Steve Jobs, though not an Interior Designer, says it best in my opinion: “Design is a funny word. Some people think design means how it looks. But of course, if you dig deeper, it’s really how it works.“
Designing is a lot more work than clients usually imagine. There’s a lot of behind-the-scenes work that involves interpreting the client’s needs and desires, picking color schemes that include the finishes, furniture, fabric, etc, illustrating the spaces, not to mention dealing with vendors, coordinating the work schedule and so on. So, when it comes to quoting a project we’ve taken up, there are many factors that go into the final decision of how much to charge. For instance, we have to consider licensing and rights-management of the illustrations and the time we put into design boards we create for the project, costs of materials or any other needed supplies, and of course the time to design. These types of considerations are often priced out in flat-rate fees. So why not just charge hourly? Fast Company Design explains it best:
“Pricing hourly seems much easier than flat-rate pricing, but because you have to give clients a ballpark full-cost price upfront (total amount of hours worked x hourly rate), you can end up in a very tough spot if…you’re nearing the halfway point in the project and are already over the total hours you’re contractually committed to. What does this mean? It almost never means that you’re paid double your original fee. Even if you can eke out a little extra money from the client, your hourly rate will look more like the one you were earning at the Blue Comet Diner at age 16.”
So how do you measure the value of design? Staci says, Well, I do like the Steve Jobs quote.
The value of a design is a very personal (for the client) and project driven decision. If a designer is doing a lot of the same type of projects then they can be somewhat comfortable in the general area of what a project should cost based on all the moving parts which Tara already mentioned as well as time spent on those last similar projects and accommodation for any special or unique designs that will need to be addressed in the project. The key word here is should. That word is the push and pull of the perceived value between the designer and the client.
Let me share a story of a recent project I submitted a quote for and didn’t get. It was for a brand hotel (no names but NOT a 4 or 5 star property); I have done enough hotels to know what’s involved. In the course of a conversation with the client after I submitted my quote, I was told I was the highest bidder. He said he really did want to work with me because I had asked more questions and had more conversations with him than any of the others during discovery and he liked how I approached the project so could I do something with my number. Here is what I wanted to share with you and if I sound like I am complaining, please bear with me ….. I am frustrated.
I spent a considerable amount of time putting together a fair and correct quote for this project. I knew, based on my experience, since it was a conversion (changing from one brand to another) there would be some additional issues to address as well as several things the new brand required and because the architecture would not support it without doing some construction, it could not be a cut and paste approach like the lowest bidder was probably doing. I knew what the project design fee should be. It didn’t matter, he believed because it was NOT a 4 or 5 star hotel it should not command a certain fee structure. Here’s my point, it costs me just as much time to pick a $10yd fabric as it does a $50yd fabric. Yes, there are more rooms in a 4 or 5 star hotel (ie: ballrooms, meeting rooms, bigger public spaces, more guest rooms, etc) which is why a designer would charge more for that type of project than a NOT 4 or 5 star hotel. But, my point is his perception that it was NOT a 4 or 5 star property, was why I should be charging a lower fee. He did not apply a value to my time and the experience I would be bringing to that project. It is frustrating because I knew I would have done a good job for that client and the project.
I know we don’t all get every project we go after, but to have to drop a fee down so low to get the job where you don’t make any money after you have paid your employees is the definition of bad business behavior. It’s bad for the design firm and bad for the client. Not applying a fair value to the design of a project is as hurtful to the project as it is for all parties involved. Clients who try to devalue or undervalue the role of the designer end up jinxing the project from the get go. I always encourage clients to give me the real budget. We can “value engineer” if we have to, after the design is completed. We get to keep the integrity of the design but still adjust for costs that are not jiving with what they actually want to spend. Contrary to the general perceptions of the interior design industry, a good interior designer will make the costs part of the program. There is no point of designing for a client that doesn’t exist. In every contract, listed are the responsibilities of the designer and the responsibilities of the owner/client. I believe it is the responsibility of the designer to design for the client they have and it is the responsibility of the owner/client to be honest with the designer regarding costs so no one’s time is wasted nor efforts devalued.
I’m not sure if I have convinced you how or why to apply value to design but I hope I have at least given you pause to stop and consider the subject next time you are considering hiring a design firm.
-Tara & Staci