KBB - September 2010 - (Page 46)

Practice Design Fees To charge or not to charge? That is the question It’s a heated debate that polarizes kitchen designers very quickly. In one camp are the designers who charge design fees; in the other are those who never do. Here’s how the argument usually shakes out: at—or below—the level of less experienced designers typically found at the big box retailers who don’t charge design fees,” said Jackson. The reality is design fees aren’t really used by the best kitchen designers. In a recent study, CompanionCabinet Software interYOU SHOULD CHARGE… YOU SHOULD NOT CHARGE viewed more than 100 high-performing designers, and not one of them used a design fee. “Even if dealer management Design fees are a great qualifier… But most prospects won’t set foot into your showroom if they hear you charge fees. required it, they worked around it or ignored it,” said Jackson. “The clear differentiator in stellar sales production is the Design fees are the norm… Your design fees aren’t seen as the norm from use of a sales process. Just that one behavior alone jumps a prospect’s perspective. designers into the $720,000 to $1.2 million range,” said JackCharging a design fee implies you Not charging a design fee is a true test of son. “Dealers should focus on implementing an easy-tohave confidence… your confidence. understand sales process specific to the cabinet industry. I’ve been charging design fees for 10 years… You’ve also been speeding for 10 years, but Once designers begin qualifying better, the need for a that doesn’t make it a good idea. design fee rapidly disappears.” So why are dealers still charging design fees? “You have You can’t get my designs anywhere else… Yes, you can. Prospects aren’t educated and believe they can get your design right this philosophy in the cabinet industry that the longer you’ve down the street for free. been doing something, the more it becomes a badge of honor,” said Anderson. “Salespeople tell me all the time they’ve My closing rates are higher… But your yearly sales volume is lower. been doing something for 30 years, which makes it legit. These So who’s right? Should you charge a design fee or not? are the same people who usually complain that no one is buying, yet right Before the market slowdown, business was booming and prospects down the street I know of other kitchen designers who are killing it.” were buying kitchens. “It was like the California Gold Rush,” said John In addition, charging a design fee has somehow become linked to Anderson, owner of Southern Kitchens in Louisville, KY. the ongoing struggle for designers to be perceived as professionals. “When you have an excess of prospects to deal with, the cabinet sales “That’s really the root of the problem,” said Jackson. “If charging a manager soon realizes a ton of business is out there, but the sales team is design fee is synonymous with being a professional, then not charging a spending 90 percent of their time designing instead of selling,” said Brent design fee is telling your peers that you’re no longer professional. That’s Jackson, president of CompanionCabinet Software in Charlotte, NC. really the wrong way to think about it.” “That’s a hard pill to swallow as an owner because you can literally see Most of the time designers charge fees to prevent a prospect from business walking out the door.” walking away. Even after the fee is paid, they won’t release the designs As a result, many dealerships implemented design fees to discourunless the entire kitchen is purchased. However, as Jackson noted, age tire-kickers. “The problem is design fees also send qualified buyers “From the prospect’s viewpoint, you’re asking them to make a nonout the door quickly,” Jackson said. refundable pre-deposit because you, the designer, are afraid they’ll CompanionCabinet Software has analyzed 10 years of aggregate walk. That’s the worst way to start off a new relationship.” quoting data from cabinet designers using its software. “When design So which is more professional: Demanding payment from someone fees are used, we see overall sales revenue drop anywhere from 50 to before he or she has committed to buying a kitchen from you or learning 75 percent,” said Jackson. “The existence of a design fee is a telltale sign a sales process that helps you correctly qualify a prospect up front?” s of an ineffective sales process—or worse yet, no sales process at all.” Looking at a sample size of more than 1,000 designers across a peri—Lisa Furby is marketing manager at CompanionCabinet Software, od of two years, the company found that those who used a design fee which helps cabinet dealers become more profitable using Aurora softtypically sold $180,000 to $400,000 per year. That’s abysmally low. “The ware, sales training and best practices. For information on a sales process data clearly shows that experienced designers using design fees sold specific to the cabinet industry, visit http://kbb.thinkcompanion.com. 46 + K BB September July 2004 2010 / www.kbbonline.com / The Official Sponsor of KBIS www.kbis.com http://kbb.thinkcompanion.com http://www.kbbonline.com http://www.kbis.com

Table of Contents for the Digital Edition of KBB - September 2010

KBB - September 2010
Contents
Online Contents
Online News
Editor's Note
Trends
Products
Profile
Design
Good Natured
High Design
Practice
Education
Editorial Index
Ad Index
Favorites

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