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Sound Reinforcement - Forums for Live Sound Professionals - Your Displayed Name Must Be Your Real Full Name To Post In The Live Sound Forums => Installed Sound/Contracting => Topic started by: Alex Thompson on August 21, 2014, 08:59:41 am

Title: Free quotes and system design
Post by: Alex Thompson on August 21, 2014, 08:59:41 am
Hi all, I was wondering if anyone had a good idea on how to deal with this.

We do new installs and upgrades mostly for churches and use EASE + measurements of the current system to provide a complete recommendation on acoustic treatments and sound equipment upgrades.  When possible we will provide before and after coverage maps for SPL and STI.  To put it simply, we spend a lot of time producing a design.

I suspect a few potential customers may have been using me simply for a comparative quote (when they already had someone else in mind to do the work) or else to produce a design only to have another company install or do it themselves.

Almost everyone wants an itemized list and I feel it is necessary to provide it so the customer is able to make an informed decision.  I'm afraid sometimes my equipment list + detailed description of the proposed system is giving away too much.

What do other installers do to protect themselves from someone else using their designs?  Is charging for the initial consultation/ design work the only way?



Title: Re: Free quotes and system design
Post by: John Roberts {JR} on August 21, 2014, 10:47:40 am
Charge a fee for the review/design, that can be deducted from the final job. So they only pay for it if they don't use you to finish the job.

JR
Title: Re: Free quotes and system design
Post by: Alex Thompson on August 21, 2014, 01:30:07 pm
Charge a fee for the review/design, that can be deducted from the final job. So they only pay for it if they don't use you to finish the job.

JR

I think you're right that this is the best way I'm just afraid I may lose some potential customers by making them pay upfront.  I guess if we all would charge for estimates

I have already started asking to be paid for mileage for the first visit for longer distance customers with some success.


Title: Re: Free quotes and system design
Post by: Rob Spence on August 21, 2014, 02:40:52 pm
I think you're right that this is the best way I'm just afraid I may lose some potential customers by making them pay upfront.  I guess if we all would charge for estimates

I have already started asking to be paid for mileage for the first visit for longer distance customers with some success.

I would not call it an estimate.

Sell your thoroughness. You are being hired to design an upgrade.
If they use you for the install, subtract the design work (or not). If they choose another installer, you have been paid for the design.

Perhaps they only get the detail design if they are paid up? Perhaps a conceptual along with recommended products but not a detailed bill of material?



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Title: Re: Free quotes and system design
Post by: Hal Bissinger/COMSYSTEC on August 21, 2014, 05:16:45 pm

Almost everyone wants an itemized list and I feel it is necessary to provide it so the customer is able to make an informed decision.  I'm afraid sometimes my equipment list + detailed description of the proposed system is giving away too much... only to have another company install or do it themselves.

Why do you think they want an itemized list? First is so that they have a "shopping list" and second so they can troll the net for lower prices and nickel and dime you to death so that you won't make a profit- assuming that they give you the job in the first place. My first rule is to NEVER itemize on a quotation. It's OK on the final invoice but don't give them fuel to go out and price shop or help the competition. And believe me they will show the competition your quote.

For the amount of work you put into a proposal (I agree, you shouldn't be calling it an estimate) you definitely should be charging something which could be credited to them when they give you the job.

-Hal
Title: Re: Free quotes and system design
Post by: Alex Thompson on August 21, 2014, 05:39:24 pm
Why do you think they want an itemized list? First is so that they have a "shopping list" and second so they can troll the net for lower prices and nickel and dime you to death so that you won't make a profit- assuming that they give you the job in the first place. My first rule is to NEVER itemize on a quotation. It's OK on the final invoice but don't give them fuel to go out and price shop or help the competition. And believe me they will show the competition your quote.

For the amount of work you put into a proposal (I agree, you shouldn't be calling it an estimate) you definitely should be charging something which could be credited to them when they give you the job.

