Posts filed under ‘Client Relations’

The Money Mirror

Take a moment to think about our ingrained training regarding money. People are “filthy rich” or loaded with “dirty money.” Those who don’t get business degrees are doomed to become “starving arists”, but everybody better get to work anyway because “time is money.” Money is unnatural because “it doesn’t grow on trees” and it’s alright to struggle financially because, after all, money can’t you love or happiness. Besides, everyone knows, “money is the root of all evil.”

These issues are rarely directly addresses when designers discuss pricing, but our ambiguous emotions regarding money certainly play a part. As an industry we frequently undercharge because:

  1. We based our prices on our perceived competitive set…and they’re already undercharging
  2. We are fearful that a lack of credentials mean we can’t charge as much as some one who has [check any that apply] ___ been in business longer  ___ more training  ___ an office/studio/retail location ___ other
  3. We’re afraid of looking greedy/aggressive/“snooty”/“out-of-touch”/etc. 

Our attitude toward making money from our skills, talents and abilities is a reflection of ourselves. It’s a mirror of our self-worth; and as solo or small practitioners our inability to look into that mirror and see the results accurately often sabotages our best efforts to grow our business.

What does your money mirror say to you?

10 July 2008 at 3:39 pm Leave a comment

Designer Definitions

One of the most frequent topics of discussion to come up whenever Deb and I run a seminar or presentation regards identity and definitions.

In some states, of course, the phrase interior designer can only be used by a licensed professional, so many believe, by default, that interior decorator is a “lesser” choice. I’d like to point out, however, that many of our best known, most praised design talents in the U.S. were (and are) proud to be know as decorators… reaching back to Dorothy Draper, Billy Baldwin, Sister Parish, Mario Buatta, Charlotte Moss, etc. 

But this concern over “what to call myself” is usually a cover debate for “how can I charge”, meaning does a designer have a greater perceived value to the client than a decorator? If you’ve ever found yourself having this discussion with yourself, your staff, etc. you’ve allowed yourself to become distracted from the key issue by semantics. 

And what is the key issue? You need to ask how you perceive yourself. Are you a color specialist? Are you a fantastic resource? Are you a good listener? Are you a problem-solver? Are you a space strategist? It all goes back to how you present yourself to your clients and what value you bring to them.

So our response to the designer/decorator debate? It doesn’t really matter that much. Get yourself out of the design-world bubble and start thinking bigger. Who gets called in when there’s an issue that can’t be solved  internally? Who gets paid the big bucks to advise, research, strategize and plan? Consultants!

You don’t have to call yourself a design consultant, but you do need to think of yourself that way. Why? Well, how about this really, really brief summary of Alan Weiss’ book Million Dollar Consulting.

* Focus on the value you deliver.
* Never count hours or charge by the hour.
* Make a case for what you can deliver. Once you’ve got your client on board, present your “fee” as an given.

According to Weiss, the client will almost always bite.

As always, we welcome your thoughts on this!

 

9 July 2008 at 5:45 pm 1 comment

Must-Dos (and Don’ts) for E-Mail Marketing

A couple of my clients have been going through some tough times with their e-mail promotions and their trials and tribulations highlight some of the big dos and don’ts in the e-mail age.

DO:

  1. Use a professional e-mail marketing service
     I can’t stress enough the importance of using an “e-mail house” for your promotions. These services provide easy-to-use templates for announcements, newsletters,  invitations, etc. where you can add your own logo, graphics, and more to create a customized look. But most importantly these companies have “white list” agreements with most of the major internet service providers so that your e-mail is less likely to get bounced as spam or shunted to the recipient’s junk folder. 
     
  2. Pay attention to the subject line
    Oh, you’ve worked hard on your list and you have a great offer, but you send it out with a lame subject line like “Spring Into Savings–All April Long” or “We Have Your Decorating Answers”. What’s wrong with these? They’re written like advertising copy, where the rest of info to support the claim is usually able to be quickly scanned for confirmation. But with an e-mail you only have your subject line to capture attention. When it comes to e-mail marketing, the best subject lines tell what’s inside; they don’t sell what’s inside.
     
