29: Don't Price Another Project Before Listening To This Episode!

And I mean that! :)

In this short but powerful episode, I am sharing with you some insights that I shared during a coaching session recently with a student of mine. The student was having issues with clients trying to dictate the investment amount of projects and even my student's design fees! 

As you can tell, this doesn't bode well with me, but the blame is on us as business owners to educate our future clients on how operate our companies, particularly how we price our products and services. 

In this episode you will learn:
💲How to discuss investment amounts with clients so that everyone is happy
💲How to choose a service category for every client
💲Why you need a set of deliverables for each type of service you offer
💲The BEST time to create your services (hint: it's not when you think)
💲How to TRULY serve your full service design clients

This episode might be short but it's PACKED full of juice! Now, grab a pen and paper and settle in for your own private coaching session with me!

Enjoy!

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Transcript

If you're having trouble pricing your services and trying to put everybody into that full service category, stop right now, come up with different levels of service and establish what the deliverables are for those services. Then the price range for those services. And then you can move different clients around into those services as they need to be moved around.

So they're still getting you. They're just not getting as much of you in all of the other services as they would in the top tier, full service, everything, kit and caboodle, full service design. Hey y'all you're listening to the designer within episode number 29. I'm John McClane and welcome to the designer within podcast, the business minded podcast created for creative entrepreneurs by a creative entrepreneur.

That's me. I know firsthand the challenges, but also the victories that can come with our careers. And I'm here to sip and spill the tea with you. It's time to dive deep within yourself and redesign your own business and your life from the inside out. Together, we will uncover secrets and share valuable insights.

So prepare for a transformative experience, my friends, because it's time to unleash. The designer within. Hi everybody. Happy new year. Happy 2024. How are you? Are you easing into 2024? Are you jumping in in full force? How is 2024 treating you so far? It is here, whether we like it or not, right? So let's just do this thing.

I'm glad that you're with me in 2024, and I'm glad to have you back on another episode of The Designer Within. Next week is our 30th episode. Wow, I cannot even believe it. This is episode 29, and they are just It's amazing when you do these every week, how fast the time does fly, but I'm having a ball doing it and sharing information with you.

And speaking of sharing information and giving you a little behind the scenes sometimes of how I coach my students in my programs, today is just that. I actually just finished coaching a student and I wanted to share with you some of the information that I coached that student on. Because it was particularly interesting to me because it's centered around pricing and preconceived notions that clients have with pricing sometimes and how we let that dictate our pricing with clients and how we let that client sometimes tell us what the pricing should be for a project.

And this really resonated with me because as a young designer, I also did the same thing. And I do not want anyone else, including you listening, to let anyone, including our clients, who we do dearly love, to dictate pricing to us because they do not know our business. They do not know how we come up with our pricing.

They do not know the formulas that we use or the schedules that we follow. And it is up to us to educate our clients on those things. So this particular one on one coaching session with a student of mine was around just that. It was about trying to Basically squeeze a client into a budget, into an investment amount that they really shouldn't be in.

And it's only because that client told my coaching student what amount they wanted to spend and then my coaching student felt it was their burden to fit that client into the category. And that did not sit well with me. So after that session, I wanted to share with you some of that information and let you know what I shared with them and give you some of those takeaways that you can apply hopefully to your own businesses.

And really this applies to any business, not just interior designers. I will say this is a shorty episode, but it is a grab and go. Lots and lots of takeaways in this one. And the latter part of my discussion, I'm going to chat with you about your service offerings and how you can actually fit clients into different service offerings and why every client should not be in your top tier, your top level service of interior design.

So let's jump into this episode and let's learn about how to set parameters around our pricing and how to set those same parameters around our services, but yet still give our clients the best service possible for our company. I hope you enjoy. It's not our job to figure out a way for people to afford things and to squeeze them into a service that they should not be in.

That's not our job. Our job is not to try to. Scrape off pricing from our own services and lower the price of what we're charging someone just to fit into the client's budget. If a client comes to you and says, Oh, my budget is 50, 000 and you know, you know, deep down that that project is going to be at least 100, 000, possibly 125, 000.

And somehow the ego of us gets involved and we think about, Oh, this is going to look so great on our website or so great in a magazine. Okay, let me just. Take off a little bit here and a little bit there, or maybe, maybe I can do this first phase for free and come in and just charge for the second phase.

Or maybe I'll just add a little bit less for my procurement services. No, no, that makes no sense whatsoever. It's not our job to make a client afford things because they had a budget set in their head. Their budget's probably wrong. It obviously is wrong. How many times have you had a client come to you and they say, this is what I want to spend.

