There isn't a standard that I know of, and everything is negotiable. 10% of gross is pretty substantial for a referral unless it is well-vetted. I would suggest that you create your own referral offer and that way they can choose to refer or not. You could give them a bonus if they send you great referrals on a consistent basis. Without knowing more about your business or the types of clients they might refer, it's hard for me to give you much more advice. If you're part of our Business Mastery Membership, you can bring these questions to one of our 15 minute live coaching sessions and I'll help you more directly.

Hi Dawn. Congratulations on implementation. Value Based Fees do make a huge difference if you're willing to be transparent. Education is important to few clients. Your differentiator is your skill, service and personality. Once they like you and feel that you have the skills to do what they like and want, it's your service that really sets you apart. Name your services…create an emotional or real benefit of each service to explain it to them, Education is key. Ask if they watch HGTV, and if they think the budgets and time frames are realistic, then explain reality. Tread carefully so you don't insult them (I know you will) and then tell them as a professional, what it's really like. Hope that helps! Thanks for being part of DSU!

I am so glad you enjoyed it, and most importantly, this is what makes your life so much easier! I'm guessing you don't mind us using this testimonial since you posted on our blog . Thanks again for sharing your feedback. Don't you love not having to worry about getting paid?! What a shift in the relationship, and you'll benefit from referrals as well. Keep up the good work!

Hi Joylene, Here is a firm rule. Never do work without a contract. It depends on your fee structure. If you work by the hour (not my favorite for many reasons) then you discuss it in your first interview. Or, if Value Based Fees, you discuss it in the second in person meeting after you determine what the client values and what is included in your scope.

Hope that helps. Be sure to sign up for our complimentary eBook about fees and salaries. You'll then get access to a great webinar about How to Avoid Fee Fiascos…And Attract Your Ideal Client. (complimentary) http://www.InteriorDesignFees.com

This is gross margin, Lauren. I found this to be a great number for my business, and in my best years, my gross margin (before overhead) was 50%. If you add product mark-up and time billing, that's healthy. I've spoken with my CPA and a few other industry experts that work with multiple firms. The absolute minimum product mark-up, if that's the way you bill, should be 35%. However, there are many other ways to bill that can lead to much higher profits, like Value Based Fees. A net profit after overhead of 10% is a great target. The grocery industry is about volume and commodity products. Service providers have less “inventory” to sell, especially time, so the margins must be higher to make good money in the business.

If you're combining and it works for you, that's great. Most drapery workrooms do add all of the costs in to the final product cost. If you're doing more than fabrication and design of window treatments, there is more to it. If your niche is focused just on this, then you don't need to get into the more advanced Value Based Fee System. They are two different things. What you are doing is a fixed cost for your project. No need to change if it is working for you as is. I'm glad you enjoyed the presentation.

That is a tough one. Did he sign off on the order? I'd have a “sit down” with both of them together and discuss how you can find the middle ground. It won't go away without it, and could lead to near divorce over costs. There is a great book, Getting to Yes. Can't remember the author right now, but you need a little more help to work through the issues than I can do justice to in a brief reply. You don't want to leave in a conflict situation because that could hurt your reputation…you'll be the bad guy. After you come to a resolution and get paid, I'd say to them that you feel that they may be better served by someone else. (Don't recommend anyone, though!) Let me know how it works out.

Hi Tracy, I'll be teaching a class on contracts later this year, and we include a proposal template in our Value Based Fee System. However, we will not offer sample contracts at any point due to our attorney's concern that each state's statutes are different. What I would suggest is that you download our free fee & salary survey eBook at http://www.interiordesignfees…. ($79 value). That's full of great information to give you an idea of how your competitors charge.

I doubt seriously you’re doing everything wrong! It’s a matter of awareness and rethinking how you can provide an amazing client experience that is important and will totally shift your business. Please keep me posted on how things change for you. Thank you so much for commenting!

You are so welcome! The qualification process is just as much for us as it is for our clients to choose us. We have to be strong and not take bad clients. And, we have to watch the body language and ask very specific and clear questions and probe deeper to make sure they’re not just telling us what we want to hear. They don’t want to be rejected, either. If you memorize and use the verbiage I gave you, you’ll be amazed at how different your conversations are. Best of luck to you!

Excellent Lisa.  How did you find us, by the way?  So glad you came to the webinar.  

Thank you for an excellent presentation. My biggest AHA moments were the idea of a “purchasing management fee” vs. a markup, and the idea of it being all right to hold the initial meeting in a coffee shop. I no longer have an office, and have felt since closing mine that I really needed to meet a prospective client in their home despite the drawbacks.

Hi Lani,

I appreciate your feedback. Hopefully the information will help you feel more confident in your client and prospect relationships.

It is so important to use benefit-focused words.

Keep us posted!

So glad it helped, Isabel. We’re delighted to have you in our “international” members group.

Good for you! You’ll feel so much better not accepting the wrong clients.

I definitely do NOT recommend putting your fees on the site. If someone sees them and decides not to call based on what you posed, you could be pushing away potentially decent clients. They need to base their decision on whether you are the right designer for them.

Hope that helps.

“approve”

That’s a great comment! I am so glad you feel liberated. We spend so much time trying to please our clients and we forget that if we aren’t happy, that it is really not worth working with difficult clients just to pay the bills.

“approve” I’m so glad today’s webinar was helpful to you. I’ve always felt that getting one great idea from a class is time well-spent. Thanks for taking time out of your Saturday to attend.

Warm regards,

*Gail*

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Thank you Gail and Erin for a well presented and on point presentation on design fiascos. I have to say my “aha” moment was to realize I have not clearly defined my ideal client. Until now, I have always put it aside and tried to ignore it. Well, no more! It’s time to put pen to paper!

Thank you Gail and Erin for a well presented webinar on “How To Avoid Interior Design Fee Fiascos…And Attract Your Ideal Client.” What were my AHA moments? Well, as you may have guessed, there were many! Outside of creating a strong client profile and a value based fee system, how to manage the client on the phone and how to arrange the first client meeting in a neutral setting were two great first steps to transform my business practices.