Why Do We Charge a Setup Fee?

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It is not unusual for the initial contact with a prospective client to be going well until I mention that we charge a $2,500.00 setup fee. I typically find the conversation turns cold or the prospect asks how we can justify the fee. The question is certainly valid and I’ll take a stab at answering it here.

Sales

Recouping some of the cost of sales is one factor. It is common for our salesman to spend 5-10 hours speaking and corresponding with a prospective client prior to any agreement being in place.  The setup fee helps us recoup that effort.

Setup Time

While truss companies are—in general—similar, they are not the same. A significant amount of time is spent creating, revising, and finalizing the Design Criteria used by GDI’s design team as well as put together other related documentation, phone calls and correspondence with the component manufacturer, running test jobs, checking and verifying settings with the client, etc. There could be 10-20 hours in setup time.

Training Time

Our designers work with multiple customers who each have their own unique Design Criteria and processes. It is very important to train them on all new accounts and training takes time. Training could take 10-20 hours depending on how many designers and how unique or difficult the client’s Design Criteria is.

Asking for Buy-In Creates a Filter

Yes, we are looking for buy-in from our clients. It is not uncommon to put all the effort into getting a client setup, designers trained for the account, and then sit idly waiting for them to send work… which never comes. What was the problem? The problem was that the prospective client wasn’t looking for a partnership, they were looking for an insurance policy… somewhere they could send work in an emergency. We are not an emergency service. However, for established clients who have an established and consistent workflow, we will be there for them when they have those emergencies!

We’ve learned over time that if we want to attract the ideal client, then we need to see who is willing to buy into the idea as well as our service. The setup fee helps deter clients we don’t want, which helps us focus on the clients we do!

Vetting Goes Both Ways

It is common for the customer to have a process for vetting everyone who works for them, including offsite design services like ours, what isn’t always understood, is that we have a vetting process as well. Not every sale is equal. Some businesses cost more to work with than others. Our goal is to find out who we can deliver exceptional design services to, be considered partners in that businesses growth, and have a mutually beneficial relationship.

A Small Price

Any prudent manager will count the cost before investing thousands of dollars. The potential upside for component manufacturers in using an offsite design service like ours is can’t be ignored; a multiplying of their design capacity without the cost of hiring a recruiter, candidate vetting by senior management, training, payroll costs, and insurance!

Considered this way, I think component manufacturers will see it is a small price to pay for an experienced partner in fulfilling their truss design needs! Follow the link below if you want to look at starting an account with GDI!

Tim Hoke

General Manager – Gould Design, Inc.

 

If interested in starting an account with us go HERE

If you would like to apply for a contractor design position go HERE

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