It’s one of the KBB retail community’s most discussed topics – whether you should charge a fee for design or not. What are the drawbacks? What are the benefits? And will it ever reach a conclusive answer? Toby Griffin investigates…
This month we’re attempting to find the answer to one of the questions that gets raised over and over – and that’s whether KBB retailers should charge a fee for their design time.
It’s also one of those topics that really splits opinion. Many believe that designers should stick by their skills and have the confidence to charge design fees. Others fear that, until there is an industry standard, consumers will use fees as an excuse to shop elsewhere.
Part of the issue in my experience is this slightly obscured line between whether we, in the KBB industry, are selling a specific thing or whether we are selling our design skills? A shop sells stuff, and those in creative and design roles in other industries sell their time, but our sector falls between two stools, sending mixed messages to consumers.
Anyone reading this will know just how important design and specification skills are in bringing together individual elements to make beautiful and practical rooms and spaces, and yet, for some reason, this is offered for ‘free’ most of the time; and this has become expected in the eyes of the public, often sadly used and abused.
Should we continue with this general approach or is there the opportunity to consider bringing in some element of charging for design? Let’s take a look at this age-old debate, consider how other businesses handle this topic, and maybe take on some new ideas.
When significant time is spent on design at the mid to high-end, should the costs be covered by behaving like architects and interior designers and charging a fee for our design services?
During my research for this analysis, I have uncovered many KBB retailers and designers who employ various techniques that bridge the gap between offering free design and charging for design.
While they seem to find them beneficial, it seems to me to hinge on one critical point: when is the first point at which money changes hands?
As anyone who’s attended an advanced sales training course will know, the power of loss is much greater than the power of gain, and therefore no one wants to ‘lose’ money – no matter how small an amount. Therefore, the first time money is handed over is key and I wanted to see when this point was for KBB retailers nationwide, so I set a poll on LinkedIn to ‘test the water’.
Asking my connections, the question: “What is the first payment your KBB retail business looks to take from a client?” I got the following responses: Almost two-thirds (64%) said this moment happens at the point of order; 21% said this was when the client asked for designs to be released to them; 12% said they wouldn’t start designing until some payment was received, and a small handful (4%) asked for payment to perform a technical survey.
With first payment being made on order being the norm, I was very interested to hear the thoughts of those who looked for earlier payment.
Chris Leighton, director of PHS Bathrooms in Milton Keynes, tells me: “We charge £500 to take away a design, redeemable as a credit against an order, as it helps me to qualify clients, and there is an opportunity cost to spending time with clients that don’t buy.
“I’ve found that if a client asks to take away a design and specification then it generally means they are going to shop around with it. But I might consider letting a standard 2D plan go without payment, but nothing more than that.”
He adds: “Because so many nationals give away designs and shopping lists, it gives the general public the impression that designs across the industry are free. I’ve been tempted by the idea of offering design and supply packages that have an upfront charge – say £500, £1,000, or £2,000 – and would build in a discount on the products ordered.”
So, there is certainly some blue-sky thinking going on.
Leighton’s approach is similar to that of Dan Hurtley, director of bespoke fitted manufacturer Dan Hurtley Limited, who says: “I have an initial phone call with clients and look to qualify them. I will often then do a 2D sketch in pencil and give them an idea of price in a quote. If they are happy, I take a 10% deposit – to secure the manufacturing slot – but warn them that, as the design develops in detail, if they start adding lots of ‘bells and whistles’, the price will go up. I’ve never had to return a deposit.”
The use of an early financial commitment being used as a qualification tool came up again and again in the course of conversations. Danny Wood, owner of Arbor Lane Interiors, and Julie James, showroom manager at Plumbits of Stafford, both offer the same sentiment.
“We will do one design for no charge,” Wood says, “but if they want changes made or further development, they must pay a 10% refundable deposit. I’ve only had to return two deposits.
“We want commitment. Otherwise, they’ll just give you lots of homework as they’re often just enjoying the process.”
James tells me that, until the client places an order – with a 50% deposit – they don’t get full designs and drawings.
“We used to give them away,” she explains, “but would never see the customers again. I will let them have a quick basic plan drawing for £100 sometimes, which covers my costs.”
Protection against a design being used for nefarious means is tricky, as Nick Munn, a designer at Christopher Peters Kitchens and Interiors in Leamington Spa, says: “I always worry that less scrupulous customers will be tempted to take my ideas to another company for a cheaper price.”
