More and more designers are coming to accept that their clients are requesting off-the-shelf retail products for their projects. Clients are getting those glitzy catalogues in the mail from West Elm and Pottery Barn or are checking out Restoration Hardware and Design Within Reach, and it all looks pretty good to them. Ready-to-wear design.
For designers, of course, this creates a conundrum. You are accustomed to purchasing at wholesale or to-the-trade prices and tacking on a markup to cover the cost of your time and services. But how do you markup a retail product whose price is known to the client?
Lately, I have been inundated with queries from designers who are not sure how to deal with incorporating retail items into their purchasing, especially as retail prices can fluctuate. Retailers themselves have to cope with this problem. That’s why you see statements like “this week only” or “preview sale” on their advertisements.
You can’t control retail prices. (In fact, there are laws against doing that.) You can, however, protect yourself by doing what retailers do – stipulate that you will charge the cost at the time of purchase. I recommend using a “best net cost,” which is often the retail price available at the time of purchase less 10-15%, on average. You then charge your normal markup for your time and services, plus the usual taxes, delivery, etc. At a 35% markup, that works out to a net 125-130% of your actual cost.
If the client chooses to purchase the item themself, well, so be it. If not, you have a clear, consistent and justifiable rationale for your pricing that can be well documented and is in keeping with industry standards. Moreover, it’s not about the individual price of products, but about the overall budget and how everything that you obtained satisfies the client’s wish list. You can’t ask for more than that.
There you are, well into your initial consultation with a prospective client when he or she, or they, inform you that they intend to “do a little” of the work on the project themselves. How do you respond? Does your professional instinct tell you to bring the interview to a close as quickly as possible and exit gracefully? Do you thank them and refer them to a contractor? Or do you embrace the opportunity?
As I have pointed out on other occasions, like it not we live in a DIY world. And it’s not just in the area of interior design. Think of the money “home chefs” spend on commercial appliances, cookware and gadgets. Despite the vast selection of craft beers and bespoke spirits readily available, the home brewing industry continues to grow. Programs like “Project Runway” have created a market for making high fashion clothing, shoes and accessories at home.
Capable or not, some clients want to be personally involved in the design of their home. For some, it is an opportunity to apply themselves in an area that is very different from their normal work or activities, to do something “creative.” Like preparing a gourmet meal, it can be a very satisfying experience if all goes well.
You can, and should, walk away from a project that does not feel like a good fit. But before dismissing the DIYer out of hand, take some time to explore with them what they have in mind. This is your opportunity to demonstrate your expertise and to guide the client toward a good result. Explain to them what is involved in terms of skill and commitment. Be very clear about marking boundaries and delineating where you will and will not have responsibility or liability. If you and the client can come to a satisfactory arrangement, be sure you put in writing what you both have agreed to in detail and make it part of the contract or letter or agreement.
Working with, and not just for, a client can be a challenge. It can also be an opportunity to gain rather than lose a project – and future referrals. And there is always the possibility that as the client gains trust in your skills and abilities they will want to engage your services further. That “little” could turn out to be a lot to you.
When contemplating all of the possibilities available to you for structuring the pricing for your design services, I recommend you consider an option very often overlooked, or simply dismissed entirely – the package deal. If you’re among the designers that I speak to who question this approach, because you think it in some way devalues your services, or hurts the overall industry, I urge you to explore this pricing strategy a bit further with me.
Now while you can’t build an entire design practice on this particular pricing model, it is another tool in your arsenal for expanding your business by accommodating a particular niche of clientele that you might not otherwise have a plan for doing so. For example, you could run a “New Nest” package deal for the kid’s room of a young couple, or you could create a package deal for a half-day of retail shopping, consisting of a 2-hour consultation and 2-hours of shopping, after which you provide the client with all of the information necessary to make the purchases themselves. These are both examples of ways you can use package deals to appeal to specific types of customers, from new families to the DIY crowd, based on what they need and what they can afford.
If you’re still concerned that offering package deals might turn off more affluent potential clients, just realize that even some of the wealthiest Americans still shop at WalMart. The fact is, regardless of their station in life, people rarely turn their nose up at a good deal. In the short video clip below, from my recently produced “Designer Seminar Series,” I explain why I believe these are among the two best ways to close a deal.
