What To Win When Other Firms Undercut Your Fees

Published: June 20, 2019, 11:51 p.m.

Yesterday I spoke with the partners of a design-focused architecture firm that does commercial, hospitality and residential projects. They reached out to me because their fees are very competitive, but they sometimes get undercut by 40% or more. Many times the clients come back to them with their tail between their legs after these projects go off track \u2013 but not always. This is frustrating for these firm owners who feel like they're doing everything right, but still struggling. Let's face it \u2013 both you and I know if a client pays 40% less they aren't getting the same level of professional service. It's like getting heart surgery \u2013 would you go to the cheapest surgeon? \u201cExcuse me doctor, that seems a bit on the high side. Is there any way you can bring that fee down? There's a doctor operating behind a local bar, and he charges a fraction of that.\u201d \u201cPerhaps there are less expensive sutures? Is all of this equipment really necessary? My brother-in-law says this should cost much less.\u201d \u201cWhat if we do this at my house instead of the operating room? My son can hold the flashlight while you work.\u201d \u201cThat would save a lot of money, right?\u201d This seems ridiculous when we think about it in a medical context, yet this is the trap that some clients get caught in \u2013 they focus on the short term impact of the design fees instead of considering the long-term value of investing in design up-front. So instead they play the game of chasing change orders and the project ends up costing more than it would have if the client had simply invested in doing the project correctly the first time. If you've ever been frustrated by other firms undercutting your fees, then watch the video up above and let me know what you think. If you want help getting out of the fee race to the bottom, you may be a fit for my DREAM Practice Accelerator program.\xa0Click here\xa0to watch a 60-minute training on how to create your DREAM Practice or\xa0click here\xa0to see program reviews.