Preface: You must do the work to determine whether this is even a Full-Service Client from the beginning. There’s a good chance they aren’t and you’re forcing a square peg into a round hole. The remainder of this blog assumes you’ve done that work and they are in fact a Full-Service client. While there are multiple methods to discussing budgeting, the following article discusses my process that has been widely successful for me.
When designers ask me “How do I discuss the cost with clients?” they’re looking for a script – some text that encompasses all that we do but in an easy-to-understand format that also isn’t long-winded. Does that exist? Yes, it does. Does it work? Only short term. In fact, I only recommend that if you’re very new to Interior Designer and still learning. I’ll go over that script shortly and why it’s a trap.
But to be t r u l y successful in discussing costs with clients takes far more than a single conversation. I’ll lay out some of the key processes I’ve utilized in my business with virtually no pushback. Yes, it’s possible.
Step 1: Get Comfortable
If you’re spending tens of thousands of their money (or even 6-figures) and you aren’t comfortable discussing money, how comfortable will they be in trusting you with it? I happily dish out money to my financial advisor because he’s proven to be of value to me. He’s going to take this money, invest it, and I’ll see a return on investment (ROI). Interior design also has an ROI. It’s a barter after all. The client hands you money in exchange for the design of their dreams. It’s your job to deliver the vision and the design. That ROI may be a repeat client down the line, referrals through word of mouth, a portfolio for your website, a publication in a magazine, social media posts, a positive review, etc. A single happy client can produce all of those!
Step 2: Set Proper Expectations
- Have and keep standards for yourself. Seriously.
- Use proper terminology… It’s an investment. Not a budget. Let’s treat it like such.
- Be sure your consultation fee reflects your value. If your consult fee is $95, you’re setting a precedent that you’re cheap. Value yourself and your time and they will too (You teach people how to treat you!)
- Make your process and expectations super clear. Don’t just write it and expect Clients to read. SAY IT. Try these scripts:
SCRIPT TO NOT BE SHOPPED: "Purchasing from retail can really hurt your design experience and affect the overall quality of design. Avoiding stores during our time together can save you money and time on the backend. We're here to help so please leave the shopping to us!"
SCRIPT TO JUSTIFY PRICES: "Manufacturers set guidelines for companies like myself to price at. I do not spend hours scouring the internet for the cheapest price available therefore my prices may be higher than what you see online. If I price shopped every piece, you can expect my design fees to be 50% higher because of the amount of time involved. We can save $125/hour (my hourly rate) by avoiding such."
- State your value. You’ll need to leverage this more often than you’d like. Write down all the tangibles and intangibles you provide to your client throughout an entire design. Put it on an Expectation Guide, Guide to Working With Us, or Welcome Guide (as I did – psst. this is a best seller for a reason!)
Step 3: Timing is Key
The discovery call (or initial design call as I refer to it) is never the time to discuss numbers. It’s the quickest way to lose a potential client. You don’t even know what the whole picture looks like so how can you tell them an exact number? I don’t care how many times they ask, how adamant they are, or how much of an attitude they catch. (By the way, if they do any of these – BIG red flag – run, don’t walk.) The answer is always a resounding NO. Think like a Contractor here and never give numbers sight unseen. You don’t know what conditions the space is truly in. You haven’t even decided if you want to work with them! There’s a big difference between a 1,500sq ft home and 15,000sq.ft. Call it liability because discussing cost without proper timing and seeing the full picture is set up for failure.
*click* – That’s the sound of them hanging up on you.
SCRIPT TO EVADE THIS QUESTION: "I can understand the need to discuss costs and plan appropriately however it's really hard for me to know not having seen the space, fully assessed your needs and other variables. The last 15-minutes of the consultation, we'll talk about the different services I offer and what an investment might look like. You'll have a much better idea before I leave.
SCRIPT IF THEY'RE PRESSURING YOU: I really don't have information to give you a ballpark at this time. Several things factor into the investment such as your home's current condition, your design style, the scope of work, and so much more. The consultation truly is a pivotal part in my process to getting you more specific answers. What days and time work for you to schedule that?"
Step 4: Ways to Ask Without Asking
This next step is broken into two different options that suit your level of experience.
Step 5A: When You Know Your Numbers
For when you have experience, know what a single room costs, and have completed several projects. You’re familiar with discussing investment.
Before we get into the “how”, let’s talk about the “why”. In my business, I am first and foremost a businesswoman. I need a profitable business to survive. Secondary to that title, I am a Designer. It is my job to design a space in which form follows function. Nowhere in my education or training was I an accountant. (If you have a financial background, that’s your third role). The design must come first. Always. After all, designing around a budget is designing with limitations.
You’re at the consultation and you’ve completed the tour (remember: you need to see the full picture); Throw your numbers out there with a range. Here’s an example:
SCRIPT TO DISCUSS BUDGETS:
“Based on historical data of similar projects with a similar size space, I estimate this living room may cost you between $70K-$90K. However, I don’t know the exact cost until I fully design the space for you. I ask all of my Clients to let me design them the dream vision and work backwards from there.”