Many interior designers I speak with express concern when charging a mark-up, even some that have been in the business for years, because they assume that their clients will immediately question how accurate their mark ups are, and that this will eventually undermine their trust.
As a business manager, I’ve learned that clients will pay what they agree to pay 9 out of 10 times, and that when problems do arise, they typically do so based on simple, honest mistakes. You truly, accidentally double charge for a cushion. So the first thing the client thinks is, “What else have you double charged me for?” Then they’ll want an accounting of everything.
That’s when you’ll need back up. Lots of interior designers use Quickbooks, because it’s easy to use and their accountants love it.
However, I always suggest designers use software developed specifically for the industry, be it Design Manager, Studio Designer or Studio Webware, to enable them to pull up reports specific to a project, down to a particular room, by PO, by invoice, to determine when something was purchased, when it was delivered and, most importantly, how much was charged.
Having access to this kind of information readily available has an incredible calming effect on clients when situations such as these arise. Sometimes back up invoices are a prerequisite required for whatever reason as part of the client’s way of doing business, like if they have a business manager or family office that requests them. So beyond your client rapport and relationship, trust sometimes boils down to how good your systems and back up are.
Interior designers thrive on new products. Collectively, they purchase more than $46 billion worth of product a year, and they are always on the lookout for something new to enhance their designs, resolve a challenge, or fulfill a client request. Unlike the average consumer, however, designers don’t have a lot of time to window shop. They look for new product when their work demands it. Instead of hoping they will find you, you need to know how to connect with them.
That’s where DMC can help. We work with some the world’s top designers. We know their challenges and understand how their business works – how and when they make a purchase, what information they need to make decision, the level of support and service they expect and require. And we can put that knowledge to work for you.
Whether you manufacture a product or operate a showroom, we can expand your industry reach. We will review with you your current marketing and distribution plans, and guide you in developing more effective strategies. We will advise you on the markets, trade shows, industry events, publications and online media where you can best target your products or services. We also can arrange opportunities for you to network with key industry sales reps, to gain further insights and inroads into this complex industry.
We have experience with a wide range of product lines – furniture, case goods, accessories and textiles – and in most areas of interior design, residential and commercial. Contact us today and let us show you how DMC can help take your business to the next level.
I don’t need to tell you how important social media is to marketing your interior design business. Any marketing expert will tell you that social media is the place you want to be if you want to be visible to potential clients and influence their choice of designer. Just spend a few minutes on any of the major platforms – Facebook, Twitter, YouTube, Pinterest, Houzz – and see for yourself.
Having a presence on social media has become a necessity, the way having a listing in the Yellow Pages used to be. It is one the first places people are going to go when they are looking for a designer. But having a presence is not enough, because the person who is looking doesn’t just want to hear from you, they want to hear from others who have done business with you to get their opinions and advice. That’s the thing about social media; it is not one-to-one, it is one-to-many. It’s not a stage; it’s a hive.
Word-of-mouth is your strongest referral, and that goes double for social media. In the social media marketplace, your brand is only as good as what others say about it. So along with making the effort to post or tweet to promote your firm and establish your expertise, you need to spend some time getting others to say good things about you. Having someone “like” your firm or pictures of your projects is fine, but what you really want are posts from clients, teammates, vendors, contractors and others who can attest to your expertise, creativity, professionalism, reliability and affability. They don’t have to be long or involved. A few words from a lot of endorsers is better than a lot of words from just a few.
Pictures of your projects and your own statements about your work speak for your unique design sense and talent. Testimonials affirm that you are someone the client wants to do business with. Together they create a powerful brand that will help you to stand out from all the other buzz in the hive.
I subscribe to Marcia Yudkin’s Marketing Minute newsletter, through which she drops a pearl of wisdom into my email inbox every week. A recent week being no different, she provided a quick thought that takes the concept of “quality over quantity” a step further, by stating, “You only need one.”
In her message, Marcia explained that the anxieties that confront us regarding a whole host of issues can be easily quelled, if, as opposed to focusing on having to secure a lot of a certain thing, we focus on getting just one. In the case of most interior designers, that would pertain to clients. Marcia’s advice lines up with the marketing guidance that I provide designers – make it personal.
