Comments on: Best in Class Strategy Polls – Client Views of Rates and Fees http://blog.designfacilitator.com/2010/01/14/best-in-class-strategy-polls-client-views-of-rates-and-fees/ The DesignFacilitator Blog is a client feedback weblog created and updated by the DesignFacilitator staff. Wed, 16 Jun 2010 19:51:29 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Mike Phillips http://blog.designfacilitator.com/2010/01/14/best-in-class-strategy-polls-client-views-of-rates-and-fees/comment-page-1/#comment-319 Mike Phillips Fri, 15 Jan 2010 21:05:32 +0000 http://blog.designfacilitator.com/?p=970#comment-319 I agree with Steve about many of our clients not understanding the scope of work we price in our fees. This allows a large variance of care and effort assigned to a project when writing a proposal. Lower fees reduces the amount of effort available to do the work, often forcing the project to be rushed which reduces quality and increases problems. With so many firms pricing a substantial percentage of their work at or below cost (see poll results below), every firm suffers from a decay of their value caused by the manner the other firms are setting fees. We don't tend to have profit margins that allow deep fee cuts, so staff and firm owners suffer. The real frustration is that we often cut fees because of inaccurately judging our value to our clients. Knowing better what your clients really think of your firm's work, can lead to fee INCREASES. Not only do you know when they think you have earned it, but you also know how to earn more. I agree with Steve about many of our clients not understanding the scope of work we price in our fees. This allows a large variance of care and effort assigned to a project when writing a proposal. Lower fees reduces the amount of effort available to do the work, often forcing the project to be rushed which reduces quality and increases problems.
With so many firms pricing a substantial percentage of their work at or below cost (see poll results below), every firm suffers from a decay of their value caused by the manner the other firms are setting fees.
We don’t tend to have profit margins that allow deep fee cuts, so staff and firm owners suffer.
The real frustration is that we often cut fees because of inaccurately judging our value to our clients. Knowing better what your clients really think of your firm’s work, can lead to fee INCREASES. Not only do you know when they think you have earned it, but you also know how to earn more.

]]> By: Tweets that mention Best in Class Strategy Polls – Client Views of Rates and Fees | DesignFacilitator Blog -- Topsy.com http://blog.designfacilitator.com/2010/01/14/best-in-class-strategy-polls-client-views-of-rates-and-fees/comment-page-1/#comment-306 Tweets that mention Best in Class Strategy Polls – Client Views of Rates and Fees | DesignFacilitator Blog -- Topsy.com Fri, 15 Jan 2010 06:05:56 +0000 http://blog.designfacilitator.com/?p=970#comment-306 [...] This post was mentioned on Twitter by DesignFaciliator, Mike Phillips. Mike Phillips said: Take our latest Best In Class Poll about how clients view fees - http://bit.ly/6amGE1 [...] [...] This post was mentioned on Twitter by DesignFaciliator, Mike Phillips. Mike Phillips said: Take our latest Best In Class Poll about how clients view fees – http://bit.ly/6amGE1 [...]

]]> By: Steve Tomko http://blog.designfacilitator.com/2010/01/14/best-in-class-strategy-polls-client-views-of-rates-and-fees/comment-page-1/#comment-301 Steve Tomko Thu, 14 Jan 2010 23:03:30 +0000 http://blog.designfacilitator.com/?p=970#comment-301 A few weeks ago, on the same day, I had a client say he was probably not going to be able to award us a specific project because our proposal was too inexpensive (in this case we were competing against much, much larger firms but didn't know it beforehand), and another client said they had to go slowly because our proposal was somewhat too expensive (we were competing against larger local firms). Each proposal was made on the same basis of the actual work required to perform the design and drawings. I really don't know what our clients think about our fees versus profit, and our fees versus value. In many cases, I don't think our clients have any idea what elements affect a design proposal, or why they need to understand the size and location of the firms they invite to propose. A few weeks ago, on the same day, I had a client say he was probably not going to be able to award us a specific project because our proposal was too inexpensive (in this case we were competing against much, much larger firms but didn’t know it beforehand), and another client said they had to go slowly because our proposal was somewhat too expensive (we were competing against larger local firms). Each proposal was made on the same basis of the actual work required to perform the design and drawings.

I really don’t know what our clients think about our fees versus profit, and our fees versus value. In many cases, I don’t think our clients have any idea what elements affect a design proposal, or why they need to understand the size and location of the firms they invite to propose.

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