Pause. Please do not keep talking. You’ll talk yourself out of a sale. It’s okay for there to be awkward silences. They need time to digest that. And while they’re digesting that number, pay attention to their facial features and body language. Do they seem uncomfortable or are they jumping for joy? Are they still excited or are you about to be given the 3rd degree?
The key here is to be confident and stand your ground. The price is the price. It doesn’t change based on their budget. You can walk into the Ritz-Carlton but if your budget is for a Motel 6, Ritz-Calton doesn’t care.
Step 5B: When You Don't Know Your Numbers
For when you’re new to the industry. You don’t yet know how much a single room costs and you’re working to get comfortable discussing investments overall.
>This method works, but like all methods, there are drawbacks to it. Take the time to familiarize yourself with the cost of a single room. If you’re brand-spanking-new and have no references, use your own home.
In this Good, Better, Best Guide I created (full version here), I discuss the process of using this method to clarify a budget with Client. This allows you (and them) to have exact numbers to work with. In this method, you’ll take the Good, Better, Best Guide above (which goes room by room, see sample below) and…
- Start with:
“Let’s discuss budgeting. I know you were unsure of costs/mentioned $X but I’d like to take a few minutes to show you how costs play into your design so that we’re on the same page for your project.”
- Select the room that most accurately represents their project.
- Go item by item and verbally ask them which price point they’re comfortable with for each product. This is important because Clients know how much a sofa costs but the fail to see the larger picture of overall cost.
- Mark down their answer in the right column
- Total up their cost of goods on the last page. Verbally tell them what their total is.
- Now add your state tax (there’s a prompt on the last page).
“Okay – let’s add state tax which is X%. That adds an additional $X”
- Add shipping and freight (there’s a set 15% estimated on the last page).
“We estimate freight to be 15% that would be another $XXX.XX”
- Add up all of your totals
“Great. Lets add this together. Based on the numbers you’re comfortable spending per item, we’re discussing an overall budget total of $XX,XXX.XX. This number is the starting point for your design. Let me be clear that doesn’t include an architectural details, wallcoverings, painting, or other items that would really enhance this design. You can expect we’ll exceed this number. How does this land with you?”
Why this is a trap: 99% people will hear that number as THE number. In all the mumble-jumble they heard a higher-than-expected number and I guarantee you, they stopped listening to you. The didn’t hear this is the baseline. In a lot of cases, this can lead toward frustration down the line when you come in $20K over. Sometimes it’s better to set no number than to set one that you may not be able to live up to. The other drawback here is that this can take a good 15-20 minutes which wastes time at the consultation. It’s okay to use this method – it does work – but you’ll outgrow this quickly.
Step 6: How to Respond to Pushback
At the consultation or throughout the design process, you may experience some pushback in this area. It’s normal for finances to become heightened, especially towards the end of the project.
If they’re not responding well at the consultation, go to Step 5B and follow those steps to educate your client.
If you’ve educated your client at the consultation and they’re adamant their budget is $10K… it’s time to reduce their package. They aren’t Full Service and they never will be.
SCRIPT FOR UNNEGOTIABLE LOW BUDGETS: "Okay. It sounds like Full Service isn't best here. Let's discuss another format of service that might be better suited for you. This service I offer includes a full room design but with a curated shopping list for you to purchase. This allows you the flexibility of purchasing items when funds are available and removes a portion of expenses from installation."
If you're presenting the design and they're nickel and diming each item...
SCRIPT FOR NICKELING AND DIMING:
(If you're hourly) "I can certainly the desire to keep costs down. I just want to remind you that it additional time on my end to search for less expensive items. You may spend several hundred dollars of time trying to save several hundred dollars of product cost. Additionally, these product costs are within normal limits of a manufacturers MSRP so the savings here would be minimal."
If you're presenting the design and the design is just out of budget entirely and drastically...
SCRIPT FOR DRASTIC BUDGET CUTS: "Let's discuss what items we can remove from the design or how we can reduce the Scope of Work to be more aligned."
Notice: This doesn't deliver a message of "I'll get you cheaper options" (though that's an option if you're sourcing in the high-mid range). Instead, it says, "Let's get you less."
Point: I’m not sacrificing quality.
Step 7: Frustrations and Consequences
As they say "You can put lipstick on a pig, but it’s still a pig"
- Accepting low-budget clients and forcing it to work will hurt YOU in the long run. That’s not your best work, is it? Is that what you want to be known for? If they refer you to their family and friends and you end up with more low-budget clients, are you okay with that? Now if you’re new to the industry and you need the portfolios and want the experience – absolutely, go for it. But puh-leeze do yourself a favor and keep this to a minimum. This is a business after all.
- The liability is too costly. Picture this: you source and procure a sofa. It’s $1K from Wayfair. You think it’ll last a year and you say so. Except your clients have two dogs and three kids. In 15 days, the frame breaks. It’s barely out of the box, still smells like chemicals from overseas, and now the entire frame breaks. Who do you think they’re calling first? Let’s be honest, it isn’t Wayfair.
I hope this article has helped you get more comfortable discussing budgets and navigating pushback. As always, if you have any questions, feel free to leave a comment and I’ll respond.