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.
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.
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 20-30 hours in setup time.
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 overflow work, if they ever had the need.
We’ve learned over time that if we want to attract the ideal client, then we need to see who is willing to buy in to 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 it’s 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
While I can understand a hesitancy to fork out a couple thousand dollars, the potential upside for component manufacturers is 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! Follow the link below if you want to look at starting an account with GDI!
Design Manager / Sales – 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