  3.  Keep your lists updated
     First, you should have multiple lists. One for vendors, one for previous customers, one for leads, one for press, etc. Then you should also be able to overlap and sort them past on the purpose of the e-mail. Perhaps everyone gets your e-mail newsletter, but only certain customers are notified of a special offer and so on. If an e-mail is returned as undeliverable, you will be notified, but it’s still up to you to check on the reason why. Perhaps it’s a simple typo, or perhaps the company changed it’s e-mail protocol. Don’t assume every undeliverable is no longer any good, a minute of research could save you a valuable contact. On the other hand, be sure to purge your list of addresses you can confirm are no longer valid.
     
  4. Check your stats
     E-mail marketing services allow users to track the performance of an e-mail, showing open rates (25% should be what you’re aiming for) and click-throughs to any web address embedded in the e-mail. Once you’re confident in the quality of your list, it’s not a bad idea to run a few experiments… try different subject lines to different portions of your list on a newsletter to see which pulls the higher returns or try two different versions of a similar sales offer, etc. This way you’ll get a better feel of what your base responds to. 

DON’TS

  1. Get labeled as a spammer
    Most e-mail marketing services require that you have a relationship with a contact prior to adding the name to your list. This is commonly known as permission-based marketing. Obviously the e-mail marketer cannot verify that relationship prior to sending the e-mail, but anyone who receives your e-mail will have the automatic option of reporting it as span and will be immediately unsubscribed from your list. You will not be able to add them to your list again. And is your e-mail receives over a certain percentage of unsubscribe requests, the e-mail marketing service may ban you from the system.
     
  2. Abuse/Overuse your list
    The relatively low cost of e-mail promotions makes it tempting to send a flurry of news, updates, promotions and more to your list. After all, there’s a lot going on in your business they should be aware of, right?  But I’m sure we’ve all been on the other end of endless e-mail campaigns from the catalog we bought from once, or the charity you sponsored your sister’s walkathon team, or whatever. Don’t go from being a must-read to an automatic delete.
     
  3. Forget to make an offer 
    Even a news announcement or a general newsletter should include some type of offer to continue the relationship…“Click here for the rest of the story…” “Check out more photos on our website” etc. Because getting them to open your e-mail is only one part of the process.

Your website hosting agreement may include an e-mail promotional opportunity, or it may be available through them for an upcharge, but my preference here is to go with a specialist. Here’s a list of some of the leaders in this field.

Constant Contact
Topica
Rapid Reach
Bronto
Murgent
Icontact
and newcomer Emma.

7 July 2008 at 5:17 pm Leave a comment

Tips From the Grocery Store

In this weekend’s Sunday business section of the NYTimes there was an interesting article on Heinen’s Fine Foods, a 17-store grocery chain in the Cleveland area. While Tom Heinen, who runs the business with his twin brother Jeff was certainly hearing complaints from customers on rising prices, so far most of his clients are sticking with him. The article goes on to note:

“Their loyalty suggests a couple of things about the kind of middle-and upper-class shoppers Heinen’s tends to attract. While they are concerned about price, they’re increasingly thinking about their foods’ origins and quality. So they would just as soon not trade down from a store like Heinen’s that offers handsome local radishes and an excellent stir-fry station.

And they almost certainly don’t want to drive around to six different stores cherry-picking deals. “With two adults working and the kids going to soccer, I defy you to show me how they can do it,” Mr. Heinen said.”

Heinen’s is facing competition for those customers, Whole Foods entered the Cleveland market last year, and of course, there’s price competition from other regional grocery chains. Even at the best of times, running a grocery store sounds like a tough way to make a living. Margins are incredibly low, the stores are both labor- and logistic-intensive and just think about how gets tossed out from every store, every day. 

Heinen offered a couple of suggestion for savings, some of the same ideas he’s been mentioning to his customers. Not all of them are applicable to the design business, (but they’re certainly good for your grocery bill, so check them out here) however a couple can immediately be put to use. 

  1. Offer Artisan-Quality Deals
    Heinen’s had won Cleveland Magazine’s “best cheese selection” award
    for several years running as was determined to keep the honor. But
    with diary prices up 14% and the drop of the dollar against the Euro,
    they knew they needed to make bigger changes. So they went to their
    vendors and asked for help in finding artisan-quality products at
    reasonable prices. The result has been a new in-store focus on
    “Heinen’s Great Value Cheeses”. 
    Lesson: Ask your vendors for assistance in finding unique resources
    that fit the needs of your clientele. And then make sure to package,
    brand and promote those unique resources.
     
