Today we’re talking about our top 10 rules for writing successful fee proposals.
The following list is a summary of what we’ve learned after 20 years of helping Design Professionals across the globe win; more Clients, higher fees, and better projects.
Let’s get started:
Rule 1. Start Client Relationships with a Small Request:
Research shows that companies who start Client relationships with a series of small commitments win more Clients than those who start with large commitments.
Small commitments can be achieved with the following:
- Educational products (guides, blog posts, newsletters, checklists, videos or books),
- Events (presentations, guided tours, or speaking engagements)
- Introductory services (feasibility studies, pre-design services, space planning studies, work-shopping sessions or master-planning services).
Research: Freedman, J.L. & Fraser, S.C. (1966). Compliance without pressure: The foot-in-the-door technique.
Read More: https://blueturtlemc.com/blog/architecture-leads-how-to-increase-your-conversion-rate/
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Rule 2. Keep your Fee Proposals Simple:
Research shows that Clients will either ignore or disregard what they can’t quickly and easily understand.
Make sure your proposal is not ignored by keeping your initial request simple.
This can be achieved by breaking the proposal up into a series of smaller parts.
Start with a short and simple fee letter (executive summary) and provide more information upon request.
Avoid overwhelming the Client with too much information (or information that’s too legally onerous) at the start of the relationship.
Research: To Keep Your Customers, Keep It Simple” Spenner, P. & Freeman, K. (May 2012 ) Harvard Business Review. p 4.
Read More: https://blueturtlemc.com/blog/four-proven-ways-to-make-sure-your-design-fee-proposal-is-not-ignored/
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Rule 3. Build Rapport:
Research shows that people like people who are:
- similar to them,
- pay them compliments, and
- work with them towards a common goal.
Make sure your proposal is focused on a common goal such as a clearly defined unique selling proposition (USP) that aligns with your Clients interests.
Try and avoid generic scopes of services at the start of the relationship.
Research: Influence: The Psychology of Persuasion, Chapter 5, By Dr. Robert Cialdini
Read More: https://blueturtlemc.com/blog/the-best-way-for-building-client-rapport-with-architectural-clients/
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Rule 4. Avoid The Ambiguity Effect:
Research shows that people like certainty and avoid uncertainty (even when the uncertain option could be more beneficial!).
The more certainty your fee proposals provide the more likely the Client is to favor your proposals.
Where possible consider guaranteeing design fees, time frames, deadlines, and/or the work to be delivered (i.e. provide a list of tangible deliverables in lieu of scope of work descriptions).
Research: Thinking and Deciding, 4th Edition by Jonathan Baron
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Rule 5. Provide Evidence:
Research shows that Clients like to copy the actions of others when making a purchasing decision – people generally believe that if others like it, they will too.
Make sure you include a list of Client testimonials within your fee proposal.
The best testimonials highlight how much previous Clients enjoyed working with you and how you delivered on all your promises.
Research: Influence: The Psychology of Persuasion, by Dr. Robert Cialdini
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To help you create your own successful fee proposals we’ve created a FREE Fee Proposal Mini-Series. To learn more click on the link below:
Rule 6. Demonstrate Mastery:
Research shows that Clients will look to those with more knowledge when making a purchasing decision.
Make sure your fee proposals include a list of awards and industry publications demonstrating how much your work is valued by people with more knowledge (i.e. other prominent industry professionals).
Research: Influence: The Psychology of Persuasion, by Dr. Robert Cialdini.
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Rule 7. Create Demand:
Research shows that Clients place more value on products and services with less availability.
Make sure your fee proposals reference any time constraints that limit the availability of your services. Only use real time constraints as false deadlines are likely to harm your reputation.
Research: Influence: The Psychology of Persuasion, by Dr. Robert Cialdini.
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Rule 8. Cater to a Range of Reserve Price Preferences:
Research shows that prices aren’t fixed! Different Clients will pay different prices for the same service.
To accommodate a range of reserve price preferences, make sure you include a range of different price points within your fee proposals. This can be achieved by offering a range of different design service options in lieu of just one service.
Research: Fee Proposal Workshop Wine Bottle Experiment: https://blueturtlemc.com/blog/the-best-way-to-increase-architecture-and-interior-design-fees/
Read More: https://blueturtlemc.com/blog/the-best-way-to-demonstrate-value-in-design-services/
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Rule 9. Frame the Losses & Gains:
Research shows that people are hard-wired to avoid “pain” and seek “pleasure”.
Make sure you use a fee matrix (table) to present your service options.
A fee matrix will provide an easy way for Clients to compare the different service options and experience the exclusions (pain) and the inclusions (pleasure) associated with each service being offered.
Research: Kahneman, Daniel and Tversky, Amos. Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), March 1979. pp. 263-291
Read More: https://blueturtlemc.com/blog/how-to-sell-high-quality-design-services/
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Rule 10. Be the First to Give:
Research shows that people look favorably towards people who provide personal and unexpected actions/rewards/compliments.
After the initial meeting, be sure to send your Client a handwritten note thanking them for their time, or (when appropriate) a small personal gift.
Research: “Sweetening the Till: The Use of Candy to Increase Restaurant Tipping”, by David B. Strohmetz, Bruce Rind, Reed Fisher, and Michael Lynn.
Read More: https://blueturtlemc.com/blog/how-to-avoid-the-cost-of-free-design-services/
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This has been a quick look at the how to write winning fee proposals.
There are over 150 cognitive biases that influence the decisions that people make. Many of these biases like “anchoring and adjustment”, “decoy pricing”, and “the curse of knowledge” have a huge impact on the presentation of the fees within the proposal. We will be talking in detail, about these issues, in a separate post.
Need Help?
In the meantime, if you’d like help writing a successful fee proposal check out our FREE Fee Proposal Mini-Series.
The Series will introduce you to the 3 biggest Fee Proposal mistakes and how to avoid them. To learn more click on the following link: https://blueturtlemc.com/fee-proposal-mistakes/