And they're probably basing that off of what a friend told them, what a Google search told them, some old, old, old article that they read, or something that they saw on a television show that was totally inaccurate. So it's okay to listen to a client and say, I hear what you're saying. However, in my experience, this is what a kitchen renovation project costs.

You're looking to spend 75, 000 up to 300, 000, depending upon your level of taste. And you can pull out examples at that point and show them. What a typical kitchen would cost or a living room would cost. And I think examples work really, really well when you are trying to relate something to someone and getting them to understand why and what you're speaking about, but again, do not ever, ever adjust your pricing.

and give the client the same level of service for a lower price than you had already quoted. It's going to make you look unprofessional. It's going to make you look like you're not really worthy of what you were charging to begin with if you're lowering your rate. And I want you to come up with a rate and stand by that rate and give all of the wonderful, fabulous deliverables that you are going to give to that client and sell them on the fact that that rate is this.

But listen, if you don't want to do this full service design, oh my gosh, I have this great designer on demand, or you can choose our creative services only. There's many, many other options, but I just want you to not try to, uh, what is it? Put a square peg in a round hole. There's not a way to make a client's budget work on every situation.

It's just like going into a car dealership and saying, I really love that Mercedes, and the price point says 75, but my budget's only 50. So can I get it for 50 and they're going to tell you to take a walk and they're not going to do that and we should think about that with our own services as well because that's the exact same situation.

No person with any qualifications who is selling anything is just going to lower the price based upon someone's asking of them to lower that price. So stand by your price. Also this, a lot of us get into our own heads. It's about the affordability, air quotes, of design and this is something that's a bit of a mental struggle because I, I know that if we think about it, it feels weird to say that you can't afford your own services.

And I can say that as well. And it's confusing to our brain sometimes to ask someone else to pay that amount. And that is something that we really have to separate that narrative in our head. We have to pull ourselves away from that. And extract ourselves out of that from the price. So the price that you're presenting to that person.

That's a different person. What is expensive to us is not expensive to someone else, and what is inexpensive to us is not inexpensive to someone else. So stop putting the narrative in your head that what you think is expensive is what someone else is going to think is expensive, or what you value is what someone else is going to value or not.

And just because we cannot afford, most of us, our own design services and product, with all of the procurement services fees added on top of that, and the warehouse fees, etc., does not mean that there are not people out there who can. So stop putting yourself in the position of your client and realize that we are serving a luxury market.

Even though we ourselves might not be a luxury client. I spent a lot of time coming up with the different services. I just think it's important to have other services that your clients can go into because full service projects are not the only place to put a client and most of us think that oh we have to have only full service and that is the only offering we can offer to a client.

We have to give Every single thing to every single client. And frankly, most clients feel that way too. Most clients will come to you with their own preconceived notions of, Oh, okay. Every designer works this way. They're going to be at my house every week. They're going to give me their discounts on their products.

They're going to be there for deliveries. They're going to do the installation. They're going to do the accessories. Unless you define it, that's what the client perhaps may think. By having these clear definition of services, you can take clients and move them around wherever you want them. So you can give them whatever service they can fit into.

And that's perfect for them. But if you present a full service plan to a client and you present all of the things that they get with that, they get project fulfillment, they get you on the job site, they get you shopping with them. They get all the creative services. You're procuring things. You're putting things in the warehouse.

You're there for the installation, all of the things from tip to toe, everything is included, that's full service. And then you give them the price and their eyes bug out and the deer in the headlights look, that's perhaps not the service for them. And if they try to start negotiating with you to get that same level of service for a lower price, stand your ground.

That price is for that level of service. I understand it's a lot of money, Mr. Client. However, if you want to change some things, I know what we could do. We can move you into this service. And that is just our creative only. And in creative only, you don't have to worry about paying the project fulfillment fees.

All you're paying for is our creative services. Now, I will tell you, you have to handle all of the procurement. You have to handle all of the warehouse. You have to handle all of the installation. And by the way, by the time you tell the client all of these things, they're normally freaking out because they don't want to handle those things.

And then you just look even more valuable to them when they realize all that you do do for them. Again, you're not trying to put everybody into that full service category, and that is my number one recommendation. If you're having trouble pricing your services and trying to put everybody into that full service category, stop right now.

Come up with different levels of service and establish what the deliverables are for those services, then the price point, the price range for those services, and then you can move different clients around into those services as they need to be moved around, so they're still getting you. They're just not getting as much of you in all of the other services as they would in the top tier, full service, everything, kit and caboodle, design services, full service design.

The other thing I wanted to mention is this. The best time to create your services is when no client is attached. So make your services now. Create all of your different service offerings now. Don't wait until a client comes up to you and says, Oh, I'm ready to work with you. Then you figure out which service category to put them into.

