How to Negotiate Your Design Fee Without Losing Your Shirt
Chris Heiler | September 8th, 2009
Three weeks ago I had the opportunity to meet with a potential client to discuss a truly unique project. The meeting went great, and I'm feeling confident that we will be working together.
But, here's the problem--I compromised my design fee. I know, shame on me.
A friend, and horticulturalist, recommended me to this client. He informed me that he was working for the client at an hourly rate of half of what I charge per hour. He also informed me that she could be a little tight with the check book. Because of this, I proposed a design fee of $90 per hour instead of my typical $110 per hour.
So what does this mean long term? First, if she recommends others work with me, she may tell them that I charged her $90 per hour. Second, these new prospects will expect me to charge the same hourly rate. I have a feeling many of you have had this very thing happen to you a time or two.
When I relayed this story to my CPA last week, he just laughed at me. He then got serious and said, "Never compromise your design fee!" I know this, I just had a moment of weakness :-)
So what was his advice? He said never lower your hourly rate, instead offer a percentage discount and always ask for something in return. If you are willing to compromise, your client must compromise as well! This way, whenever someone refers you they will quote your standard hourly rate. Sure, they may tell their friends that you offered them a discount, but the discount came with certain concessions.
In the case of my CPA, he requires a cash retainer of at least $500 before he does anything. He also requires "progress" payments along the way so he is never owed a balance on work he has performed. He always stays ahead and never waits on money owed him.
I thought this was a great piece of advice.
Have you lowered your fee before and then attracted a prospect who expected the same? What was your experience?
What could you ask for in return for offering a percentage discount? Feel free to share in the comments section below.
To Your Success,
Chris Heiler
P.S.- You can now try LandscapeLeadership.com for FREE for 10 days. Gain access to all Member-Only resources immediately when you sign up.
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