Just emphasising Munn’s reason for concern, freelance kitchen designer Allan Lovell tells me about a situation where not charging a fee backfired. “A year ago, I let a design go out without a charge, and the client took it to a competitor who had the same brand available. Brands are easy for clients to match, and then undercut.”
So how is this practice avoided? Lovell states that he deliberately designs in elements that are difficult for others to mimic but does also remind the client that he retains the design’s Intellectual Property.
Of those that look for payment even before starting a design in detail, Ethan Bowen, a designer at Andrew James Kitchens and Bedrooms in Wakefield, explains how charging for design helps them to filter out the time-wasters from the genuine clients. “If they’re not willing to pay the fee then they are probably just looking for ideas,” he says, “and we don’t want to waste a lot of time on dead-end leads.”
Josh Delane, a director at The Wood Works in London, explains that charging for designs is a reflection of the amount of time designers put into each project. “A huge amount of work goes into these drawings,” he says. “It can take one to two days of a designer’s time. When we used to send drawings before payment, our close rate was maybe 10%, as people would take drawings and try to find it made cheaper [elsewhere]. Now it’s more like 25% and people respect the time that goes into these drawings.”
Inga Kopala, managing director of Amberth Kitchens, Bathrooms and Interiors in London, agrees: “We charge £800+VAT per room, which is a fair deal for the work we put in. For this price we produce two unique designs to present, and sometimes work on a third in collaboration with the client. They own the designs, and we give them the SketchUp file, renders and a fully itemised quote.”
At Venhar and Wright Design in London, company director Izel Venhar explains that they offer clients a choice. “Although our preferred route is to give them the complete service from design, supply and installation, we do offer a design-only service too, and this is paid for before the design work starts,” she explains. “When clients want the complete service from us, we take a 30% deposit before release of designs.”
How much to charge, and whether this covers the real cost of producing a design – without an associated sale of products – is an interesting question, which I put to KBB specialists.
“The fee is more of a token commitment,” says Bowen of Andrew James Kitchens and Bedrooms. “If we were to fully charge for our time, fuel costs, software costs, and expertise, then it would make the charge prohibitively high and we would lose customers who otherwise would have bought from us.”
This feeling is mirrored by Munn of Christopher Peters Kitchens & Interiors, who says: “In the kitchen design industry, it is very difficult to charge the full cost of providing a bespoke design up front. I would say the fee we charge contributes to that work but doesn’t cover it fully.”
And Delane from The Wood Works agrees, saying: “It’s a token of commitment which acts as a holding deposit where they can have the drawings and we dispatch a project manager to go to site to commence the process.”
In common with Delane, most retailers I spoke to offer the design fee as a discount against the order value if the customer goes ahead and does a deal with the business.
It seems that in most cases where payment is sought prior to order, those retailers are in fact seeking commitment from their clients through the design fee, and – although understanding that it may lose them some business – it can save them a lot of wasted time which can offset this.
Also, as the price point moves out of the budget end and into the mid-to-higher end of the market, clients are less inclined to be motivated by a free design service, and more likely to understand and respect the sheer time and skill involved in creating a real design, as opposed to a quickly knocked-out plan.
It seems that there has been a race to the bottom when it comes to valuing design, in which customers win, but retailers lose.
“I would like to see the industry move more towards the interior design/architecture model of charging for a service separate to charging for a product,” says Bowen.
“To my mind, this is a fairer representation of the work involved and would allow customers to truly see where their money is going,” he concludes.
Oddly, there is also a moral factor to consider too; if the cost of our time – often wasted on those who don’t order – is only being covered by sales revenue, then are we making those who do order from us indirectly pay for the time spent with those that don’t?
A little food for thought.
What is Intellectual Property?
According to the Government’s website, Intellectual Property (IP) is something that you create using your mind – for example, a story, an invention, an artistic work or a symbol – and the laws around it are designed to stop people stealing or copying:
• The names of your products or brands;
• Your inventions;
• The design or look of your products;
• Things you write, make or produce.
Copyright, patents, designs and trademarks are all types of intellectual property protection. You get some types of protection automatically, others you have to apply for.
You own intellectual property if you: Created it (and it meets the requirements for copyright, a patent or a design); Bought intellectual property rights from the creator or a previous owner.
You can listen to this episode of The kbbreview Podcast all about charging for design. Use the player below, or go straight to it on Apple Podcasts, Spotify or YouTube