Interior design is typically a big expense for your clients, many of whom are financially savvy and have learned that it pays to negotiate on such larger expenses.
And if you’re trying to land an important client or a big project, the temptation to give special discounts can be significant. This is especially true when clients ask for discounts directly, or if you’re still trying to make a name for yourself in the interior design world.
However, I’m of the strong opinion that discounting standard rates is very harmful to your business in almost every possible scenario.
The damage from discounting goes way beyond the cash cost of any initial discount. It corrupts your brand, increases the chance that the clients will interfere too much with your work, and throws a wrench into your internal operations.
If you’re on the fence about discounts, I hope you’ll let me try to convince you of their danger.
Discounting Corrupts Your Luxury Brand
For interior designers, the brand is everything.
A strong sense of personality is what attracts people to you and sets you apart from your competitors. It’s what convinces clients that you’re worth the high price tag and makes it a no-brainer to work with you instead of someone else.
A big part of your brand is your unique design aesthetic, as I’ve mentioned before. But it’s also important to brand yourself as an exclusive service, one it’s a sought-after privilege to obtain and that can’t be easily obtained elsewhere.
I wrote a post on the importance of positioning your design as a luxury service, but to sum up: Discounting does not send the message that your service is exclusive and unique. On the contrary, it sends the message that similar services can be obtained elsewhere for similar or lower prices. It also sends the message that you do not, in fact, have other clients waiting for that same calendar spot who would be happy to pay full price.
[content_upgrade cu_id=”17297″]Another way to help provide a luxury experience is to cut out middlemen retailers. Learn more: The Case for Working Directly With Manufacturers[content_upgrade_button]Click Here[/content_upgrade_button][/content_upgrade]
When you start sending the message that your service is a commodity, you’ll find yourself dropping your prices more and more, and attracting bargain shoppers instead of quality clients.
Remember: You are an expert who works with her clients one-on-one and creates beautiful, completely personalized results. Enforce that message by refusing to lower your standards and fees.
Discounting Encourages Bad Behavior From Clients
Offering discounts also begins to subvert the client relationship. Instead of them seeking advice from you, you start to seek approval from them.
The best interior design client relationships are ones where the clients trust your expertise and are happy to get it. By discounting, you shift the dynamic to one where they call the shots, which can play out in many harmful ways. They may feel entitled to quibble over design details, haggle over prices for specific decor pieces, and generally expect too much of your personal time.
Of course, this behavior will drive your profitability down even further than the original discount did.
I’m not suggesting that you shouldn’t be open to your clients’ feedback and input. It’s important that they love their living space, and lines of communication should be open. Hopefully, you can get a deep knowledge of their expectations and needs upfront, before you’ve done any work on an initial concept.
But there’s a fine line between your client expressing some general concerns and stepping into a designer’s shoes, doing things such as suggesting color and fabric changes or being too aggressive with their revision requests.
Discounting Confuses Operations
Interior design may be an art, but running a business should be more like a science — at least when it comes to the finances and systems. My primary goal as a business coach for interior designers is to get you to step into your CEO shoes and focus on the numbers, the implementation process as much as you focus on the design. The business side is just as important as the design side and as such, you need to put in some serious effort to get good at it.
A big part of staying profitable as a “creativepreneur” is standardizing and even outsourcing “back office” procedures that distract you from the core work of design and big-picture thinking. Repetitive tasks should be standard and automated so they’re not distracting. You must learn to gauge for yourself the moment when you’ve reached the point of having a certain amount of work that could be done effectively by someone else. By someone else accountable for that work, you free up your time to stay focused on the things that draw you closer to your vision and goals.
- Marketing efforts should be ongoing, and tactics should be repeated consistently from week to week and month to month.
- Booked engagements should go into your calendar the same way with similar timelines based on your experience with similar projects.
- Initial design presentations, contracts, and invoices should be compiled in a standard way each time, using standard templates and workflows.
Designers already have to do a significant amount of extra work prior to landing the job, and adjusting pricing for each client makes things more complicated.
[content_upgrade cu_id=”17297″]Don’t Miss: The Case for Working Directly With Manufacturers[content_upgrade_button]Click Here[/content_upgrade_button][/content_upgrade]
Plus, once you start making special exceptions with the way one process is billed, will you do that for other clients? What happens when that client starts referring their friends and mentioning the discount you gave them?
It’s easy to see how any benefits originally obtained with discounts start to disappear over time.
How to Respond to Client Discount Requests
Clients may not ask for a discount directly. They ask about your mark up. They may wonder about your “trade discount” or your “margins.”
Before you respond to such inquiries, try to the heart of why your clients are asking these questions.
It’s possible, for example, that they heard somewhere that it was something they should know, or they think it’s all part of the due diligence in choosing a design partner. But in other cases, their sole aim is to knock down the price tag.
A confident response will say a lot about your business. You’ve surely thought a lot about how to structure your pricing so that your business can stay profitable. Emphasizing that you use a standard procedure for pricing can help clients understand that the prices you have presented (or will present) are not arbitrary.
Your response could have the following components, depending on your unique situation:
- An acknowledgment that healthy businesses need strong profit margins. “I aim for at least 30 percent profitability on each project to keep my doors open and to hedge against the risk of any problems.”
- A note that higher prices come with more value. “When you purchase through my design firm, we take care of the inspection of each piece, any assembly, and any customization. We deliver it along with the rest of your pieces for your convenience.”
- A counteraction of the perception that you’re hoarding deep discounts. “In fact, the discounts that independent designers like our firm receive on retail products is insignificant compared to the discounts that big retailers can negotiate for. However, it’s important to know, the trade pricing we do receive is extended to us because we handle the intricate details for items ensuring the result is to our specifications. Our pricing strategy has given us __ years in business and more importantly allows us to be here today – for you.”
Finally, as I mentioned in my post on How to Price Your Interior Design Services, it’s not your job to do people personal favors.
Remember that it’s OK to say no to clients or projects that you don’t want to work with, including those who aggressively seek discounts. Listen to your instincts. Remember that working with clients who understand your value and respect your time will yield great returns in the form of lower stress levels and a more interesting portfolio.
[bctt tweet=”Clients who understand your value and respect your time will yield huge returns, less stress, and an amazing portfolio.” username=”idmasterclass”]
If you’d like some help attracting great interior design clients and pricing your services to stay profitable, I’d love to hear from you. I work with designers both one-on-one and in small groups to help them meet and surpass business goals. Use this form to contact me directly.