3 Tips to Avoid Fee Fiascos

Are you ready to make the changes necessary to transform your business? I hope at least some of you will act on these 3 tips that can help you transform your results.

Mistake #1 – We push consumers to do business our way rather than how they prefer. Research has shown that clients prefer fixed fees – for all sizes of jobs.

The typical hourly + markup fee structure is disconnected from what consumers want Do you qualify your clients about their fee preferences? If you don’t, start immediately.

Why won’t they answer budget questions directly during your interview process? Consumers are afraid of losing control, spending more money than they planned and they don’t know what is reasonable or the realistic cost of items. So it’s your job to educate them and set expectations at the very beginning.

If moving to a fee based structure, remember, a fixed fee sets limits on their investment, but doesn’t address the underlying emotional reasons and motivations for them to hire you.

Emotional motivation is a key component of Value Based Fees which are based on results the client values – the true psychological reason(s) for hiring you. Uncovering the emotional connections to the project results is the key to winning any project…especially a Value Based Fee.

Your qualifying process is your first opportunity to establish your unique skills and why your prospects should work with you. When you qualify them and uncover their emotional motivations – their wants, needs, desires and dreams related to the project – rather than only focusing on the kind of project and scope of work – that alone differentiates you from your competitors

Mistake #2 – Answering the question, “How do you work?” before you’ve identified your prospect’s emotional reasons behind the design project and before creating rapport and trust.

If your fees are the determining factor for selecting you, it’s another red flag. This prospect is not right for you. Your job is to tell them what questions to ask and have an answer that connects to you and sets you apart from your competitors. Why are you worth the extra investment over your peers? What makes you uniquely qualified to do their project?

And if your prospect says, “I don’t know if I can afford you,” they can’t.

Mistake #3 – Not clearly setting expectations with your clients. The more bills your clients receive without seeing results, the more uncomfortable they become. Remember your clients hire you for a result and it’s your job to educate them about the design process.

Address the financial commitment with your prospects early in the relationship because, like marriages, over 50% end in divorce because of money

Discuss why you charge a mark-up in terms of the benefits your clients receive – you save them time by managing the purchasing process. You ensure their products will arrive as ordered. You will resolve shipping damage, coordinate installation, etc. Call it a “Purchasing Management Fee.”

Finally, one last tip from Peter Drucker: “The most important thing in communication is hearing what isn’t said.”

For more information on Value Based Fees, register for our webinar, How To Avoid Interior Design Fee Fiascos…and Find Your Ideal Client >>> Register Now!

Photo by Dana McGrath

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Drue Lawlor

Director of Business Transformation Coaching Drue leads our coaching and consulting. As a NCIDQ certified designer she and Gail co-developed the 12-month Strategic Business Transformation Group Coaching. The program leads the way in teaching designers how to build or redesign their businesses for profit and success. Outside of Gail Doby Coaching and Consulting she is the co-founder of Boomers with a Plan B. She is driven to help clients create a safer and healthier homes. You’ll find her in Senior Magazine and a contributor to the following books: Design for Aging: Post Occupancy Evaluations and Interior Graphic Standards, second edition.
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