ISSUE FOCUS: LANDSCAPE LIGHTING Design Consultation: Fee or Free?

Contractors often ask whether or not they should collect a fee for design consultation. I decided some years ago to implement a nominal hourly fee, which ranges between $60 and $150, determined by how far I must travel, for all new prospect design consultation meetings. Personally and professionally, it has had a huge positive impact on the growth of my business since then.

Before establishing my fee schedule, I would travel out to meet with what I thought were serious, qualified prospects to find they had no inclination to invest the kind of money it costs for one of my lighting systems. Some even had no intention of hiring me no matter what I did since they were do-it-yourselfers out for some free design and installation tips at my expense. I would return home feeling rejected and angry that I just wasted another three hours or so and burned $10 to $15 dollars of gasoline in the process. Being the single-person operation that I am, I realized I had to make a change in the way I conducted business. I could no longer spend unbillable time with prospects who might not buy from me. It just made sense to collect a fee at the end of our meeting and then credit it back to the client upon completion of their project.
 
Since collecting for design consultations, a mere 15 to 20 percent of the inquiries I get from prospects each year are unwilling to pay my fee. I have no way of knowing for sure how many of them would have bought from me, but I believe very few of them would have if they were unwilling to pay a nominal fee for consultation. Have I lost a few projects because of it? Maybe, but the financial and psychological costs to meet the numbers of those who wouldn’t have bought from me far outweigh those that would.

If you think your market won’t pay a consultation fee, first you must overcome your own preconceived beliefs and notions. They won’t pay for free estimates but they will pay for a design consultation that has greater perceived and actual value. There is a big difference between the two. In my immediate service area of southern California there is intense competition from landscape contractors, electricians and other general service trades who offer one form of outdoor lighting or another. It took courage for me to implement a fee since prospects have got such freedom of choice. This is precisely the reason you should collect a fee. You should be doing things differently than your competitors.
 
Perception is reality. The perception is that you must be successful and busy if you can afford to risk losing some prospects by charging for your time. You are positioning yourself as an expert and valued advisor in the marketplace. If you are just starting out new in the business of outdoor lighting then in the beginning you may not be very busy. But when you are perceived as the expert in your area who is compensated for his time rather then someone who runs all over town chasing down every lead, the calls from qualified customers will start coming in.
 
If you have any doubts, implement the policy that says customers not satisfied with the consultation do not have to pay the fee. To date, I have not gotten every project that I’ve gone out on, but I’ve never been denied the consulting fee.
 
If you experience constant resistance to your fee then perhaps you are not presenting it at the right time or in the right manner. If you still experience resistance than maybe you are marketing to the wrong clients and should make changes that will bring you more qualified prospects. Your quality of work and service after the initial sale should solidify your position in the marketplace.
 
You should waive your fee for any client who has done business with you before. If you have treated them right, you should be positioned in the role of trusted advisor by now. It should be a matter of when you can do the additional work and not if. Competitors should not even be in the picture by then and a meeting should simply be a formality to discuss details and the cost of their planned project.
 
In the end, the decision is ultimately yours. If your outdoor lighting sales are lacking, this may be the kick you need to jump-start your business. Even if you are doing well, charging a fee for your time adds to your bottom line and will bring you more qualified prospects. It has for me.

The author is owner of Gambino Landscape Lighting, a Southern California-based outdoor lighting design/installation business. Reach him at mike@gambinolighting.com.