March 16, 2009

What Happens When You Try to Hit a Home Run?

By Paul Bieber

A customer walks into your shop, and needs something special, something hard to do, and, of course, they want it yesterday. Your heart starts racing, your head is calculating and you think you have hit the lottery. Your customer says “YES” to the number you throw at him. Now all you have to do is: convince your fabricator to change their entire production schedule just to take care of your home run.

Let’s put some numbers on this. On a regular basis, this piece of glass would normally sell and install for, let say, $975. You quoted $1,975, and you have three different ways to spend the extra grand. Your fab supplier’s normal price would be $315. You’re going to spend a little extra for O/T for your install, so what, that grand is burning a hole in your pocket. The deposit of $985 guarantees you will not loose, no matter what.

Now comes the hard part…you call your #1 fabricator, and give them the order on a rush basis, but they cannot meet the schedule your customer needs. You tell them this is an important customer, and that you hardly ever ask for specials, but they stand firm. Now, you waffle over the idea of paying them extra for their rush service, but that grand has been spent three ways.

Most fabricators do have programs like this, where for a fee, you can purchase expedited service. It usually is fairly steep, but is it worth it?

This depends on how badly you need the product. My experience, from a fabricator’s point of view, is that no matter how high we set this rush service charge, it was never high enough to cover the over time needed. For one piece of tempered, we had to keep a six person tempering team overtime for two hours. Sure, they might have been busy on other work waiting to get the item cut, polished and washed, but what happens to the profit model when the piece comes out of the oven with a warp, and it is another hour to get the replacement.

Still, we felt the need to offer this service, as so many customers had legitimate needs for rush service.

So, now Mr. Home Run Hitter calls fabricator #2, asking if they can do this piece on a rush basis, but that he doesn’t have enough money in the project to pay for rush. But, Mr. Hitter says, “I’ll start giving you more business if you do this for me”, his sure-to-win-your-heart pitch to get this at no extra charge. Fab #2, says no thanks. You, Mr. Homer, start to panic.

You have wasted three hours of lead time, trying to protect your grand, and you see it starting to slip away. Finally, not wanting to go back to #1 or #2 and admit you were wrong, you give the order to #3, pay the up charge, get a piece of glass, that reminds of why this fabricator is #3, and you keep only $800 our of your grand. Also, the customer is disappointed in the quality of the piece, and the customer says you won’t get the next piece because of poor quality.

Many glass shop owners will pay the premium price to their #1 fabricator, and keep a lesser amount. But, I suggest an even better option. When Mr. Homer quoted the job, and he had his heart set on making a grand, he should have set the up charge at $1500, reserving some extra money for the fabricator. What if the customer won’t pay that much? Here is where Mr. Homer has to make a business decision…what would you do?