Pricing levels for design proposals

[Roderick Anderson]

Hi everybody. Today I sent my first design proposal to a client based on three price or service levels, somewhat based on an article on Enoch’s Business of Architecture site here:

https://www.businessofarchitecture.com/business/write-killer-architecture-proposal/

I am pretty sure that I had previously seen either a webinar or video from somewhere that I cannot remember that talked about the psychology of why doing three price levels, and how to “manipulate” the different pricing in order to allow the client the power of choice, but also to end up steering the client into making their own choice into the premium level of service with the higher fees…. Anybody have an idea of what I am talking about? I wanted to try to check back on that video because I remember it had interesting tidbits on the psychology of how to manage the pricing structure to be able to get the client to make the choice that I want them to.

How To Write a Killer Architecture Proposal (and Earn 20% More Revenue)

Is it really possible to earn 20% more revenue with this simple strategy? Discover how to get more out of every architecture proposal.

[David Sisson]

Tried this once but no result because the client didn’t like any of the prices. But it’s a great idea-will be using it again.

[Richard Petrie]

if all the huge companies use multiple options then it might be a very good idea – just make sure to remove enough work and effort from your bottom option so that if they go cheap you still dont mind because you dont do much

[Bruce Mitchinson]

Nice one Roderick, I don’t know anything about a video but grab yourself a copy of ‘Million Dollar Consulting Proposals’ by Alan Weiss. It’s all in there.

[Roderick Anderson]

Hey Richard, you are correct in that there is always the chance they go cheap, and that is where it gets tricky. At least in my case I am regulated by my local architectural guild and there is a minimum amount of services I am mandated to provide, so it was tough coming up with the added services and features for the other two options and to create the “perception of value” in the higher option. We’ll see, I should hear back from the client later in the week.

[Roderick Anderson]

Richard Petrie maybe this is a good topic for discussion in this week’s call, I hope to try to be able to make it for the call this time.

[Tanya Shively]

I have had good luck with this strategy for my design clients. 90% go with the middle level (What they typically request and get from me on normal project) one has gone for the highest level, and two have gone for the lowest level. You are right about the lowest level being tricky. My lowest level has all design work but not site meetings- I am now telling them that site meetings are available at that level on hourly basis, but that most people prefer to just opt for the mid level to ensure they get best service. If they still opt for lowest level, you have to be sure to actually charge the hourly for anything outside that scope.

[Shannon Doyle]

Timing is awesome. I saw the link to this article and read it right before I had to write a proposal. Luckily for me, the project lined up perfectly for me to provide 3 “pacakges” for them to choose from… Time will tell but I really liked the flexibility provided here. This might not be an every-time event when I am writing my proposals but it will certainly come in handy.

[Mike Carter]

Good on you. hope it works out well. I was going to suggest its on the same lines as what Blue Turtle Consulting propose but I see Enoch has in fact referred to what Ian and Alexandra teach in their seminars as well. I’ve done these and they are really good. I note the reference is to focus on the benefits and not on the facts – its one thing I have not been able to shake so my 3 tiered proposals to date have not worked. Maybe its time to revisit – focus on the benefits and emotions and then leave the fact “ie all the bits each service excluded and includes” as an appendix for referral at the end after all the other contractual stuff.
I haven’t been able to break the kiwi psyche based on generations of pioneer DIY’ers who achieve amazing things on the smell of an oily rag and who are reluctant in paying top $ for added benefit. Seems to be a cultural thing whereby essentials are required and everything else is done on the wing. It is changing slowly as people value time more.

[Duncan Sinclair]

As I have a couple of proposals to do this next week for residential projects, I would be VERY interested in seeing any proposals in this format that anyone would like to share? Thanks in advance!

[David Sisson]

I’d also like to know what people are using for the levels-example-level one is design and construction docs. Level two is design, CDs & basic construction admin, level 3 is design, CDs and full bidding , contract negotiation and full construction admin.

I think the trick is:

-the price for level 1 will make you money for level 1 service.

– the price for levels 2&3 are the same – the price you REALLY want for the project.

– level 2 only exists to get them to go for the higher price and full service.

Level 1 = $1000
Level 2 = $9,500
Level 3 = $10,500

You are making money whichever way they go.

[Roderick Anderson]

Go Figure!! The client just responded saying he wanted the premium package. No negotiating price down, he’s negotiating time for execution but that’s fine!!

[Eric Bobrow]

Congratulations Roderick – glad to hear that your experiment worked. You’ve always been a real action-taker, awesome to see you continue to push forward and try things and take a risk.

[Roderick Anderson]

Bruce Mitchinson thanks for the recommendation about the book by Alan Weiss. Started reading it, but already implemented one of the ideas in the book’s introduction, which is to use a short final agreement that simply reaffirms the main important ideas on the proposal. I thought this was a great idea that I had never thought about. Put it into use and worked great also, since it was an easy document for the client to review and sign. Thanks !!

