Negotiating Design Fees
Ian Motley
I help Architects win better fees while reducing scope creep by applying 'Choice Architecture' to their fee proposals.
Are you thinking of lowering your design fee to win new work??
You’re not alone!?
Today I want to show you how to address this issue.
Let’s get started by looking at a common design fee negotiation scenario:?
Common scenario:
A new client approaches you and says they’ve heard many great things about your firm and would like to work with you.
They ask how much you’d charge to design their new and exciting project.
So you respond by proposing a fair and reasonable design fee.
The client gets back to you and says:
“We’d like to offer your firm the project; however, there is one problem… your design fees are much higher than the market will allow right now… would you like to reconsider your proposal?”
Hmm… that was not the response you were hoping for!
You’re now faced with the negotiator’s dilemma… if you say ‘no’ to this request… you risk losing the project… however, if you say ‘yes’… you risk losing your fee… so what should you do?
In a spirit of compromise, you respond with an enthusiastic reduction hoping it will finalize the deal.
Unfortunately, despite good intentions… your generous discount is met with more hesitation.
The Client is still keen to hire your firm… but they’re not quite ready to sign the contract.
So they respond by saying:
“Thank you for your revised 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 design fee reduction… there must be a better way!
So, what should you do?
To answer that question I’d like to refer you to the strategy described by William Ury and Roger Fisher in their bestselling book, Getting to Yes.
According to Ury and Fisher, a successful negotiation requires (at least) two things:
First, you must understand your client’s interests (pain points) and then,
you must ‘Create Options for Mutual Gain’ based on their interests.?
So, the next time you’re asked to lower your design fee, don’t just lower it hoping you’ll hit the right spot… because you won’t!… you’ll only encourage more negotiations.?
Instead, start the process by applying the following 2-step negotiation strategy.
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 assumptions.
To get the best results, don’t wait until you get to the negotiation table!
Instead, offer ‘options for mutual gain’ in your fee proposal document!
Yes, that’s right, put the negotiation before the negotiation!?
This is something we'll be teaching attendees at the Fee Proposal Workshop.
To learn more:
Austalia LIve Fee Proposal Workshop:
On-Line Fee Proposal Workshop:
Warm regards,
Ian Motley
Co-Founder?
Blue Turtle Consulting?