  2.  Is It Local
    Deb and I have spoken for several years on the need to develop a
    network of local resources that can provide unique products and
    services to the design trade. It started out as a way to move yourself
    out of the head-to-head price comparisons with big-box stores and
    direct competition. But with increased fuel costs, which means increased
    shipping fees, plus the spillover of the “locavore” movement, people are
    more than interested in this kind of shopping experience.
    Lesson: Become the “resident expert” for all types of artists and crafts-
    people in your area. Remember 10-years ago when every designer needed
    to have a least one faux-finisher in the rolodex? Well it’s time to expand
    your resource list once again!

The article wraps up with a series of questions that are great to have in your arsenal for your next price shopper

“So this is what you have to ask yourself: If you are patronizing a grocer
that doubles your coupons, discounts your gasoline or runs other expensive
promotions, how exactly are they staying in business? Are they gouging you
on the second most popular brand when the most popular one goes on sale?
Do prices bounce around so frequently that it’s impossible to keep the baseline
in your head?

Shoppers can play the discount game and win by shopping six different stores,
buying only the sale items and products they have coupons for, buying in bulk
and then cooking from the pantry and freezer. But is that really the live most
of them want to live?”

Switch a few words and you’ve got a great defense for why you’re not the cheapest, why you don’t need to discount and what the real value of working with a design professional is.

As always, let us know what happens when you put any of these ideas into practice in your business.

30 June 2008 at 6:08 pm Leave a comment

Breaking Free of Self-Limitations

For most small business owners and solo practitioners business growth and expansion is often self-limiting. What I mean by that is the business is often only “you” and there’s only so much one person can handle and still have time for, you know, a life. This is especially true when revenue is based on billable hours; after all you can’t add more hours to the day!

One way around this self-limitation is to expand the capacity of your businesses most important asset–you!

Here’s a couple of ways to approach this:

  1. Learn More to Earn More
    Adding a new skill or ability to your offerings will not only make your business more appealing to new set of prospects, it will also give you a legitimate reason to get back in touch with past clients. Take the next couple of months to add one new talent to your roster and then make sure to get the word out.
     
  2. Increase Your Flexibility
    You’re smart, you’re talented and you’ve got a ton of great information in your head. Figure out some ways to make your knowledge earn for you without you having to be there. Think about how you can make your services and abilities more flexible in order to meet the needs of different clientele. Can you create a newsletter that shares your business expertise? Can you teach some of your skills to a new generation? How can you take your skills and f-l-e-x them to reach new markets.
     
  3. Transform Yourself From a Doer to a Leader
    Many business owners are the ‘doers’ in their business… they have built the business from scratch on their own and continue to do much of the work themselves, either out of habit or the need for control. And this, of course, can only take a business so far. As a leader your role is going to change, but it doesn’t need to be all heavy self-help books and stuff. Leaders have the ability to be passionate and hold true to a vision, and to inspire others to act based on that vision. And as mostly solo-preneurs, we’re pretty passionate!

When people grow, their business grows. So think about some of the options above and how you might implement them into your new business direction.

26 June 2008 at 3:38 pm Leave a comment

Learning to Fail

By now you’ve surely seen the ads for The Incredible Hulk movie starring Edward Norton. And, if any of you have young children or grandchildren, you might remember that there was another Incredible Hulk movie released not so long ago.

And you’d be right. In 2003 Marvel Comics revived the Hulk with a “major motion picture” with the intent to cash in on the successes of Spiderman (another Marvel comic), and Batman (a competitor). The eagerly awaited movie turned out to a major disappointment however, serving up more Bruce Banner than Hulk, and focusing on the despair and psychological trauma Banner creates and feels every time he lets his emotions get the best of him. Fanboys panned the movie, reviewers were lukewarm at best and the box office was terrible. 

The 2008 version starts off by rewriting the history established in the 2003 movie; it’s basically one big do-over. The 2008 Hulk is angry, aggressive and does a lot of smashing…which is what people who go to Hulk movie want to see. 

Marvel Comics had a very expensive and very public failure delivering on a brand promise to a target market. And, to the tune of another $150 million or so, they decided to demonstrate to that disappointed target market that the company heard, understood and was willing to do something to make it up. 