[David Sisson]

I’m working up my “Bronze, Silver, Gold, Platinum” levels of service and discovering it’s a difficult thing to 1) coherently describe each task we do in each phase in a way that the layperson will understand, 2) actually list all of the tasks, but edit out the boring parts 3) come up with new and innovative services that I can add on, especially services that are cheap for me to provide but I can sell for big $. I’d love to see what others are showing their clients, and I’ll also post mine ASAP. One example idea I’m going to provide – for the Gold and Platinum levels – is to provide the owner professional architectural photos of the completed project. I figure for top end projects I’m going to shoot them anyway, and pay a photographer anyway – this allows me to bill the client for this! I’ll throw in a beautiful framed print for the Platinum level 🙂

[Brandon Reed]

i love this idea and was wondering if anyone has a template they would be willing to share with the group to spark our inspiration…..i could really use an example to get mine up to par….thanks all!!

 

[David Sisson]

I will post mine once the rough draft is ready.

 

[John Jones]

I just sent out my first 3-tier proposal this morning. I had asked another think-tank forum I’m part of for a template as well, but no dice. This is an experiment I am so jazzed about… It’s one of those small projects was referred to me, but not in my niche (or target fee, or everything), and one I didn’t care if I got or not, even though I need more income. In any case, I had “ballparked” a fee range to the clients at the on-site consultation, and I could sense a bit of shock. Having just read about the 3-tier proposal in a recent email from Enoch, I thought this would be the perfect opportunity to experiment (since again, I didn’t care). So I closed the meeting saying I’d see what I could do with my fee by giving them “a couple options”. What I had “ballparked” included what I typically do (which I realized included services that aren’t completely necessary, just me going the distance). So in the end, I provided “Architecture Basic, Plus, and Premium” services.

[John Jones]

The “basic” service was under my ballpark quote, the “plus” was in the range of quote, but with less service than I was thinking at the time, and the “premium” was above the ballpark quote, but with the services I had in mind, plus some other “services” that were easy to add. I’ll share the results when I hear back from the potential clients. I say an earlier post about selling the benefits, which in my mind is hard to incorporate into a proposal that already incorporates 3 tiers of “features”. Hopefully, the benefits of the features in the matrix are readily apparent. If anyone has a solution to this, I’d love to hear it. Also, I’m happy to share my proposal, if someone can explain how I can upload a pdf file here. I’m a newbie to this forum. Thanks awesome marketing peeps!

[John Jones]

Brandon Reed, Designer and Landscape Architect – it was a pleasure meeting you at the SUMMIT!!!! Thank you (& Diana) for sharing a cab ride with me! If you shoot me an email John@JohnJonesAIA.com I’ll be happy to send you what I did (no guarantee of results yet). See you again! JJ

 

[John Jones]

Just wanted to report some feedback regarding three levels of service proposals. So far, I’ve offered three such proposals, fine-tuning each one after the other. The first proposal is still in limbo, due to family illness. The second proposal is still being considered by the client, hopefully, I’ll hear back this week. The latest proposal, which I sent that last week, was accepted by my client. They chose the mid level service, and negotiated on the price a little, Which was fine with me, because it was above what I typically would have offered. What was interesting is they had interviewed other architects who offered proposals at an hourly rate, but preferred my fixed fee proposal which was above their hourly rate , Because they knew or at least had uncertainty that their hours would exceed my fixed fee. They also commented they felt more comfortable with me and that I was more responsive than the other architects. Another comment they had was that it was nearly impossible to compare proposals from various architects, and I think that’s where my three tier proposal with fixed fees helped.

Once again, the old John Jones architect would have pre-negotiated himself down in the proposal. What an idiot. At least with the three-tier proposal I start with my pre- rate but scale back services, so with them picking the mid-level service, I’m getting more

[John Jones]

Typing from my iPhone, and perhaps exceeded characters, but hopefully that last post made sense!

[Rachel Burton]

I’m just working on my first three levels of service proposal – its taking a bit of time to write, but I am really happy with where it is going. Nice to hear how the rest of you are doing too.

[Roderick Anderson]

Hello everybody…. just got confirmation from a client for a new project, and once again the client has chosen the Premium package with all the services included…. no price haggling ! This is the best strategy I’ve used in years !

[Eric Bobrow]

Congratulations Roderick – you’ve always been an action-taker – that’s great to hear the results when you tried out this easy-to-implement strategy!

 

[Richard Petrie]

great work everyone – this is one of the easiest strategies to implement – yet also one of the most profitable

 

[Sandra Orlando Payne]

Watching and learning…

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