Dear Dakota: Should I Give Friends and Family a Discount?

Apr 14

Dear Dakota,
Should I give friends and family a discount? If so, how should I structure it so I don’t get burned?

Such a great question submitted by a designer and one you’re sure to run into often as an interior designer. Heck, I’m not even a designer, but because I work with designers, my friends and family ask if they can get my discount. Sigh.

If you want to draw a clear line and simply not work with friends or family, you can certainly do that (and some designers do). In that case, you would let friends and family know, as a policy, you don’t work with family and friends.

If you are open to working with friends and family, here are my thoughts:

CREATE A FRIENDS AND FAMILY POLICY!!

Or, if you don’t want to offer a “friends” policy because you work in a tight community and will have a hard time drawing the line between friend and acquaintance, don’t offer any special pricing or services for friends. Reserve that only for family so it’s very clear cut. Then, have ONE policy only. Not one policy for your sister and another one for your bff and another for your partner’s friends.

Once you have a clear “friends and family” policy (F&F), or maybe just a “family” policy established if you won’t work with friends, it will be so easy to communicate it to your team, share the information with friends and family who inquire, and actually enforce it once the project begins.

You will likely find that — when such an inquiry comes from a friend or family member — it is not approached in the same way a potential client would approach you, as in: “I have a design project that I need professional design services for, and I am interested in learning more about how you work.”

Instead, it will be in an all-too-familiar, assuming you will be all-too-happy, feeling more-than-entitled kind of approach. As in: “Hey, I REALLY need you to help me with my horrible kitchen. When can you come over? I’ll have wine!”

Would someone ask a relative for dental services or car repairs in the same way??? No. There is a perception among the public that what designers do is great fun. And it is! But don’t for a minute let anyone assume that it is without great value.

Having that “friends and family” policy in your back pocket means you can halt this momentum in the wrong direction — assuming you should be more than happy to do any and all design work just for the fun of it just because you are related — right from the start.

Your “F&F” policy could offer a better deal on your services and expertise compared to the way you conduct business with your other clients. More on how you could structure that below. But MAKE SURE to communicate that this is an accommodation you are making that is quite different than the standard way you work with clients. Make sure they know that THEY ARE GETTING A SPECIAL DEAL FROM YOU!!!

DEFINE YOUR SCOPE OF WORK

When you are undertaking a “F&F” project, make sure to clearly define the scope of work for the project. Outline the specific services and deliverables you will be providing, establish a clear timeline with milestones, include time for revisions and additional communication or visits, and spell out your business hours and preferred communication channels (especially if they will be communicating with your team).

Be sure to add in an additional chunk of time for communication, because you know it will be hard to put boundaries on your friends/family, so protect yourself by spelling it out.

USE A CONTRACT

Clearly communicate your pricing and any associated costs to your friend or family member upfront and use your contract. DO NOT SKIP THIS STEP. Use the same contract you use with your regular clients. It might feel odd to have your closest cousin sign a contract but do it anyway. Again, reiterate that they are getting this special service only because they are your friend/family.

FOLLOW YOUR TRIED AND TRUE PROCESS

Never deviate from your tried and true process, even for friends and family.

Let me say it louder for my friends in the back: Never deviate from your process.

YOU know what works for getting the best result, and you know that following your tried and true process is how you can work efficiently and profitably. If you’re considering discounting your products and services, it is IMPERATIVE that you are working as efficiently as possible to avoid getting burned and losing money by taking the project.

Here is another warning about doing work for family and friends. Because of their familiarity with you, they will not recognize the process to be transactional in the same way a client would — as in: there is a two-way responsibility for decision-making, professional communication, and respecting boundaries. They will instead see the design process as an extension of the casual relationship they have with you.

They’ll nag, they’ll hem and haw, they’ll gripe and complain.

They’ll want endless interaction.

They won’t feel compelled to wrap the process to allow you to move on.

They’ll openly communicate every thought they have, pulling you into their indecision, hesitancy, tight-fistedness.

Hold firm in your process to protect your time and your sanity. You want to make sure you are not taken advantage of.

ESTABLISH YOUR FRIENDS & FAMILY PRICING & SERVICE MODEL

Okay, so now the major question at hand: what exactly will you offer as a benefit to those who are close family or friends?? What “deal” will they get by having an interior designer in the family (or as a friend)??

When figuring out what to offer as accommodation for your friends and family, consider the costs associated with providing your services and products, such as time, labor, materials, and other expenses. Calculate your costs and include them in your pricing to ensure you cover your expenses and make a reasonable profit. You want to make sure that in providing a “deal” that someone else will benefit greatly from, you yourself are not getting screwed.

Friends & Family Product Pricing. My recommendation is to offer a lesser markup on materials and products. Here’s why: the friend or family member is getting a great benefit — being able to purchase to-the-trade only products at a great deal — usually significantly below MSRP (manufacturer’s suggested retail price). This is something!!! And make sure they realize that.

Notice, I said LESSER mark-up (from your net pricing), not NO mark-up. Your markup should still cover your time (or your team’s time) for placing any orders through you. If it doesn’t, you either shouldn’t offer that price OR, you should only specify from places where your friends/family can purchase directly so you aren’t involved in order management.

Friends & Family Service Fee Pricing. I do NOT recommend discounting your design fees or hourly rate for family and friends. This may be what they are expecting. But you should always be compensated appropriately for your time and expertise.

And, nothing gets more confusing than having ongoing clients year over year at different rates (one rate for clients, a lower rate for F&F). TRUST ME!! My designers who have clients at 4 different rates feel like their heads are going to explode.

Friends & Family Service Structure. Instead of discounting your hourly rate or flat fee pricing, here are some other things you could do:

Provide an initial consultation for free. That is a significant accommodation, and anyone should feel very happy at receiving your expertise in this format. Explain that, following this, your standard fees will kick in for the project duration.
Offer a smaller service you typically wouldn’t offer to a client (like a virtual design, a block of ten hours, a shopping trip, a site visit, a color consultation, a blueprint review, etc.).
Remove your minimum requirements for F&F (so if you have a minimum of 2 full rooms and a $100,000 furniture budget, waive that minimum and let them do a partial room with a $25,000 furniture budget.)
Shop only from retail sources, and let them handle the ordering and purchasing.

Ask any designer, and they will be able to tell you a story of aggravation and exploitation at being asked or expected to provide discounted (or free!!!) design services to people they know well. Sure, it’s great to know an interior designer! What a bonus!

But you should only compromise up to a point in allowing people to benefit from that. Decide where to draw the line. ANY professional work you perform should also benefit YOU. Avoid being taken advantage of by having an established policy for exactly how you handle these situations right from the start.

And as always, if you have a crazy F&F story to share, you know my email is always open and I am on board to create a reel about it for you.

Check out more designer-submitted questions and my advice here.