I make my letters the rag quilted way (of course).
I made my grandbaby her name:
Then I started adding the letters to my rag quilts to personalize them:
When I make a quilt with name letters I make the rest of the quilt first the usual way. I do the letter part last.
I add the letters to the quilt is in two ways.
If the name is small enough I will center the fabric letters inside the squares
or
I will add a coordinating flannel strip the same size as the squares (usually 9") and center the name letters on that.
I usually try to use the same fabrics that are in the quilt for the top layer of the letters then the 2nd and 3rd layers of the letters are always a solid flannel. You can do just 2 layers for the letters too but I usually do 3 layers for the letters sewn on top of 3 layers of the quilt square.
BTW: It is much easier to put a letter in a square than it is to sew them onto a strip of flannel.