SHOW ME THE MONEY

How to Sell Your Value and Charge What You’re Worth

BY LUANN NIGARA

“How can I compete with internet pricing?”

It’s a question I hear often— from podcast listeners, coaching clients and designers in my network. When you’re executing huge projects and charging large amounts for a project, it’s easy to anticipate client pushback.

But if you’re experiencing—or worse, anticipating—client pushback, you’re likely approaching the sales process the wrong way. The question of how to navigate navigating pushback isn’t the question we should be asking.

A better question is: “Why am I viewing my service as a commodity?”

If I go into TGI Fridays and order a steak, I know what I’m getting: a fairly decent steak in a family-friendly restaurant. I expect to pay $15 to $20 for it. But if I go and order a steak at Wolfgang Puck, I know I’m getting something entirely different. Yes, I’m getting a higher quality steak. But it isn’t just the product I’m buying. I’m also paying for the fine-dining experience and incredible service that comes along with my steak and I know that what I’m paying for is all wrapped up in the experience.

Imagine Wolfgang Puck asking himself, “How can we explain the markup on steak to our clients? How can we convince them to buy ours for $60, when they can go to TGI Fridays and get a steak for $15?” It just wouldn’t happen. justify his prices. And if someone were to push back, they would likely be escorted out of the restaurant.

Even if we were in an alternate universe and the cut of steak at both restaurants was identical, we would still expect to pay more at the restaurant with a Michelin star. It’s not just because of the chef’s name or the restaurant’s reputation, but it’s because of the value of the experience Puck’s restaurant offers.

Interior designers aren’t offering the $15 steak. And, more importantly, your clients aren’t looking for the $15 steak. They aren’t looking for the biggest discount or cheapest price, they’re looking for getting the best services to create their desired project.

When you ask yourself, “How can I explain my markup on this sofa or this table when my client can go on the internet for cheaper?” you’re thinking about your service entirely wrong.

You offer a luxury service, not a shoppable commodity. You aren’t just selling the sofa or the table; you’re selling your expertise, artistic eye, creativity and ability to see the room cohesively. And, ultimately, you’re selling your talents to realize your client’s vision. Not sure about this? Just think, if I lined up 10 different designers, gave them each the identical sofa and said, “Design a living room with this piece,” each designer would come up with a completely different design.

Even if I gave the designers the exact same pieces for the room, the rooms wouldn’t look identical. Your genius is the design, not the furniture in the design.

Your client can go and find the sofa for less money. Who cares, because they cannot replicate what you do for them.

Be The Choice

If you want to work with clients who go to Wolfgang Puck rather than TGI Fridays, then you can’t think of your work as an interior designer as a commodity. Design is a luxury—a luxury that clients are willing to pay for. There’s a reason why they are coming to you and not doing the selections and shopping on their own.

They want your vision. They want your experience. They want the luxury of service.

But this doesn’t mean that clients who want the luxury service aren’t concerned about budgets and costs. When Sarah Magness was on my podcast, “A WellDesigned Business,” she emphasized that budget is always a concern for clients, regardless the scale of the project. But, there’s a key difference: Clients who understand the value of your services aren’t concerned about the price tag; they are asking about the investment. They are asking you to show the value that their investment in you and your designs brings to their project.

Understanding this important concept opens the door for you to have a new way of thinking, proposing and selling your work.

If a client asks you about your price, do not backpedal, hem and haw or justify the cost of a line item. The way to answer is to clearly communicate the value that you offer and bring to the project.

Maybe the client doesn’t know and/or understand the time and effort that goes into creating the vision for the project. It’s your job to explain the design process. There’s a difference between communicating to a client the prices versus the value you offer. This is the difference between justifying and explaining.

So, how do you get to the point where you’re explaining your value? It starts with you.

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Understand Your Value

If you don’t know your value, the value yourself, how can you ask your clients to understand?

If you present your proposal without understanding that you’re providing much more than a commodity, how are you going to explain your proposal with confidence?

You have to shatter the belief that you’re simply sourcing furniture. I know that in your gut you know this, but if you have an inner voice that says, “Why is someone going to pay me for this?” then the place where you need to start is truly understanding your value and worth.

