Category Archives: Pricing and Value

Are you really saving money?

Are you really saving moneyLiving through the recent global recession has shifted the way many of us think about the value of services and products we pay for.  In fact, value-consciousness is a rising force in the marketplace. It’s not simply that because of the recession, we’re more inclined to bargain down prices and offer less in order to feel more confident in the value of the products and services we buy.

Easy access to information online is also helping to support a more value-conscious approach from consumers.  People feel that with a list of vendors and options being so easy to find, getting someone to accept a low price offer is something everyone should do.

The result? Consumers feel compelled to bargain hunt, or make willingness to meet a low-price offer a requirement for doing business.  Often this can work against their best interests.  Just because you find someone to accept your low offer, you don’t ensure you’re getting a good deal.  In fact, the deal may be detrimental to you over time, rather than to your advantage.

It’s true that people lost financial wealth and confidence with recent crises in capital and residential lending markets.   But work life and home life continues.  Business owners still need to renovate or move into new spaces.  Homeowners need to update rooms and furniture as things wear out and needs change.  We all respond to evolving values and lifestyles.

People still look to professionals like interior designers, architects, landscape designers, and contractors to make the changes they’re looking for.

Here’s the difficulty: the cost of running professional services has not really moved down.  While income has been going down, expectations and demands from clients have been going up.

These two ingredients are like a recipe for unhappy relationships between design professionals and clients.  The professional design community needs to keep to a high standard of creativity, originality, and current familiarity with materials, techniques and styles.  Otherwise, clients won’t get the satisfaction and results they’re looking for.  And clients who want the latest, best, professionally recommended solutions expect to pay for expert design and implementation; it’s supposed to be a win/win.

But with too much stress on cost-cutting, design firms and contractors feel forced to slash margins deeply, often by letting go of more experienced higher paid professionals, and asking less-experienced staff to put in longer hours.  There’s nothing wrong with cost savings, but in the long run, what happens for the consumer?  What happens to the professional community?

In the end, the cost of excessive price pressure on professional services is paid by the client.  It raises the risk of job dissatisfaction on both sides, in the form of less design creativity, more mistakes from inexperience and lack of oversight, and ultimately in projects that  are not as responsive as they could be, because no one wanted to invest in the time and expertise needed to create the best solution.  The difference between good design and great design is that the latter needs time, nurture, and support.

Of course, despite the economy and temptation towards bare-bones pricing, there are firms today who keep busy without compromising their fees or creative edge.  This is where, I believe, you’ll find the healthiest of relationships between client and design firm.  The client regards professional fees with respect, and the designer works to satisfy – not someone who just “keeps the lights on” — but a valued and preferred client.

Are You Really Saving Money is cross-posted on iMatchDesigners; A longer version of this article was published in The Epoch Times, in a series of regular columns by Lloyd Princeton.

What is Design Worth?

Classic gilt ornaments add unique character

When choosing accessories it’s natural to inspect the price tag.  But if quality and style is just right, we may react less strongly to price.

“What’s it worth?”  That question applies to everything, from a cup of coffee to a diamond ring.  The value we give to  something depends on its market value, but also on how much we appreciate it personally.

When it comes to pricing design services, people on both sides of the design contract have expressed all kinds of reactions to putting a monetary value on design services.  Professionals have their own reasons why they can or can’t set certain pricing.

Some clients find price agreement easy to achieve, and readily pay for services and products as quoted.  And others resist every step of the way.

Confidence plays a big part in the emotions and discussion around pricing.  I’ve observed that professionals who feel more confident have an easier time asking for more money than those that did not. Likewise, clients with more confidence feel more comfortable challenging someone else’s idea of value.

Emotion has influence over price.  Ultimately, all spaces benefit from good design—and all good design has its price!

This article also appears on IMatchDesigners as:  What is Design Worth?