Think of a skilled profession where you don’t have to pay a consultation fee. If you had trouble thinking of a field where this happens, it’s because it’s rare for people to give away their expertise for free.
Yet it is a common practice for those who do offer design/build services to not charge for their landscape designs. This can be due to a fear of scaring potential customers away or the knowledge that other businesses in the market aren’t charging for their designs.
Borst Landscape & Design based in Allendale, New Jersey, has been charging design fees for the past 20 years.
“When I was selling myself in the company, I’ve always charged a design fee,” says Mark Borst, LIC, president and owner of Borst Landscape. “We had new designers that came on board 20 years ago and said, ‘I don’t have much business I’m not going to charge’ so we learned pretty quickly back then that charging for the design makes a lot of sense. What we found when we didn’t charge for design is that we had a lot of people just shopping us.”
Borst argues that people don’t value the design work if it’s for free. Cole Weller, president and CEO of Weller Brothers Landscaping, based in Sioux Falls, South Dakota, says with the surge in demand recently, they decided it was the right time to implement design fees. He says in the past they were reluctant to add fees because no one else in their market was charging for landscape designs.
“We’re a design/build company,” Weller says. “We’re not making our money off design fees. It takes a lot of administrative time to put together a design and a proposal for a customer, especially on the design-heavy projects that we engage in. Really, just to recoup some of that illustrative time is the biggest thing for us.”
Benefits of Design Fees
Since adding the design fees, Weller says they have discovered their target customer base is willing to pay for their design work.
“It definitely does help filter down or vet our customers, which is really important to us too,” Weller says. “We know that not every single customer out there is our customer. If someone tells us, ‘Yeah, I don’t think we’re willing to pay that,’ that’s not offensive to us and we understand that. We have a number of our smaller competitors we might even give them their names and say, ‘Hey, call this guy. He might be willing to draw something up for you free of charge.’”
Weller says charging also helps them recuperate the administrative and design time costs. Borst agrees that adding the landscape design fees helps them qualify their leads as well.
“They’re probably not serious enough about the project or they aren’t willing to put the money into the project,” Borst says. “They can definitely find a competitor that would do the project cheaper. (It) sounds to me if they’re not paying the design fee that they’re price shopping already.”
Implementing a Design Fee
Once you’ve decided you want to start charging for your designs, you have to determine how you want to set the pricing. Borst says they base the fee on an hourly rate. Their designers will look at the project to estimate how many hours they will spend on the design.
If the client decides to do the project with Borst Landscape then the design fee is credited back to them. However, Borst says the cost of the design is built into the project estimate, so their costs are covered for the time spent on the design. He says they opt to reimburse customers for the design as it comes across as give and take with the client.
Weller says they also charge an hourly rate with minimums. He says their current hourly rate is already outdated, but they’re keeping it at $85 an hour since it’s only their second year charging for designs. You can also consider offering a good, better, best pricing model for the design fees if you serve a range of customers who might be more sensitive to prices.
Weller says one major key to being successful when implementing design fees is to get the sales team on board.
“If they’re thinking ‘Boy, you really shouldn’t be charging for this’ because they’re just accustomed to not charging for it, you’ve really got to get that mindset changed,” Weller says. “Get them to stand behind it, get them bought into it and then once you have that bought into it, it becomes really easy.”
He says once their salespeople understood the market is willing to pay for good, quality design work, they realized they should have started charging a long time ago.
Weller says it’s not about defending why you charge design fees but covering your costs and placing value on your designers’ expertise.
“If you’re in design/build, you’re still incurring costs when you have a designer sitting at their desk for 10, 30, 50 hours,” Weller says. “You’re paying that individual to sit there and do that. So, make the decision, get everyone on board and then don’t back down.”
After committing to charging landscape design fees, stay firm and understand that some potential clients will say no to paying the fees, but there are the leads you weren’t going to close a project with in the first place.
“I would say just do it,” Borst says. “It’s not even something you really need to think about. You’ll save yourself so much aggravation of chasing the people that are looking for free designs. It’ll save you so much headache on wasting time on that kind of stuff.”To the design/build companies afraid they’ll lose business because no one will pay the fees, Borst points out when’s the last time you contacted an architect, and they’ll say they’ll draw you a design for free?
“Why would I give all my expertise away for free?” Borst says. “It makes no sense to me.”