Know Your Prices Along with understanding the value you offer, you also need to know how you’re establishing your fees. Get a clear understanding about your rates—establish a specific hourly rate—whether you charge a flat fee or by the hour. Then, set your percent markups for every vendor and product that you offer. These are things that should be done ahead of time; meaning, if you don’t have this completed, do it now. You cannot wing it when it comes to pricing, especially if you intend to be profitable. Kimberly Merlitti, the virtual CFO, talked about this on my podcast. She recommends sitting down and estimating the hours that it will take to complete each room of the project before creating the contract. Then, it’s important to track the hours in a spreadsheet and update it after the project is completed. I suggest you add to this the list of your vendors and the markups. This may sound tedious, but I believe it’s tedious continuing to be in business year after year and not earning what you’re worth. Ultimately, you have to get to the point where you have a process and a system for creating your prices, both for the formal proposal as well as for the informal answer to the client’s question, “What kind of investment am I looking at for this project?” The more experience and background knowledge you have, the easier it is to easily provide a reasonable ballpark investment. But, there are ways, even as a new designer, you can provide an answer with more than a “Uh, it depends.” In Magness’ experience, interiors came in at 15% to 18% of the overall construction. So, start with asking, “What was your price per square foot?” and then work backward. This is an easy way to give a ballpark investment in the moment.

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3Always Clearly Communicate Value Magness also pointed out that clear and effective communication removes any questions or pushback that might come up. When you understand the value you bring to the table, you can communicate it with confidence and represent your prices and fees in a manner that supports your value and worth. A lot of this comes from the ways in which you communicate. Do you give your prices over the phone, with your voice shaking? Do you say, “I know it’s a lot, but the total is going to be X?” Do you approach the conversation already prepared for pushback? Or do you come across selfassured with a complete written proposal that showcases everything you’re doing? I think it’s important to have an itemized breakdown of the hard numbers: cost of goods, number of design hours, cost of freight, etc. You may or may not need to itemize everything to your client depending on your process, but knowing the hard costs allows you to remain firm and explain the ultimate value you’re offering the client.

4Don’t Discount, Add Value Adding value is always better than having to alter your prices. A little nuance in your approach can entirely change the situation. When Cheryl Clendenon was on my podcast, she demonstrated this brilliantly. Say you could offer your client a $1,000 chandelier or a $2,000 chandelier. Now, you know you’re going to make $500 on the one that is $1,000 or $1,000 on the one that is $2,000. You also know that the $2,000 option will make for better photos for your portfolio, but your client is worried about the budget. Instead of saying, “OK, I guess I could offer this chandelier for a cheaper price,” Clendenon said, “You know what, I really feel like this other chandelier is better for the project. So, if you play ball with me, I’ll get you a better deal here.” She’s smoothly upselling. If she gives them that chandelier for $1,250, she’s increased her own bottom line by $250. And, in the process, she’s left the client feeling like they are getting a deal too good to pass up. Find places where you can compromise and compromise in a way that adds value rather than emphasizing a discount or cheaper price. Work with your clients without hedging or appearing flaky on pricing.

Focus The Sale On Your Value Your presentation matters. For 25 years, there was a Hunter Douglas gallery down the street from my business Window Works. But, I rarely had to compete for business. It focused on product: the features of Hunter Douglas window treatments. We focused on the experience. We shared the Window Works story, the value of our team and our excellent customer service, not the features of a Duette. We said, “When you decide to work with Window Works, you are getting a company that has years of experience and expertise, our installers are Window Works’ employees, not subcontractors, we have a customer service team who answer the phone when you call…” We sold the value of Window Works. We didn’t get into conversations about how much the blinds cost here versus another retailer. The client who wants service and understands the value of you guiding them to the best quality of products will pay for your goods and services. The truth is: We offer the same product as thousands of window treatment retailers, but I sell the entire client experience, not the commodity items listed on the invoice. Find a way to position your service as stellar with great customer service and your clients will rarely look elsewhere for something cheaper.

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Value is essential when establishing pricing.

6Reframe Your Mindset The bottom line is as a designer you don’t offer something shoppable. You aren’t an online commodity. You’re cultivating a service that your clients are willing to pay for—as long as you can clearly communicate the value you bring to the project. Understand your worth and demonstrate your value to your clients. When you can do this, you’ll stop attracting clients who want to haggle over prices and will attract clients who are more than happy to pay for the value of your talents, expertise and experience. V

With four decades of industry experience, LuAnn Nigara is an award-winning author, keynote speaker and the host of two podcasts: “A Well-Designed Business” and “Window Treatment For Profit.” She is also part of the ownership team of the Livingston, New Jersey-based Exciting Windows! and Window Works. Through Exciting Windows!, LuAnn University and her one-on-one coaching services, Nigara teaches window treatment pros and interior designers how to operate profitable businesses.

LuAnnNigara.com, LuAnnUniversity.com, ExcitingWindows.biz