No, come up with those now because there is no client. There's no emotion. There's no, oh, I love this project or I love this house or this client is so sweet or everybody in town knows me. No, there's no emotion attached to it. You are creating your pricing. Imagine like a McDonald's, you know, there's a restaurant, there's the menu there.

They're not going to change the price or make up the price when someone walks in and says, I want to order a hamburger. No, the pricing is there ready to go. When someone comes in, that's how you should do your own services as well. Once you define what services you want to offer so that you could put people into different areas, no matter who contacts you, you can get a little piece of the pie, a little piece of your business, a little piece of what makes your business special, that special sauce, then they're getting something by working with you.

If you make these services and come up with the price points for these when there is no client and no one is asking you for the price, first it's so easy just to pull out that pricing sheet and tell them what the price points are for those. You give them a range or you can have an exact price in the case of a designer on demand.

You go to their house for three or four hours and this is the price, 1800 bucks, done and done. Or your minimum price for your full service design could be 50, 000. And if the client says, Oh no, I never even wanted to. Spend 50, 000, then you know right away that they are not a full service client. But sit down and come up with these services when no client is even involved in the decision making.

And then you stick to them when you present those services to the client. Those are done. These are my services. They're like Moses's tablet. They are written in stone. They are etched. They're not moving. They are staying there. This is my price. This is my deliverables for those. And then you can guide them as to where they fit into that level of services.

You also have to make sure that you are defining what you are providing to your clients for each service. So give them a set of deliverables for each service under each category. Don't just say I'm doing designer on demand. Nope. You give them all of the deliverables that's with that so that there is no question about what.

What's going on with that service and what you are providing to them. You also have to know what you're doing. So if you are providing full service design, you have to provide CAD plans, construction documents. You have to know if you're giving them renderings. You either have to be able to do that or you have to have a service that you partner with or bring on the right people to get the job done.

But just make sure that you are giving them a clear, clear, clear definition of what each service is that you are providing to them. When you are pricing your high end luxury service and by luxury service, I'm talking for most people, the quote unquote full service design. Most of us call ourselves full service designers.

And then again, have really no clear definition of what that is. So please have a definition of that and a set of deliverables. But when you are defining that. And when you are pricing that definition of full service design, your top tier, your best plan, where you do every single thing for that client, this is the ideal client, this is that wonderful project, this beautiful house, this is going to go into magazines, on your website, price it so that you can give your client all that you can, right?

You have to believe in what you are providing. When you are charging enough, for your services and that you are giving them every bit of you for that project within the boundaries. Remember that you have set for them. But when you are coming up with the pricing and this is your top tier service, and if people do sign up for that highest level of service, then by golly, they are your people because if they abide by your rules and the boundaries and the deliverables that you're set and the timeframe and how you run your business and the price that you've set for all of that.

If they say yes to that, then they are your client. They deserve that luxury level treatment. They deserve that top tier treatment. But if you are underpricing that, then what's going to happen is you're going to get a lot of people who feel that they are that client, but they're not. And I've had clients in my early part of my career where I took on everyone and felt that everybody needed to be in full service design.

And I can tell you firsthand that they do not. But if you come up with this price where you can deliver your best, amazing services to your clients in this full service design plan and give them everything you have and whatever you need to do on the fly, then you are going to find more and more and more of those people because they are going to see all that you're doing for them and they're going to refer other luxury clients to you because you are literally taking things off of their mental.

Plates and making their lives so much easier. So you have to price that accordingly. And, and remember, again, everyone should not fall into that category. So there you have it. You have a little behind the scenes of how I coach my own students and the things that I discussed there. I really do care about you and care about your business and want you to succeed in the most optimal way, which is why I share this information with you.

And I hope that you were able to have lots of takeaways and lots of aha moments, and maybe some things that you need to correct. in your pricing model and correct in the way that you perhaps are not providing deliverables to your clients and things that you are maybe again trying to fit the wrong client in the wrong service model.

But review your service offerings and really think about what you are providing to your client. And if you are possibly putting the wrong client in the wrong service category, which truly, truly is a disservice to everybody involved. So I hope you enjoyed this shorty episode. There's a grab and go episode.

And again, I hope you found lots of takeaways to apply to your business right now. And if you did like this episode, please share it with a friend, let them know about this podcast. It helps us all to grow as a community. And until the next episode, make it a great week. Thanks for sticking with me to the end of the designer within podcast.

It means the world to me. If you're ready to dive deeper into the topics that we've discussed here, be sure to check out my online coaching and courses program, DesignSuccessAcademy. com. Here I will teach you everything you need to know to run your interior design business from starting the project all the way to the end, including marketing and pricing your services for profit.

And for more information on this podcast, including how to be a guest. or my design services in general, go to johnmcclain. co. That's johnmcclain. co. See you soon, friend.