In addition to websites, social media and other forms of advertising to get one’s name out there, it’s important to also concentrate on the personal approach to winning over prospective clients, by taking them on a tour of one of your recently completed project, or out for a few hours of shopping. In the short video clip below, from my recently produced video “Marketing Interior Design,” I explain why I believe these are among the two best ways to close a deal.
Affluence is in the mind of the affluent. It doesn’t matter how the numbers on the assets line read. If you are concerned about your financial position, you are going to feel less affluent. Fortunately for designers, at the moment the affluent are feeling more affluent, and that means they are starting to think about purchases they have been putting off, like home remodeling.
Results from the American Affluence Research Center’s Spring 2014 Affluent Market Tracking Study show that the wealthiest 10 percent of American households are feeling more confident about their financial situation than they were last fall. Nearly half expect their net incomes to increase within the next year, and those who do are considerably more likely to be contemplating major purchases or expenditures, including home remodeling or the purchase of a primary residence or vacation home. Only about a third said they were planning to defer or reduce expenditures during the next twelve months.
Surprisingly, those sentiments are strongest among non-millionaire affluents, according to the Spectrem Group’s most recent monthly Affluent Household Outlook. While both millionaires and non-millionaires indicated concerns about the health of the overall economy and of their own companies, non-millionaire households were more likely to report gains in household income and household assets. In other words, millionaires are feeling less affluent because they have experienced some recent loss in income or assets, but non-millionaires are feeling more flush, because they recently realized an increase in their personal worth. What matters is not how big is the rock but the ebb and flow of the tide.
Keep that in mind as you begin to plan your marketing efforts for the post-vacation design season. Your best opportunity may not be the wealthiest prospect but the prospect who is feeling wealthy.
Today’s clients have a wealth of information at their fingertips. Indeed, consumers have never been savvier, more demanding, value conscious, and connected. Just about anything they want to know about a product or service they can find on the Internet or through their extensive online networks of friends, peers and experts. For designers, this has meant the digital age has drawn the curtain back on to-the-trade exclusivity and replaced it with consumer-friendly transparency.
A side effect of all this abundance is that consumers have become inundated with information. They are spending hours skimming and sorting the daily flood of news updates, posts, alerts and tweets coming through their various devices. As the analysts at Global Trends recently noted, “The world is so digitally connected and full of information that choices can sometimes be overwhelming and opaque.”
That’s good news for interior designers, because designers excel at helping their clients make choices. Even consumers who lack the means or will to pay for full design services are turning to designers to help them navigate their way through the vast array of products and materials available in today’s global market. These requests don’t put much money in a designer’s pocket, but they suggest another route through which designers can market their services, by facilitating the clients’ decision-making process. Serve as filter for decision-making, give them fewer choices. Demonstrate why you, and not some unknown reviewer on a social networking site, can be relied upon to help them make the best choice. You are no longer the guardian of to-the-trade, but you can be the trusted guide clients are looking for to simplify their choices and confirm their decisions.
I am often baffled at the number of interior designers who still do not have websites for their firms. Word-of-mouth continues to be the best marketing tool for most designers. But these days even a word-of-mouth referral is likely to send a prospective client to the Internet to take a look at your portfolio. Do you really want to send them to Houzz or Pinterest, and straight into the arms of your competitors?
Community sites like Houzz and Pinterest are great ways to promote yourself and attract new clients. Your clients, however, have websites for their businesses, or their companies do, and they will expect you to have one, too. More importantly, your website is where you get to tell your story and to put your best work on display. You can show prospective clients what makes you unique and why they should hire you and not just a designer that happens to live close by.
The prevalence of mobile technology has raised the stakes even higher. You need a website that looks good not only on a PC or laptop, but also on a tablet or smartphone. More and more affluent consumers are using mobile devices as their primary tool for shopping and searching for information online. That is where they go to whittle down their choices.
According to Carolyn Everson, Facebook’s VP of Global Marketing Solutions, the average person checks his or her mobile phone 100 to 150 times a day. Often they begin a search on their phone and then follow it up later on their tablet or laptop. You want your website to make a good impression no matter what size screen it is being viewed on.
We are all overwhelmed by the degree to which technology has taken over our lives. At the same time, we rely on it to help us navigate our busy schedules. Your clients are no exception. Make sure that when they go looking for you online, they can easily find you. And when then do, that you are looking your best.