Do you (or your competitors) give away free design services to win new Clients?
Today I want to show you how to apply a pricing strategy called ‘free-mium’, so that you can stop giving your time, effort and ideas away for free!
Or, so that you can compete with Designers who are!
Let’s start with the basics, what is a ‘freemium’ pricing strategy?
What is freemium pricing?
Freemium, (as you may have guessed) is a combination of the words ‘free’ and ‘premium’, and it’s used to describe a pricing strategy that offers at least two different versions of a service – a free version and a paid version.
The idea behind the strategy is simple – different Clients have different interests… and the freemium pricing strategy provides service providers with an opportunity to address these different interests… and therefore win more clients.
For example, the free version addresses the interests of those Clients who aren’t yet ready to make a financial commitment but are interested in what you have to offer.
While the paid version addresses the interests of those Clients who already value the service and are prepared to make a financial commitment.
You will see successful examples of this pricing strategy all around you.
(Note: To help you with your own pricing strategy we’ve developed a free starter kit packed full of useful resources)
For example, are you familiar with a company called Spotify, the online digital music streaming service that was established in 2006?
Spotify currently offers all its customers two service plan options: The free version and the paid version.
The primary difference between the two service plan options is easy to see: Those customers who choose the free service plan are exposed to online advertising. While those customers who choose the paid service plan can avoid online advertising.
You may be thinking, ‘why would anyone pay for an online music streaming service that can be experienced for free?’.
According to statistics published by CNBC (“Apple Music has reportedly passed Spotify in paid subscribers in the US”, Kif Leswing, 4/5/19), 96 million of Spotify’s 207 million users are currently paying customers.
This means that nearly 50 percent of Spotify’s customers are declining the free service plan, in favor of the paid service plan option.
Because different customers value different things. While some customers value listening to music free of charge, others value an uninterrupted listening experience.
By offering the two different service plan options Spotify can address the interests of a broader range of Client types and thus serve more Clients.
How can Design Professionals avoid giving away free design services?
If you’re thinking that the freemium pricing model only works for tech companies who can simply turn software features on-and-off, then you’d be wrong!
Over the last 10 years, we’ve helped many Architects and Design Professionals develop their own freemium pricing model, with great success.
To explain how we create the service plan options we must first consider the Clients requirements.
For example, when the Client first approaches you about their project, they’ll have many questions.
So why not version the way in which you provide answers to those question, for example, you could offer the following:
Each type of response will require a different level of commitment from you (in terms of time and resources).
Some services will require a simple meeting and general advice, while others will require a review of the local planning/zoning codes, and a written report.
By grouping the services and offering service options, you’ll be able to address the interests of a broader group of Client types… from those who just want to meet-and-greet, to those who are ready to receive project-specific advice and guidance.
Of course, if you want to sweeten the deal you can always credit the cost of paid services towards the costs of a future commission… it’s your choice to make!
Why do service options help avoid free design services?
When executed correctly, you’ll be amazed at the number of Clients who are prepared to pay for pre-design services, not just because they’ve been given the opportunity to do so, but because they can see the value (the many benefits) associated with the paid service.
Meanwhile, those Clients who aren’t yet prepared to make a financial commitment can still engage with you through your free pre-design service option.
For more examples of companies that offer their customers a range of service plan options read the following (free) post: The Number One Mistake Architects Make With Their Design Fees
Let us know what you think:
Are you’re already offering a range of pre-design service options? Let us know in the comments section below by saying “Yes I am”, or “No I’m not”.
What type of Pre-Design Service Options Should Architects & Interior Designers provide?
Service options are the foundation of a successful, and more ethical, pricing model and it’s a subject that I’ll be exploring in more detail throughout the coming weeks. If you can’t wait here are some resources that are available right now:
1. The Design Professionals Guide to Writing Successful Fee Proposals (eGuide):
2. The Ultimate Fee Proposal Online Training (CE/CPD points available):
3. How to Respond When Asked to Lower your Design Fee (Free Blog): https://blueturtlemc.com/blog/how-to-respond-when-asked-to-lower-your-design-fee/