In my last post I pointed out several indicators that suggest business is likely to increase for interior designers this year. You may be thinking, therefore, that perhaps this is the time to raise your fees, before those inquiries start coming in from clients. The start of a new year is often a good opportunity to implement a fee increase. But before you do, consider some other factors as well.
While clients are accustomed to businesses raising prices or rates at the beginning of the new year, they are not always willing to go along, especially if they feel the increase is not warranted. They may jump ship and decide to try another retailer or service provider instead. So, one question to ask yourself before you announce a fee increase is whether your clients feel that your value to them also has gone up. Since we are not yet in the peak spring design season, it may be too early for them to envision or recollect the many benefits they will reap from your professional skills and expertise. It may be better to wait a bit longer until the design media helps by creating a greater sense of urgency. Then, when you meet with the client you can inform them about your fee increase and the reasons for it.
Another factor to consider is competition. Today designers are not just competing with other local designers. There are online designers, designer listings on platforms like Houzz and Pinterest, design software and apps, retail designers, and contractors and remodelers—all competing the for the same pool of potential customers. If your clients perceive, rightly or wrongly, that they can get the same service or result for less, why would they want to pay more? However, if you know that your clients value your work and want the look and/or service only you can provide, then you have an edge and can charge a higher fee.
Whenever you decide to raise your fees, be sure to give clients plenty of advance notice. Never attempt to apply a fee hike retroactively. And do not raise fees exorbitantly all at once—a good rule of thumb is between 10 and 20 percent, depending on market conditions. Clients usually will accept a reasonable increase, if it is presented properly.