When I have raised the issue of charging for design services in my seminars, I usually hear the familiar response: "Oh, I could never charge for design in my market. That's just the way it is." Well, my retort to that line of thinking is: does your lawyer or doctor give you free advice?
While consumers may have read a few articles about products or visited a manufacturers Web site, they still don't know as much about the properties, installation and maintenance of the product as you do. And while you may think you don't know much about design because you don't have an educational degree on the subject, you've still seen more floors installed (good and bad) than the customer. That might seem like a flimsy statement at this time, but think about the last time a customer said to you, "We just can't make up our minds between these two designs. Which do YOU think will look better?"
Yep, you probably heard something like that as recently as yesterday. Consumers view you as an expert on the subject. It's a subtle point, but they rely on that knowledge as a part of the sales transaction.
These days, I'd say that probably a majority of retailers employ staffers with a design background. My point is, do you charge the customer for that design service they provide? Just because the competition doesn't charge for it doesn't mean that you, too, have to give away the store!
Perhaps you've tried collecting design fees and had some unpleasant confrontations with the customer, which then prompted you to drop the fees. Let's look at how you can change the situation.
When you visit your attorney, accountant or perhaps an architect, they use an hourly formula to determine their fees. While it's a can't-lose proposition for those professionals, consumers don't seem to accept it for the design (and let's include sales) trades. Consider the case of a new house as an example.
If you're doing all the flooring materials for a new home, you know how much time this type of job can consume. First, you need to have the measurements -- and that can mean one or two visits to the job site, because ALL PLANS CHANGE and there are NO STRAIGHT WALLS! So that can translate to several hours on the job site, several calls to the builder, travel time, mileage, etc. In the consumer's mind, you just ran over to their new house and zipped around with your tape measure.
An open-ended billing (or hourly calculation) fails to reinforce the large design picture you want to project to clients. All consumers are concerned about project cost. The design phase can be described as "courtship with compensation."
Choose to begin this phase by teaching clients what you know about costs and how to manage and contain them. Once they feel comfortable with your expertise -- and only then -- can you move on in the courtship to the compensation. You may find, and probably should find, that not all customers are candidates for this service.
What I would recommend for most floor covering retailers who want to be compensated for design time is to consider the practice of charging a design fee for your services. Use a project-specific list of design services to estimate the time required and to establish a set design fee. The fee can be broken up into several invoices.
A retainer fee is an excellent qualifier and provides a clear indication of a client's desire to have you proceed. A second invoice comes with the delivery of the design concepts and could serve as a deposit for the order. If you provide any other special services, a third invoice can be presented at that time.
Also be sure to also include an invoice for reimbursable expenses. These might include printing costs, courier fees, long-distance phone bills, and copying expenses. These costs, while not expressly called out in the design agreement, can dramatically cut into your design phase profitability.
Some vendors credit design fees toward materials and installation. If you've taken care of the clients in the design phase, they should want you to proceed with the sale without further inducement. It's not real money if you take the fee off the bottom line. It's more like a "toaster to open a new bank account" rather than treating the service as the valuable and professional asset that it is.
Treat your design service for what it's worth. Develop a fee arrangement that works for your business and that you can believe in. Clearly define what the payments are and when they are due. Your clients will appreciate your clarity and professionalism. Sell your design phase services from knowledge and conviction, and I promise you success!
