Managing Client Expectations on Budgeting for a Project
In any business, there are four main customer expectations that a designer or any small business owner must consider:
Price, Quality, Choice and Convenience
Many times, our clients come to us with no idea of how to budget for their projects. The advent of HGTV and other home design shows have also painted an unrealistic picture of the actual costs involved. Your prospective clients are not always frugal and unrealistic, many are simply new to the world of quality curated design and renovation and they have never shopped the way we do with our clients for furnishings and materials.
I am sure some of you have presented a budget to a potential client to be met with shock and not being awarded a project. I would like to share some ideas with you on qualifying a client and informing them of the true cost of renovation so they are eager to hire you, and subsequently keep them moving forward with the project.
Prior to meeting with a potential client, I have a twenty-minute Discovery Call via Zoom to be sure there is a good synergy/connection. I then offer a live consultation and bill at my hourly rate. If they end up hiring me, the cost of the consultation is deducted from the design fee. This gives you a chance to see the space, get a feel for the client(s) and whether you really want this project. You also can discuss a general range for what they intend on doing and determine if they are on board and ready to move forward and invest in the project.
It is very important to ask them if they have a budget in mind. Many have no idea and with our experience and seeing their Pinterest boards and what they have already done, we can give them a budgetary number for the scope of work.
If you deal with the subject of money from Day One, it will make it less uncomfortable as you move through the project. Also, communication is key, so before we select any FFF&E, we have the preliminary budget in place.
You can opt to show the prospect some of the work you have done, and the costs associated with those projects, informing them before they buy about the project cost range and giving them a chance to prepare to invest in working with you.
Do not lower your fees. Even if you are dying to take a project on, the minute you start lowering your price, you will have devalued your services and may create a mindset for the project from which you will never get free. You owe it to yourself to trust the value you bring to the project and know your fees are in line with your service.
Sometimes, you could be mid-project and a client is suffering a loss in the stock market, a job loss, and the like. If something like this occurs, you could offer to postpone the project until they have finances arranged or reduce the scope to prioritize the main concerns, but do not adjust your fee structure.
At this point, they know the value you bring to the project and of course, will want to have you create a strategy to maintain the relationship. If there is an issue of an unrealistic idea of costs, you must address this by adding value, not lowering your fees. Educate them on how you can help and guide them to realize their vision for their home and how opting for quality specified items is a far better choice to other items that may be at a lower price point.
Here are a few tips:
Offer a very detailed Letter of Agreement that must be signed by all parties.
Include a budgetary number or a range for materials and be specific about your fee structure.
Communication is key:
Provide regular status updates
Provide meeting minutes
Provide clients a comprehensive spreadsheet showing all items purchased for the project and where we are in the purchase/delivery/installation timeline. We use google docs and share a read only version with our clients. This way our team can constantly update the living document and the client has real time access to the project flow.
Remember - you are establishing and then building a very personal relationship with the client as you work on their home, make sure they feel respected, appreciated and heard at all stages of the project.
For more information on managing client expectations, you can click here.