Get a Retainer!

I learned a long time ago, after years of designing work for other fabricators, a very important word: "Retainer!"

I first appreciated the word at a past NOMMA METALfab convention during a seminar about patenting and copyrighting custom drawings. The presenter was a patent expert, and everything he said basically could not help me protect my company. For example, he said even if someone stamps his work "copyright," "patent pending," or "registered trademark," all customers would have to do is change the design 10 percent, and they would be in the clear (changing the color is near 10 percent).

A member in the seminar said, "We get the customer to give us a retainer, up front. This is their guarantee that they are securing our company to do their work! Also, if lawyers can get away with it, why can’t we!"

This opened my eyes to a new way of conducting business. And, when I got back home I started using it immediately.

We were fortunate that our company had name recognition in the Acadiana area and a 50-year reputation of providing quality ornamental metal products. I was a little nervous and hesitant the first time I asked for a retainer. However, I quickly got over it, and it soon became natural. You would be surprised how, by simply asking your customers for a retainer, they are not only happy to give you the money, they think that you are a professional. (And aren’t we?)

 

Over a 10-year period I used this sales tool hundreds of times, most often on automated gate entry systems. It worked well, especially when a customer or contractor called and said they were pouring concrete for a foundation of columns for a gate. One in particular wanted to know if anything was required to prepare the footings, which they were pouring in the morning! So I explained to them that there is preparation required, starting with designing the column construction, which entails steel pipe within and possibly recessed liners. They immediately wanted me to give them this information. So I explained to them that I could help them prepare their columns; however, they would have to retain our services.

 

It did not take very long for them to realize they needed professional assistance, and that we were the company for them. I also explained that if they would have come in sooner we could have designed their gates and come up with a firm price, of which we could have collected a 50 percent deposit. Since it’s hard to get a 50 percent deposit on a gate before knowing how much it would cost, I gathered enough information over the phone to create CAD drawings of the column construction and to design pipe columns. On good faith I made the columns and delivered them and the plans to the site to review with the contractor. After which, the customer handed me a check to retain our services!

 

Then at a later time the owners came into our showroom where I gathered information on their ideas and design choices. I then prepared a CAD presentation drawing and a proposal of the costs for the gate. The proposal reflected the total cost of the gate including a 50 percent deposit (less the partial retainer we already received). We collected the balance of the 50 percent deposit at that time and the remainder on completion of the job. It was a very sweet deal, and this scenario happened often!

 

We also used this sales technique on hand sketches or CAD drawings created in our showroom when a customer would come in for a price. If the customer gave me a retainer, I would release the drawings. I would also explain that no sketches or CAD drawings could leave our showroom until a job was secured. More often than not the customer would give me a check and leave with his or her gate design. This sales technique also acted as a way to qualify the customer. As always there are exceptions to the rule. I do recall one customer who sincerely wanted our company to do the work, however felt our retainer was out of line. So we negotiated the amount, basically cutting it in half. Even though I cut this retainer in half I felt great that my customer was walking out of my establishment with his CAD drawings, and he was happy. I did not have any stamps of copyright, patent pending, or registered trademarks on his drawings. However, I felt secure knowing I had a nice deposit!

Cash retainer, in my opinion, is the best way to take care of our customers, and our companies! I know that this might not work for everyone, but it worked for me.

 

**Article originally ran in the May/June 2004 issue of O&MM Fabricator.