-Hal

An itemized equipment list is usually requested and I think the customer needs to know what they are getting, at least all the key components, before signing the contract.  I've NEVER had anyone try to negotiate the price of individual items (it may be regional/cultural thing of my area) and I always make enough profit to be worth my time.

I never itemize prices.  My service is priced as a whole package not individual pieces. I even avoid separating labor from equipment cost.  If they want to know what each item costs, I tell them MAP price for the bigger stuff and lump together all the miscellaneous cable, connectors, hardware, etc.

I think from now on I'll:
1.  Present potential customers very tactfully with a confidentiality agreement that they are not to share my designs/proposals/any other info from me with anyone outside their own organization.
2.  Give examples of previous designs with coverage maps, 3d simulations etc and offer to sell them their design (which will be deducted from the total cost of the job later), or give them a much less detailed quote for free.

I hope this sounds like a reasonable new method of bidding work.



Title: Re: Free quotes and system design
Post by: Hal Bissinger/COMSYSTEC on August 21, 2014, 11:29:38 pm
I never itemize prices.  My service is priced as a whole package not individual pieces. I even avoid separating labor from equipment cost.  If they want to know what each item costs, I tell them MAP price for the bigger stuff and lump together all the miscellaneous cable, connectors, hardware, etc.

That sounds good. I should have been more clear and said itemizing prices is not something you want to do.

-Hal
Title: Re: Free quotes and system design
Post by: Ivan Beaver on August 22, 2014, 07:29:45 am
I guess part of the question is "what is considered "design""?

Providing a general equipment list and a price to install is one thing.

Providing a complete set of drawings is quite another.

Yes some people will 'steal a design" by purchasing the gear somewhere else and either installing it themselves or having somebody else install it.

HOWEVER just having the gear is a LONG WAY from having a working system that works properly.

If it is only about the gear-then the legit companies are going to lose.  But if it is about customer relationships-having a system that works well, is serviced well  etc, THEN there will be a difference.

It is VERY important for the customer to understand that what is being provided is a SOLUTION and gear is just PART of that solution.

When not installed/aligned properly-even the  best gear will fail to provide acceptable/good results.

But if it is only about price to the customer-then they will often end up paying more in the long run-and the whole time have less than optimum results from the gear.
Title: Re: Free quotes and system design
Post by: Scott Carneval on August 22, 2014, 01:28:16 pm
I've had to deal with this quite a few times and unfortunately had to learn the hard way. I now charge a design fee that ranges from $500 to $2k, depending on the scope of the design and if they want EASE predictions, floor plans, rack diagrams, wiring diagrams, etc. This is typically deducted from the install price if they choose to go with me. 

If it's someone I've done business with in the past, then I'm typically more lenient. But if I spend a full day or even a couple days on a design, I expect to get paid. If the client comes to me with a design from someone else and just wants a bid, I may consider it, but I've yet to see a design from someone else that I haven't had to significantly modify. 
Title: Re: Free quotes and system design
Post by: Luke Geis on August 22, 2014, 02:29:17 pm
Most companies deal with it by not providing part numbers and of course there is a fee for the design service. Basically there is no usable information given to the client unless they have paid for the service of having it.

The trick many clients do is just as you have mentioned. They have someone come in, design a system and then get all the part numbers and pricing. Then they turn around to their " friend in the sound business " or competitor and use that info to leverage a better deal.

