How To Respond When Asked To Lower Your Design Fee
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How To Respond When Asked To Lower Your Design Fee

Tired of lowering your design fee during the fee negotiation process? Today I want to show you the best way to respond when Clients ask for a lower Design Fee. Let’s start with a common scenario: 

Common scenario:

A new Client approaches you, says they’ve heard a lot of great things about your firm, and they would like to work with you.

They ask if you’d be interested in submitting a fee proposal for their new and exciting project.

You’re keen to build your portfolio and win more work. So you examine the Client’s requirements and then respond with (what you consider to be) a fair and reasonable design fee offer.

After some delay the Client follows up by saying:

“We’d like to work with you; however, your design fees are much higher than the market will allow right now… would you like to reconsider your proposal?”

In a spirit of compromise and believing the project is all but yours, you respond with an enthusiastic reduction hoping it will finalize the deal.

(Note: to help you with your design fee negotiations we’ve created a free starter kit packed full of useful resources) 

Fee Proposal Starter Kit

Unfortunately, your generous discount is met with yet more hesitation.

The Client is still keen to hire you but they’re not quite ready to sign the contract.

So they respond by saying:

“Thank you for your latest proposal. We’re getting closer, however, we’re not quite there yet. If you could just sharpen your pencil a little more we may have a deal”

Before long you’ve entered yet another round of negotiations and experienced yet another reduction in design fee.

Is there a better way for Architects and Interior Designers to respond when asked to lower their design fees?

Yes, as described by William Ury and Roger Fisher in their bestselling book, Getting to Yes, a successful negotiation requires ‘Creating Options for Mutual Gain’.

So, the next time you’re asked to lower your design fee, don’t just lower your fee hoping you’ll hit the right spot.

Step 1: Open up the dialogue:

Instead, start by opening up the dialogue and learning about the Client’s interests.

Step 2: Create options for mutual gain:

Then, once you have an understanding of their interests, respond with some ‘options for mutual gain’.

For example, your fee reduction could be partnered with:

1. more favorable payment terms (discount for early payment),
2. decreased responsibility (reduction in scope), or
3. an opportunity for a success fee (differing a portion of the fee until a specific goal or milestone is met).

Before you respond, be sure to ask the Client what they’d like to achieve.

This will allow you to shape your response around their interests – rather than your own assumptions.

Summary:

Architects and Design Professionals should always be looking for opportunities to exchange concessions during a negotiation.

Before offering a fee reduction take the time to learn about your Client’s interests and then create ‘options for mutual gain’. 

For more negotiation hints and tips check out the Design Professionals Guide to Negotiating Design Fees and Contracts:

Design Fee
Image by Blue Turtle Consulting

Let us know what you think:

Are you currently offering Clients ‘Options for Mutual Gain’? Let us know in the comments section below with a “Yes” or a “No”.

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Principled Negotiation for Architects & Interior Designers: 

We’ll be discussing the art of Principled Negotiation in the coming weeks. Meanwhile, if you’re looking to improve your negotiation skills, here are three resources you can use right now:

1. Design Professionals Guide to Fee Negotiations (eGuide):
https://blueturtlemc.com/product/the-design-professionals-guide-to-negotiating-fees-contracts/

2. The No.1 Mistake Architects Make With Their Design Fee (Free Blog): https://blueturtlemc.com/blog/the-number-one-mistake-architects-make-with-their-design-fees/

3. The Ultimate Fee Proposal Online Training Course (CE/CPD points available):
https://blueturtlemc.com/feeproposalworkshop/

This Post Has 4 Comments

  1. Naama Blonder

    I don’t think the answer to the question ‘what are you trying to achieve?’ is relevant to my fee. If he is trying to achieve a faster approval process or a certain amount of density, I can’t scope my proposal around those. And if the answer to the question ‘what are you trying to achieve with this negotiation?’ he would say: ‘to save money’.

    1. Ian Motley

      As service providers, we solve client problems… so how do you address Clients who confirm that their interests are time, yield and money? Do you:

      1) ignore their interests
      2) try to persuade them to have other interests, or
      3) address their interests in your proposal?

      We would argue that you ignore option 3 at your peril! You can see an example of how we address option 3 (time, yield and fee) in case study 3 of the Fee Proposal Workshop.

  2. Vanessa Cullen

    This client is likely starting a bidding war and saying the same thing to multiple designers, or they know you are good and want your services but presume you are a push over that they can bully. I say this from 17 years experience running a fitout design firm. Why would you even want this type of client? You invest all this time and energy into trying to appease them, only proving that you are a push over afterall. Nothing good will come of it and caving in to this is one of the reasons our industry is in such a fee decline.

    1. Ian Motley

      Yes, you can always walk away from a Client that wants a lower fee… that’s your choice to make. However, don’t forget that suggesting different payment terms and/or requesting a success fee doesn’t mean you’re accepting a lower fee!

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