In this fourth installment of this article on selling design services we are going to expand on something that we talked about in Part One but look at it from the other side of the coin. We talked about “free” being a 4 letter word and how giving away your designs is working for free which no one wants to do. We discussed the bad expectation that we are setting when we start out our relationship with a new client by doing work for free. So hopefully you understand by now that you can’t provide your client with all your knowledge and years of training & experience (which is the most valuable asset to your company), without charging them for your time. Remember they can get the equipment from practically any other company, what they really need you for is your knowledge of how the equipment works to not only spec the needed equipment but also install it for them.
In my experience most integrators want to start charging for their designs for one simple reason – they are looking for a way to get more money from their client. This is where the train starts to come off the track – I am not saying that getting more money from a client is a bad thing, we just need to make sure that we are offering the appropriate value in exchange for the money. In Part Two we went into detail as to what makes up a system design that is worthily of being something that you charge a client for. In Part Three we discussed what skills & tools you needed to be able to produce those system designs.
So assuming that you have been paying attention during the previous parts of this article and you feel that you are producing quality system designs, when do you start to charge your clients for your design work? This seems to be a simple answer, right? If you have gotten this far, I am sure that the obvious answer would be “NOW”! But hold on trigger – like other aspects of running a successful business, there is more to it than that.
When you make the decision to start charging for your design work you need to make it a commitment that is etched in stone: no turning back, no exceptions. If you give yourself or any of your sales people even a slight window where exceptions are allowed you will find that every project has some type of exception. You have been selling systems previously without charging a design fee so it is going to seem very foreign to you and will not feel comfortable especially for a seasoned sales person who has their process down and this is something new. Exceptions = Excuses.
I have found that in order to get all of those involved in selling projects on board with charging for design, it is essential that everyone understand the need for system designs, understand they cost money to produce, and believe that they add value to the overall project. If a sales person sees designs as useless they will never sell design services as they will want to sell the customer something else with that money and are afraid that the client will not value the design enough to pay for it. It is also important that all of your techs have the same understanding of the value of the design. If they don’t value the design it will become obvious to the clients on site and then they will start to question why they paid for something that the techs do not use. And even though techs and sales people don’t seem to be the best of friends, if a sales person finds out the techs don’t use the designs there is no way they are going to sell it to their clients.
Once you get everyone involved on board with charging design fees there is one last thing that you, the owner, need to get your head around – are you ready to let a client walk out the door if they object to paying the design fee?
Trust me I understand how hard this is – I can still vividly remember the day that I had my first meeting with a new client and I had decided that I was not backing down from charging a design fee. I had the intention to charge other previous clients but backed out at the last minute or backpedaled when the client questioned why they would need to pay a design fee. I can still feel the emptiness in my stomach and the feeling of major heartburn and the urge to puke – it did not help that I got a call from the builder telling me the client was on their way and this guy was the biggest pain in the ass they had ever dealt with and he questioned EVERYTHING!
When the client arrived I hit it off with them immediately and I began to relax a little thinking that this will be a breeze. I took them through our whole process and showed them examples of the type of system designs and drawings that we had produced for previous projects similar to theirs – they were both extremely impressed! He even commented that we were much more detail oriented than even the builder or any other contractor involved in his project. Jackpot – he sees the value in the documentation and design, this should be easy. With my new over confidence, I presented him with the system design package, what it included, how long it would take to complete, and the cost to complete. His answer “That all looks great, and I am really excited to see what you come up with, but, there is no way in hell I am paying for that. With the size of this project you need to absorb that expense.” At this point my confidence was gone and the hole in my stomach was back. I explained the process to him again all the time he was agreeing that a complete system design was required to get everything correct, but he still refused to pay the design fee. I was on the verge of sticking my tail between my legs and backing away from the design fee when he said something that helped me stand my ground – “I don’t care if it costs you time and money to complete, that’s not my problem, that’s your problem.” I took a deep breath, grabbed my notepad and pen and started writing, then tore off the piece of paper and told the client that I apologized for wasting his time, but we were not the right company for him to work with and there was the name and number of another company that would suit him better.
To say that the client was floored would be an understatement. He grabbed their plans and started to storm out of the office only pausing to tell me that I was a jackass and asked if I realized all the money that I was loosing. I just smiled politely and thanked him again for his time. I can’t remember if I actually puked when he left or if I just felt like I was going to puke. The name that I gave him was for one of our biggest competitors and there is a great ending to that story but you will have to ask me about that some other time!
I wanted to tell you that story so you realized that I had just as many reservations on charging for designs as you do, and that it was no easy road for me. I will tell you that I had a meeting with another client the next day and the butterflies were gone. While that client did not simply agree to the design fee, we did completely review what was all included in the system design and he pulled out his checkbook and wrote a check on the spot so that we could get started with the design work. From that point on we never had any issues with getting clients to accept the design fee.
In the next part of this article I will go through the various methods of charging for design as well as ranges of what other integrators are charging using those methods. In the final part of this article I will discuss dealing with objections from clients and some creative work a rounds to those objections.
This is part four of a six part series on selling design & engineering services detailing the major aspects involved in actually charging for your design & engineering services.
About the Author
This post was written by DAVE KIRN
Dave is the President & Founder of D-Tools Certified Partner, k2 Dealer Services, a specialty consulting firm for the integration industry based in St. Louis, MO. Dave has been in the AV industry for 18+ years and owned a successful AV integration company for 8 years prior to starting k2 in 2007.