Now not everyone (ha!) had $150 million available to rethink, rework, repackage and revise a product to better fit the market, but the question for you is: What do you have (product, service, image, etc.) that isn’t quite fitting with your target market…and what are you willing to invest to fix it? 

25 June 2008 at 4:07 pm 2 comments

Prospecting Tips From “The Queen”

A few months ago I received a promotional e-mail from Wendy Weiss, the self-titled “Queen of Cold Calling.” I glanced at it quickly and then filed it away as a possible product I might be interested in. Sorting through my older e-mail folders today, I came across this again and discovered I hadn’t scrolled down far enough the first time and missed some really good ideas I want to pass on to all of you. 

The following phone prospecting tips are courtesy of Wendy Weiss…you’ve got to pay attention to the Queen!

(1)  Call your voice mail and practice your script yourself. It’s good practice and you will have a chance to hear how you sound to others.

(2)  When you listen to yourself on your voicemail check to make sure you’ve got energy in your voice, that you sound confident and assured.

(3)  Think about the impression you want to make and how you want your prospect to feel about what you are saying. You can draw your prospect in by the way you present your message. Think of it as “telephone theater.”

(4)  Eliminate the word “just” and all other minimizing words from your vocabulary. “I’m just calling because…” “I’m only calling because…” These types of approaches read as apology and dilute the power of your message.

(5)  Eliminate the phrases “I believe that…” And “I think that…” from your vocabulary. Who would you rather listen to? Someone who believes or thinks she knows something–or someone who simply knows it? The phrases “I believe” and “I think” detract from your message and from your power and authority.

(6)  Eliminate the phrase “Once we have completed… we will hopefully achieve…” No one pays you to “hopefully” do something. They pay you to do actually do it. Tell your prospects what they will achieve or should expect to achieve.

(7)  Don’t ever tell a prospect that you will “try” to do something for them. Tell them that you “will.” Who would you rather buy from: Some one who “tries” or someone who comes through?

(8)  If a prospect asks you a question and you are unclear as to the answer, it is perfectly acceptable to say, “I’ll find out.” It’s bad form to say, “I really am not sure.”

(9)  And speaking of “easy:” Always use “easy.” Never, ever say that your product or service is “difficult,” even if it is. In that case you can say, “We’ll make it easy for you.”

Try incorporating some of these ideas into your client pitches or prospecting calls and let us know if they work for you!

19 June 2008 at 3:58 pm Leave a comment

The Power of Social Proof

I live in NYC and I love to try new restaurants. But no matter how enticing I make it sound, if my boyfriend and I show up at place and it’s empty, he refuses to stay. He’s offered me two main reasons for his reluctance to be the only table in the joint.

1) When places are that slow, service is usually either overly solicitous
or incredibly negligent. From experience we know that to be true, so
no matter how great the food, it’s just not a very nice meal.

2) The psychological issue of “Why are we the only ones here?” “What
do other people know about this place that keeps them away”? He just
can’t get over that barrier. 

It’s that second factor that demonstrates the power of social proof. People feel more comfortable doing business with companies and people that are successful. An empty restaurant “feels” wrong to most of us, and so we’ll stay away. Now obviously someone always need to be first table of the night and many times we will walk into an empty restaurant because we know it and we trust what our experience will be. But to take a chance on something unknown AND unproven…that’s much tougher.

Unless you have a retail location, leveraging the power of social proof for your design business is bit more subtle. Testimonials on your website from multiple clients; a portfolio that illustrates the range of your experience and most importantly, legitimate referrals that you follow up on. These are all methods to show your prospects how many other people are doing (or have done) business with you. 

People are most comfortable doing business with those they know, like and trust. Social proof adds to the trust factor. A strong referral is an introduction you can’t afford not to follow up on. And the like part? That’s up to you!

13 May 2008 at 4:11 pm Leave a comment

Demystifying Fees: A pricing panel recap

I attended a pricing panel discussion today that was part of the Brooklyn Designs show. I wasn’t able to stay for all the Q&A at the end, but still managed to jot down some interesting notes. To see who was on the panel check out the description here. 

Following are some the comments I found to be most interesting. I’ve put the comments into quotes, but these are all really paraphrases of the notes I took!

“I used to bill Net 30 for purchases, but I realized my customers didn’t really 
get that. They couldn’t tell if that was a good deal for them, or a good deal
for me. Customers understand retail, so I now do my purchase pricing
in a Less Retail format. It’s actually more profitable for me and makes them
happier because they can immediately quantify the value.” 