The easy fix that I have seen with companies I work for is simple. You pay this much for the system design ( which includes blueprints ) and if you decide to use use us we will release the part numbers and per item cost. It keeps the client from getting pricing on specific items and of course without part numbers they have no way of knowing what the total cost is for. This way they cannot turn around and make a bidding war over it.
Title: Re: Free quotes and system design
Post by: Lee Douglas on August 22, 2014, 05:22:32 pm
Some times a little client education is in order.  Teaching them that creating the design itself has its own value.  Entire companies dedicate themselves to just doing design services so that installation companies can bid on that design.  If you are talented enough to do both, you can absorb the cost with a signed contract on the back end.  The other option is bidding on a design provided by the client.  At that point the design provided is not up for negotiation.  Rectifying poor design becomes a matter of change orders or choosing not to bid on it to begin with.  It should be that cut and dried. 
Title: Re: Free quotes and system design
Post by: Scott Holtzman on August 22, 2014, 07:21:59 pm
Some times a little client education is in order.  Teaching them that creating the design itself has its own value.  Entire companies dedicate themselves to just doing design services so that installation companies can bid on that design.  If you are talented enough to do both, you can absorb the cost with a signed contract on the back end.  The other option is bidding on a design provided by the client.  At that point the design provided is not up for negotiation.  Rectifying poor design becomes a matter of change orders or choosing not to bid on it to begin with.  It should be that cut and dried.

I have had clients so stupid they copy me when forwarding my quote to the competition. 
Title: Re: Free quotes and system design
Post by: Joseph D. Macry on August 25, 2014, 10:56:08 am
Why do you think they want an itemized list? First is so that they have a "shopping list" and second so they can troll the net for lower prices and nickel and dime you to death so that you won't make a profit- assuming that they give you the job in the first place. My first rule is to NEVER itemize on a quotation. It's OK on the final invoice but don't give them fuel to go out and price shop or help the competition. And believe me they will show the competition your quote.

-Hal
Instead of quoting specific brand and model of gear, I usually include basic specs of gear in the design quote. For instance, instead of "Shure SM58S", I will write "Handheld microphone, dynamic cardioid with switch". For speakers, maybe power rating, cabinet size & material, and driver sizes.
Title: Re: Free quotes and system design
Post by: Ray Aberle on August 25, 2014, 08:50:54 pm
I have had clients so stupid they copy me when forwarding my quote to the competition.

Sorta had that same thing happen a couple of months ago-- client forwards me a quote from another company in the area, and asks if I could get him a better deal. I deflected it as best as I could, as it was another stage at a festival I was already doing one stage at, and I didn't want to damage the relationship that I have with the other company. That, and I was out of gear for that day pretty much, so I would have ended up renting a bunch of stuff from the other company anyways!

-Ray
Title: Re: Free quotes and system design
Post by: Scott Holtzman on August 26, 2014, 02:40:51 am
Sorta had that same thing happen a couple of months ago-- client forwards me a quote from another company in the area, and asks if I could get him a better deal. I deflected it as best as I could, as it was another stage at a festival I was already doing one stage at, and I didn't want to damage the relationship that I have with the other company. That, and I was out of gear for that day pretty much, so I would have ended up renting a bunch of stuff from the other company anyways!

-Ray

I don't know if it's like it in your area but anyone who has been around awhile knows his competition, especially the worthy ones. 

Everyone knows the story of the young bull and the old bull standing on the cliff.  The young bull says looking down at all the cows in the pasture "hey I am going to run down and f... that one"...The old bull chuckles and says, I think I will walk down and F.... em all.

Title: Re: Free quotes and system design
Post by: Ray Aberle on August 26, 2014, 02:48:05 pm
I don't know if it's like it in your area but anyone who has been around awhile knows his competition, especially the worthy ones. 

Everyone knows the story of the young bull and the old bull standing on the cliff.  The young bull says looking down at all the cows in the pasture "hey I am going to run down and f... that one"...The old bull chuckles and says, I think I will walk down and F.... em all.

Oh, I sure know who my competitors are in the area, especially anyone within 500 miles with VerTecs, and what boxes are available and where. And whether they're any good, or if the rig is stuck in an install, or blah blah blah. At the same time, we're all in this industry together, and until you give me a reason to dislike you, I am going to treat you with respect. I don't want to be "that guy" who takes a line item quote from the competitor, and beat it just for the sake of beating it, thus dragging pricing down for everyone!

