How To Write a Killer Architecture Proposal (and Earn 300% More Revenue)

Is it really possible to earn 300% more revenue with this simple strategy?

If you've read my articles for any amount of time you know that I'm always on the lookout for business lessons that apply to what we do as architects.

Recently I took a trip with the family to the petrified forest in Napa Valley, CA.

In the gift shop they sell gemstones and fossils.

Most are priced in the $5.00 – $20.00 range.

Then I saw this:

2100 Dollar Petrified Rock

Here's a close-up:

Petrified Rock $2100

Whaaaat?!?

Yes, this is a polished rock for sale for $2,100 US ($2,959 for my Australian friends).

The more I looked at it, the more I thought it would be neat to have slice of a petrified tree hanging out in my living room.

Is this just the crazy idea of a deranged gift shop owner, or is there a deeper business lesson at work here?

Perry Marshall, in his book 80/20 Sales and Marketing, talks about something called the 80/20 demand curve.

What this says, basically, is that for every 100 people who enter the gift shop, one person will be willing to pay for something very expensive, and the vast majority will pay for something much cheaper.

Intuitively, this just makes sense.

There are fewer people of wealth than people of average income.

Although 1000 people might walk past the $2100 slab of rock in the gift shop, all it takes is 1 person to purchase it.

And with that one purchase, the shop has hugely increased the revenue for that day, and served its customers better by giving them what they want.

This is a good example of offering products at different price points to fit market demand.

Another Example

When I walk into my gym, there is a big sign that offers a V.I.P. upgrade for an extra $15.00 per month.

They also offer multiple plans – you can access one gym for $60 per month, or get access to other gyms with more amenities (like racquetball courts) for $80 per month.

Again, this gives me as a patron more options – and it also increases the gym's average customer value (the amount of money spent by an average customer over the life of the customer's patronage).

It's a perfect win-win situation.

I get more options, my gym gets more money.

One last example from Microsoft:

Microsoft Pricing Table

Here Microsoft is offering 3 different price levels for their “Office 365” service.

At the lowest level you have “Business Essentials” – for the price sensitive freelancer with minimal software needs.

On the upper end is the “Business Premium” level – for an extra $7.50 per month.

Now on the surface an extra $7.50 doesn't seem like much, but compared to the “Essentials” version they've increased their revenue by a whopping 250%!

Why Multiple Price Points

Here are two great reasons businesses offer multiple price points:

1. Clients and customers get more options.

Instead of forcing everyone into only one way of doing business with you (one price point), you give your clients and customers more options. This serves them better because they are more likely to find a price point in line with their budget and needs.

2. The business increases revenue.

By giving your clients options, it's likely you'll capture more clients because they'll find a price point to their liking. And for those premium clients who always want the best, you'll be able to offer them an upgraded service (and value) at a higher price point.

Multiple Fee Levels in Your Architecture Firm Proposal

By offering your clients multiple fee packages, you can increase your revenue by 20% or more, if done properly.

How is that? Well your top level, premium package should be priced like a premium service and you should charge for the extra value you provide.

If just a few clients take your premium option, you've added revenue straight to your bottom line.

Now, there's an art and a science to offering different fee packages, but that is beyond the scope of this article.

Guidelines for Offering Multiple Fee Packages

Here are a few rules to follow when you apply this strategy to the architecture industry:

– Break apart your services to create different service levels.

Your basic service package might include permit drawings only. An upgraded service package might include multiple renderings, a video walk-through, interior design services or sales and marketing materials that you produce for your clients.

– Above all else, keep it simple.

Make sure each element of each service level is described in a way that your client will understand (focus on benefits, not features – see below)

– Use a visual price matrix.

This will help make it clear what each fee package includes. See the Microsoft example above for what a visual price matrix should look like.

– Offer a turn-key, all-inclusive package (where the client has to do as little as possible).

This is your high-end package and it will attract people who value time more than money.

– Give your service levels names.

Keep it simple, don't go overboard inventing cute names. Bronze, Silver, Gold or Basic, Premium and Executive will suffice.

– Clearly explain the value of each service package.

Describe the benefits a client will get from each service level, not just the features.

For example, a feature is a 3d-rendering plotted at 600 dpi. The client may wonder, “So what's it to me?” The benefit answers this question: it makes you happier with your finished space because you saw it beforehand!

For more information on using compelling benefits in your next architecture proposal, read this article from the Architect Marketing Institute.

When done properly providing multiple fee packages can mean the difference between winning and losing a project.

This is because the client won't be forced into choosing only one option. If they feel your fees are higher than they like they can go with a minimal package.

Now, if you're already doing this, drop me a note so I can see what you are up to!

And if you decide to implement this, let me see what you work up!

What do you think about this strategy? Leave your thoughts in the comments below.

Onward and upward!

Additional Resources:

For more information on crafting killer architecture proposals, I highly recommend the live Architecture Fee Proposal workshop put on by my friends Ian Motley and Alexandra Howieson of Blue Turtle Consulting. They go over the strategy covered in this article and more.

For more information on creating a value-based proposal, get Million Dollar Consulting Proposals: How To Write A Proposal That's Accepted Every Time by Alan Weiss.

Enoch Sears
 

Enoch Sears AIA is co-founder of the Design Firm Accelerator, a program that helps architects grow their income and impact through smart marketing. He’s famous for helping architects build a business that gives them more freedom and profit. He’s the founder of the Architect Business Institute and co-founder of the Architect Marketing Institute. He also hosts the #1 rated interview podcast for architects, the Business of Architecture Show where prominent guests like M. Arthur Gensler, Jr. and Thom Mayne share tips and strategies for success in architecture.

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