Are you able to charge the fees you think your services should command?

The July issue of Interior Design magazine featured the “2013 Rising Giants 101-200” – in other words, the second group of 100 interior design firms by fee billings. Once again, firm principals cited the dominant issues of concern had to do with not being able to obtain the fees they felt they deserved. So, I’ll ask you how you feel about this subject: Do you feel you’re being paid what you’re worth? Or do feel as though your services have been commoditized? The answers I hear to these questions never cease to amuse me. I ask every client I consult with the same questions and the answers follow the responses Interior Design received in their survey: “I have trouble convincing clients to pay the fees that it is going to take me to provide the services they want.” “Clients treat our services like a commodity; they don’t see the value in what we do.” “I struggle to make ends meet. Our clients have no sympathy for what it costs to do what we do.” Sound familiar? These answers could be coming from anyone in the architectural, engineering or environmental fields today. After all, we hear that times are still tough. The economy is still in the doldrums. But wait a minute, the Dow Jones Industrial Average continues to hit new highs. Somebody must be doing alright… like our clients. So why are they unwilling to pay us more? Despite the whining from the present administration about the devastating effects of the sequester (OMG, cutting 4 percent across the board is going to shut down government services; we’ll have to stop conducting White House tours), the private sector has cut 4 percent out of the cost of their business more than once during this recession while continually improving the quality of their products and services. Hello!? The businesses that we solicit for our services are running lean. They drive a hard bargain for every product or service they buy. That’s why their earnings and stock prices are at all-time highs. So wake up and be grateful that you have clients whose businesses are thriving. And understand that they’re not buying services from you just because you’re a nice person, nor are they going to pay you what you ask just because you think that’s what you’re worth or because that’s what it costs you to run your business. They’ve learned to run lean, purchase discerningly and seek value in all transactions. They’re going to pay you what you’re worth… to them! Your challenge is to figure out how to make yourself worth more to your clients. Here are two ways to define and enhance your value proposition in a way that clients will see value in – for them!

1. Become the industry expert in your client’s sector. This means truly becoming known, through research you’ve done, papers you’ve written, speeches you’ve delivered, in your client’s business. Own the knowledge about the sector; be able to benchmark your client against competitors. Know what their competitors are doing. Know how the place you’re going to make or the systems that are most appropriate are going to affect your client’s business performance. Be able to describe what other similar businesses have done and how what you can do will make their enterprise work better. Think long – define how your design solutions are able to adapt and respond to industry changes over time. Know what changes your client should be anticipating. In other words, you will be worth more fees to your client if you are able to provide them with knowledge, information and ideas that no one else they will speak with can.
2. Be able to quantify the impact of your design solution on their operational effectiveness. Find out what metrics your client watches; which ones drive their business and which they’re most concerned about. Measure before and after metrics gathered from clients you’ve worked with. Develop case models that demonstrate to potential clients how your designs have improved operating margins. Obtain testimonials from previous clients and present case studies to industry forums your clients participate in.

Tall orders, right? But, it’s a tough, competitive marketplace and, if you cannot move your firm into this position of authority in the areas of service that you’re passionate about, you’re destined to be complaining next year about the same things: “My clients won’t pay me what I’m worth.” (You’re only worth what you’re worth to them.) “I can’t even cover my costs of doing business.” (Not your client’s problem.) It’s up to you to make yourself worth greater fees from your clients; it’s not up to your clients to figure out why they should pay you more. You have to be able to quantify the benefits. Edward Friedrichs, FAIA, FIIDA, is a consultant with ZweigWhite and the former CEO and president of Gensler. Contact him at efriedrichs@zweigwhite.com. This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1020, originally published 8/19/2013. Copyright© 2013, ZweigWhite. All rights reserved.