Next year, though... with time to prepare, no such consideration. :D

-Ray
Title: Re: Free quotes and system design
Post by: Scott Holtzman on August 27, 2014, 02:19:51 am
Oh, I sure know who my competitors are in the area, especially anyone within 500 miles with VerTecs, and what boxes are available and where. And whether they're any good, or if the rig is stuck in an install, or blah blah blah. At the same time, we're all in this industry together, and until you give me a reason to dislike you, I am going to treat you with respect. I don't want to be "that guy" who takes a line item quote from the competitor, and beat it just for the sake of beating it, thus dragging pricing down for everyone!

Next year, though... with time to prepare, no such consideration. :D

-Ray

GMTA

It's nice to be older with a mature business and have the option to take on clients that you want and will be a good fit.

Hunger breads desperation,  and I have seen some folks sign up for work clients or jobs that are doomed to fail or disasters waiting to happen.

The bull story is of course not a literal screwing.  More than likely I will be around when the contract is up, the new competition makes a mistake or at the liquidation sale.

Title: Re: Free quotes and system design
Post by: Scott Hibbard on September 03, 2014, 08:33:19 pm
Alex this seems to be most problematic (for me) when working with school systems, who insist on an itemized parts list with the system quotation/design; else your bid is not considered.  This is presumably due to the fact most schools (not all) that use public funding (tax dollars) require such information. 

In cases like that I have to decide if I want to play ball or pass...

Good luck!
ScottH
Title: Re: Free quotes and system design
Post by: Scott Holtzman on September 03, 2014, 09:14:11 pm
Does your state have negotiated pricing?  If so it's a great gig especially if you get SKU added.  I always try and bid the stuff on the contract.  Pricing is non negotiable and the labor rate is generous.  I like working in schools.  Highly suggest if you can partner with a low voltage company and pickup a line of bell prices.  I subscribe to the public bid service.  One of my guys is a genius for sniffing out the poorest worded and most profitable RFQ's they almost always come from the same numb but consultant.
Title: Re: Free quotes and system design
Post by: Cailen Waddell on September 03, 2014, 10:38:51 pm

Alex this seems to be most problematic (for me) when working with school systems, who insist on an itemized parts list with the system quotation/design; else your bid is not considered.  This is presumably due to the fact most schools (not all) that use public funding (tax dollars) require such information. 

In cases like that I have to decide if I want to play ball or pass...

Good luck!
ScottH

As a PM for a government facility, I ask for line item pricing on straight equipment bids so I can value engineer.  System design is different and are not designed by installers at our bid level.  A consultant or designer does the design work, we might for example list several dsp models as the design basis, but we all know the cheapest of the list is what will get bid.  The bid specs includes an equipment qty list and face panel drawings, one line system connectivity, etc.  We will accept alternates but the burden on the installer, to prove equal or better performance is steep. I can also make some pretty compelling arguments for compatibility with existing equipment. 

Our last theater used Yamaha CL consoles, biamp dsp, and danley speakers as the design basis, with a special spec item that a factory technician do system tuning.  Funny enough we ended up with Yamaha CL consoles, biamp dsp, and danley speakers and Ivan came and tuned the room

It's damn hard to obtain quality gear setup properly within government purchasing rules, so I'm pretty proud of the times we are able to get it right.


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Title: Re: Free quotes and system design
Post by: Luke Geis on September 04, 2014, 08:04:47 pm
Government bidding is totally different........ In most cases the rules only allow for certain things to even be spec'd. That is that even if you wanted a particular piece of gear, if the manufacturer doesn't have government pricing, they can't even suggest it to you. Government bidding is brutal......... not to mention the season that it has.

It is a totally different game. Usually cut throat pricing and for whatever can meet the spec. I think the only reason to be in it is knowing that different departments have to spend X amount of money each year  in order to maintain that spending ability. So in go orders for all kinds of anything that could be used or needed. Usually at the last minute before the spending for the year is cut off.