture of the final result until you create it. Filling this need is a great part of the value that an embroiderer, screen printer or designer brings to the table. However, there is a point at which the cost of this customer can exceed the limit of profitability.

For small shops, design work is time away from outputting product on the machine. That is fine if the charge justifies it. For larger shops, your design staff is an expensive resource. Use it wisely. That means knowing when a design job needs to be reevaluated. A reasonable customer will realize when you need to add charges. Do you want to keep the unreasonable customer?

1. “I found some cheap shirts on sale. Can you put my design on them?”
Of course you can. And it is fine to go ahead with it if both you and your customer understand the pitfalls. First, a good design incorporates characteristics that will make it look best on a specific kind of material, and the cheap shirts are probably not that same material. Secondly, working on customer-furnished garments carries a risk. If we err on a garment that we provide, we replace it and the customer never knows.  This is not the case with customer-furnished items. The potential for problems is worse when the furnished garments are not cheap.

One of our colleagues does a good business monogramming dress shirts. However, good dress shirts approach $100 each, or more. Ruining one can wipe out a lot of profit. Each shop must to come up with its own policy on customer-furnished items, but the best idea we have seen is an agreement limiting losses on a specific item to an amount…say $50. An attorney can draft one up that will work.

A lot of these problems can be mitigated by strong policies on pricing, delivery times and design work. It is easy to violate these policies to get or retain a customer, but if you have thought through your policy well, exceptions will damage your profit and can endanger your business.

Roger Rosenberg co-owns Lone Pine Embroidery & Design with his wife, Nancy Terrell-Rosenberg. The firm has been in business for 14 years. A former United States Air Force colonel, he also has been an adjunct professor in undergraduate- and graduate-level business programs. For more information or to comment on this article, email Roger at pinetree105@gmail.com.