So here’s the big question that you often ask yourself, “Will I lose a potential customer if I try to charge them a home design fee for my custom home design service?”

When you think about it, you ask yourself, “Well, there’s a lot of builders who are just doing their design work for free, so what’s gonna happen if I charge a design fee?”

And that’s a fair question, because the last thing you wanna do is do all the work to try to get that lead and try to find a client who has a block, has the right budget, and then what, they’re just gonna walk because you tried to charge a design fee and your competitor didn’t?

– Yep. –

I personally know what it’s like when you’re looking at your work board and you’re saying, “You know what? We’ve got these homes all about to finish, and what have we got in our pipeline going forward?”

Maybe not too much. We could definitely use some more business.

So the temptation is always gonna be, “You know what? Let’s lower the friction for our customer and just do this for free.”

But there’s a big catch, and not a lot of people will tell you this, but realistically, you need to ask yourself three very important questions.

Q1: Are your home designs actually worth paying for?

Now, if you’re a builder of any kind of quality and you have a reasonably skilled home designer, then the answer is, of course, yes, you’re paying for that service, so why wouldn’t the customer pay for that service?

But if you can’t determine the value of that home design that your designer’s gonna put their time into, that they’re gonna craft a great brief with the client, they’re gonna take the time to assess the block to draw up a sketch in the style and the layout that the client wants, if that’s not worth paying for, then of course you’re gonna give it away for free.

But you and I know that, of course, that is worth paying for, because you’re paying for it.

You’re already spending your money to engage that designer.

So the question isn’t, “Is the design worth paying for?” Of course it should be. The real question you need to ask yourself is, “How do I convey the value that the client is getting when they pay for the design?”

Q2: How committed is this client to me as a builder and to my company?

Are they really serious about working with us, or are they just kind of shopping around?

You know, are they going to 10 different building companies and saying, “Hey, do my free design and I’ll see how they work out?”

Well, the last thing you want is a customer who isn’t serious in actually working with you to get what they want.

It means there’s a whole lot of holes in your sales process and you haven’t really locked them in into showing them the benefits of working with you.

So if they’re not really committed and you do a design for free, how much chance do you have of securing their business?

Aren’t you better off getting them to make the commitment there and then and figuring out how you can get them to commit to you as a building company so they stop talking to all of your competitors and actually focus on working with you because you’re the right choice for them.

See how the best builders win more work in our free guide.

Q3: Can you create a point of difference if other builders are handing out free design work?

Finally, because your competitors are doing design work free of charge, there’s an opportunity right there. There’s an opportunity in your market to create a point of difference between you and every other builder that says, “Hey, yeah, we’re doing your design for nothing.”

Now there’s a lot of things you can discuss here and there’s a lot of ways that you can dissect it, but I’m gonna give you one real legitimate answer that you can give to people when they say, “Well, we can get this design for free.”

And the most obvious thing is, if someone’s handing out these designs for free, how much time are they investing in getting that design right?

I mean, if everyone’s just going to these builders and getting free designs, they can’t give themselves fully to that project because they’ve got 10 others waiting.

They’ve got no commitment from the client.

So why would they invest more time?

And what you’ll find if you’ve been in the industry for any length of time, is that most people who are doing free design work is actually the salesman who is pulling out an old plan that kind of looks something like what the clients want, and they’re scratching and matching and saying, “Here you go, here’s your custom design.”

If you can convey that story to the client who’s thinking, “I might just get a free design because that sounds like a better deal for me,” versus, “I’m going to pay for a design, and this design is going to take their time.”

I really understand what I want and go away and create a plan that is perfect for me, that looks like no other home that’s ever been built because it’s got everything tailored to my block and everything that’s on my building wish list.

That’s the plan that I want.

And you know what?

If that price that you’re going to charge me is coming off my build price anyway, it’s already included, just like the guys who are doing the free design, they’re still going to pay for the service later on in the contract. What’s the difference?

It means they’re getting a better home design exactly suited for them, as opposed to getting a cheap design where they’re just rushed through it and crossing their fingers hoping you’ll buy it.

And this comes back to, is the home design worth paying for?

Of course.

This is your opportunity to tell your client what the process is like, what they actually go through. And that process can be very, very different to anything that they’re going to get from anyone else.

Most people doing the free home design aren’t getting the clients to do a fully detailed brief. They’re taking like little details. They’re not asking questions like you would if you’re starting from scratch.

So the obvious questions that come up are, if you charge for a custom home design fee and your competitors don’t, how much business will you lose?

But another question you want to ask yourself is, if we charge for a custom home design service, how many of those custom designs that we create will turn into building contracts?

And the difference is significant.

When we speak with building companies who do free designs, they’re lucky if they’re getting 10 or 20% of the work. If you speak to a builder who is charging a fair amount for their design service, even if it just covers their cost, but it’s in the range of five to $10,000.

What you’ll find is that those builders are closing in 75% of the deals because the clients are already committed and they’re already out of pocket. And the only way they’re going to get that back is through building.

So you’re winning business by charging for a home design versus just giving away business for free, giving away your service for nothing and crossing your fingers that they’re gonna like your design more than they’re gonna like some other builders.

I’ll leave you with that thought.

I hope you understand what my view is of the process.

If you’d like to speak to us about your digital marketing strategy, simply get in touch with us. We specialise in the new home building industry and have experience in all sectors of construction including new homes, renovations and extensions and suppliers and SAAS businesses.