“I can’t remember what seminar I it was, but several years ago I went to
a pricing presentation and one of the notes I took was that everyone
should go back and raise their fees 3%. Main reason: it’s not a big increase
but by the end of the year it will add up.”

“Fixed fees may seem cut and dried, but often become problematic. No
matter how well you think you’ve defined your scope of services, detailed
the project in a letter of agreement or contract, it’s 99% certain there will
be changes, revisions, delays, or other issues that will mean additional
non-projected work. Which means you have to go back to your client for
more money. That’s a situation which is never good for the relationship.”

“In commercial work, a common fee structure is a percentage of the build-
out costs. I’ve moved away from this because it causes trouble. There are
always going to be cost overruns and now the client is faced with having to
pay more to complete the job and pay you more based that…to them it feel
like they’re paying twice for other people’s problems. Again, a good way to
damage a client relationship.”

All in all, it was a pretty interesting discussion. One of the panel members has a current rate of $300/hr and charges overseas clients $350/hr! Of course, the old line about “not even a surgeon charges that much” came up, but I was thinking about that on my subway ride to the office. Most designers are independent practitioners, that hourly fees goes to cover all types of overhead that most surgeons (and many high-paid lawyers) do not directly have to account for. Meaning, the rate a lawyer at a leading law firm charges includes overhead charges, yes, but those costs are also disbursed in the rates of the jr. lawyers, the research assistants, etc. The fees are all there, but the shock of one $300/hr individual is spread out over the billable hours of several $75/hr and $150/hr other players.

And let’s face it: It costs a lot to run a business these days. Deb and I were just commiserating on the high costs of workman’s comp (not to mention all the other necessary business insurance policies) AND the fact that insurance audits seem to have become ever-more frequent.

When you look at it that way, $300/hr isn’t that much to charge to cover all the overhead (office rent, utilities, software, insurances, sampling, etc. for the main expenses) plus have enough to re-invest in your business, plus enough to pay your vendors, contract workers, etc. PLUS and most importantly, pay yourself! Because how many hours in a day or a week do you have available to bill? Certainly not eight hours a day, five days a week.

It was definitely an interesting hour! What do you think? Is $300/hr crazy or wonderful?

Note: I know I wrote yesterday that I would follow up with the second part of The New Yorker innovation piece, but I thought the pricing info was too good to sit on. I’ll get to the innovation piece next week.

9 May 2008 at 4:26 pm 1 comment

The Likeability Factor

The current close race to secure the Democratic presidential nomination has lead to a focus on electability. And if any of you follow any of the late-night talk shows, especially The Colbert Report and The Daily Show, you also know the issue of electability has become many comedy writer’s favorite go-to joke.

Why? Because how do you define the state of being electable as president, unless it has already occurred? The only people who know for sure who have presidential electability are those who have already served as president. And what bothers many people about politicians, across the political spectrum, is their willingness, indeed, their seeming compulsion, to change characteristics and beliefs in their desire to become more electable.

Which brings us to the Likeability issue many of us in the industry grapple with. To work effectively with a client, there has to been some level of mutual respect and understanding. A good client will appreciate your skills, insight, and talents, and value your ability to improve their surroundings. To deliver this type of service, we must be open, understanding and patient, remembering that we have the rare gift of being invited into someone’s home, someone’s life, in order to make a positive change. 

But, as we’ve discussed previously, projects can often become more than just about the design…we become part psychologist, part therapist. And this is where the things become murky. Too often we allow ourselves to let the Likeability Issue to become overly important, to the detriment of business.

1. You don’t bill for all your time, because she’s a “good client”

2. You don’t bill for all your time because she’s a new client and you’re trying to establish a good relationship

3. You don’t bill for all your time because it seems like she’ll be a good client and you don’t want to “scare” her off

4. You don’t bill for all your time because it seems like she’s going through a lot right now and you just want to make things a bit easier for her.

Recognize yourself in any of these? If so, you’re letting the Likeability Issue get in the way of your business. When people pay you money to make, do or provide something for them, that’s a business relationship, not a friendship. Don’t let your very real human desire to be liked get in the way of building a profitable business.

5 May 2008 at 6:26 pm 1 comment

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