#5 of 10 Biggest Mistakes Interior Designers Make With Fees

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Not offering tiered pricing and services.  The model of offering an hourly fee and mark-up is one of the least effective ways of working with clients today.

Even if you offer a fixed fee for your clients, have you considered offering three options so your clients can decide what level of services they want?  You will find that they will select the middle or most expensive option when they see the added benefits.

If you don’t offer a tiered pricing structure, you’re likely to leave a lot of money on the table.  Many of these additional offers may take little of your time and add a huge amount of perceived value.  Make sure they are aligned with the main offer.

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  • Jacqueline

    Excellent point. How would you differ the contents of the 3 options to offer? How would you cap each level of service and based on what services each?

  • Cathyblue

    This has been an interesting series and I look forward to more information on the tiered pricing structure. Are you going to discuss this option in your webinar? I have been successful with an hourly fee structure plus mark-up but I am open to changing if it allows my clients a higher level of comfort with my design services and more ease of billing for me.

  • http://www.designsuccessu.com Gail Doby

    We'll be talking about this in the webinar…don't miss it.

  • http://www.designsuccessu.com Gail Doby

    Good Cathy! It's so important to understand that many of us are missing a golden opportunity to work with clients that have unexpressed wants, desires and fears. That's one reason that we don't close all of our prospects. They fear the unending billing for work. Does that make sense?

  • http://moretimauraondesign.blogspot.com/ Isabel de Yzaguirre

    Hi, Gail:
    it's my first comment in DSU. I think this option could be of great help in a market in hugh recession as is the Spanish one by now. You give grat advice, thanks!!!

  • http://www.designsuccessu.com Gail Doby

    You're our first poster from Spain, Isabel. Welcome! Let me know how these ideas work for you.

  • http://moretimauraondesign.blogspot.com/ Isabel de Yzaguirre

    I’m reading your posts and taking advice for my future. USA market always is in advance to ours, so I consider your advice about tiered prices and Value Based Fees, which I don’t know. I think these could work well in a market where hiring an Interior Designer’s services is no very usual. As I said, we are suffering a deep recession. So we need good srategies.

  • WeinerDesignGroup

    Good Afternoon Gail & Erin
    I am truly enjoying your website! I have recently branched out on my own starting an Interior Design Consulting & Services company in the MetroWest/Boston Area and many of your topics are questions I have asked myself.

    My first “client” was not very understanding of WHY I wouldn't start the job without a signed contract and retainer. It took 3 weeks of back and forth conversations to finally “seal the deal”… I learned from past employers “what not to do” and insist on building my business the right way from the very beginning. Not so easily done during this tough economic time… It's great to hear from other designers that I'm doing the right thing!

    I'm very interested in learning more about offering a tiered fee structure.

  • http://www.designsuccessu.com Gail Doby

    Yikes! When a client doesn't want to sign a contract and give a retainer, they aren't committed. Don't do any work! They will find ways of not paying you. I've heard this happen many times! We'll talk about fees on the free March 2nd webinar. I do hope you can make it! Stick with your guns. You're doing the right thing.

  • http://www.designsuccessu.com Gail Doby

    Hi Isabel – our market is just starting to see a recovery, so we feel for you. Yes, a tiered structure could help, but it is only one piece of the puzzle. How do designers work in Spain? We are doing a free webinar on this fee ebook and the subject of fees on March 2. I hope you can make it. We'll send you an invitation.

  • http://twitter.com/isayzainteriors Isabel de Yzaguirre

    That's very kind of you, Gail! Of course I'm interested. I depend on the time difference between Spain and USA. Please could you give time details and how a webinar works, for I don't know.
    I'm not working for myself, but in Spain it's usual to price the project's value on a percentage over the estimated final price. If the final price grows, the percentage grows also, and that can be very troublesome with clients, though they pay successive percentages of the final bill.I'ts easy to have conflictive relationship with clients… and to end in Law Court. We have mark ups also, but usually they are “hidden” in official price of products. Providers and Designers arrange about that without the knowledge of clients. but if client knows, I think that could be very embarrassing.

  • http://www.designsuccessu.com Gail Doby

    Hi Isabel, when you sign up from the link in the invitation, you'll receive information about how to attend the webinar (you'll be able to see my screen and hear me through the computer). You can listen through your computer's speakers or a headset. It's free and easy. Yes, that is a common way to price projects – more typically for architects. There are many other ways to price jobs than that. Also, in our country, the associations require that you tell your clients all of the ways you are compensated including a referral bonus, etc. Yes, it would be embarrassing, and in our country, it could result in an ethics violation being reported. Either way, it destroys the trust and credibility with the client. Thank you for sharing your experience with us.

  • http://twitter.com/isayzainteriors Isabel de Yzaguirre

    Hi, Gail:
    I'm interested in knowing diferents ways of pricing that are usual in the USA for Interior Designers, their advantages or not etc.
    Thank you very much!

  • http://www.integralcolor.com/ Barbara Jacobs

    Thanks for the great topic. As a color consultant for interior and exterior locations of all types, I don't often do purchasing on behalf of clients. However even as a consultant I have recently revised my pricing to reflect the “tierd pricing structure” (and I try to make not a Tired pricing structure!) I start with a base and offer options.
    I've worked on developing a few 'packages' that are fair and offer benefits to both sides of the relationship, since that's what my practice is all about — developing relationships.

  • http://www.designsuccessu.com Gail Doby

    I appreciate your humor, Barbara. How has that changed your conversation and relationship with your clients?

  • Margaret B

    Love this idea! I have a custom window treatment business and have used this tiered pricing for “package options” and the client usually chooses the more middle or most expensive – including trim, hardware, maybe a more expensive fabric. Pricing is something I am always evaluating and fine tuning. I look forward to learning more in your March 2nd webinar.

  • http://www.designsuccessu.com Gail Doby

    Terrific…glad that rang a bell with you. It will be an interesting webinar. I've been working on it for a few weeks…all of the blog conversation and conversation on Facebook will be used to enhance it. Thanks for commenting, and have a fabulous weekend!

  • ellendunn

    This topic of tiered fees is important to me. Since I cannot make the webinar, I'm hoping there will be a recording or a transcript. Please!

    This topic is of great interest to me. However the time for the webinar does not work for me. Will there be a recording or a transcript??

  • http://www.designsuccessu.com Gail Doby

    Yes, we will provide a recording of the call to anyone that signs up for the free eBook and wants to come to the webinar. We'll send it out as soon as we get it from the recording company. Here's the link to sign up if you need it. http://designsuccessuniversitycoachgaildobyment…

  • http://www.designsuccessu.com Gail Doby

    I hope you can make the call on Tuesday. We will talk about this.

  • http://www.designsuccessu.com Gail Doby

    Each project is different, so there isn’t a perfect answer that covers all projects. You’ll uncover what your client wants and desires during your interview, and then it is up to you to come up with three options that meet the basic level of services, intermediate which includes services that are really necessary to complete the project and a premium service that offers an “aspirational level” of service based on what you could do if you were really providing the concierge level of services.

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