How to Handle Client Sticker Shock
To homeowners who are new to design or remodeling projects, or who haven’t done one in a while, prices for everything involved — raw materials, services, furnishings, decor and more — can come as a surprise. Here we share ways to mitigate the sticker shock and motivate prospective clients to move forward with their projects, based on ideas from interior design business consultant Chelsea Coryell of Design for a Living and other industry pros.
Pre-Qualify by Budget and Offer Financing
First, determine whether a client might be a good candidate budget-wise by screening not just for desired spend but for income level and even assets before you even meet. That way you’ll help avoid spending valuable time on clients whose dream project is bigger than their bank account (or credit line) will allow. You also can:
- Make sure the target budget range is correct for any lead generation help that can target specific projects.
- Include the typical budget range of your projects on your website and any professional profiles.
Even if the homeowner’s budget and income or assets match up with what you’re looking for, do a quick follow-up screening over the phone to determine if the person’s expectations are realistic and if they’re actually ready to invest in the project. If expectations aren’t realistic for the proposed budget, or if homeowners want to commit more funds than they have available, offering financing is a great way to both help the client and build trust. That’s why Houzz Pro has partnered with GreenSky© to help you offer home improvement loans to clients.
Good to know: While the share of homeowners using credit cards for renovation projects jumped in 2023 for both higher-budget projects (increasing by 10%) and lower-budget projects (up by 7%), cash remains the most popular funding option (83%) for projects in all spend ranges. Interestingly, for those higher-budget projects ($50,000 to $200,000), homeowners use secured home loans and cash from home sales nearly as frequently as credit cards (23%, 21% and 32%, respectively). This data comes courtesy of the 2024 U.S. Houzz & Home Study.
Manage Expectations
Be 100% transparent about costs from day one to avoid any surprises when it’s time to sign the contract. Share detailed proposals showing all anticipated costs of materials, products and services (make things easier on yourself by using software that offers a proposal template with pre-populated line items). Be frank about the cost of change orders and the general unpredictability of costs these days, and include clauses for those in your contract.
“What I have learned is that people live and die by their expectations,” says interior designer Ginger Curtis of Urbanology Designs in the Dallas-Fort Worth area. “Our job is not just to create amazing spaces that are functional and beautiful; it’s also to manage what our clients expect.”
Good to know: 17% of renovating homeowners report spending more than $100,000 on their home remodels in 2023, according to 2024 U.S. Houzz and Home Study. And clients in the 90th percentile of spend (meaning the highest 10%) pay $150,000 or more, a major jump from $100,000 in 2021, according to the same study.
Houzz provides plenty of other data you can share to help manage expectations too. For lower-budget projects (less than $50,000), you might share info on median spend for various room and project types across the United States, as provided in the 2024 U.S. Houzz & Home study. For instance, the median spend on major kitchen remodels (meaning at least all the cabinets and appliances are replaced) was $55,000 as of mid-2023, an increase of 22% year over year, according to the study.
Explain Your Value
Sharing the benefits of working not just with a pro but with you in particular can help put costs in perspective. What unique value do you bring to the table? Katie Gutierrez, a business coach for designers, advises clients to determine their individual selling point. “What is that gift you’re bringing?” she says. For instance, one of her clients is becoming an expert in forever homes. Because of that niche expertise, she can charge more for her work.
Second, what value do you offer in terms of making the project process easier and even fun for clients? Being able to provide things like 3D floor plans and online mood boards can be a big selling point, as can having established relationships with trusted vendors, speciality service providers and artisans.
And finally, give the client some perspective about value. Luxury remodeler Jason Bliss of Benchmark Home Construction in the San Francisco Bay Area says to clients, “Tell me how much you’re willing to pay for your Mercedes to be worked on. You’re probably paying $400 to $500 an hour for that, and yet the most expensive asset in your life, you want to underpay for?” He underscores the point by adding, “You’ve got a $3 million home and you want to pay somebody $25 an hour to come in and work on it? No, of course not.”
Explain Product Value
The internet can turn anyone into a savvy comparison shopper, but many consumers focus on price rather than quality or other factors — and they don’t necessarily consider that products with a higher price tag can be less costly in the long run. For instance, cheaper flooring in a house with pets and children might need to be replaced much sooner than a more expensive, hard-wearing option. Or low-priced decking might require a lot more maintenance. So you can share details not just about a product’s price but about quality, longevity and required maintenance to give the homeowner a fuller picture of what they’d be getting for the price.
Stand Your Ground
It might be tempting to give in and lower your prices to win a project. If you’re brand new to the business, lower prices might be a fair tradeoff for project photos, reviews and word of mouth. (Just be sure to create accurate takeoffs and estimates so you don’t lose money.) But keep in mind that lowering your prices sets a precedent that can be hard to steer away from, because you’ll be creating a niche in that budget range. And if you’re already fairly established working within a certain budget range, lowering the range can feel like a step down. It can also cause you to compromise on quality.
If a homeowner is pushing hard for lower prices before you’ve signed a contract, it might be a sign that the project isn’t a good fit for you. If a current client starts aggressively urging cost-cutting, make sure to maintain your professional demeanor even in the face of frustration.
“Keep your professionalism in place even when clients make unreasonable demands or try to undercut you,” advises interior designer Melissa Fields of Shades of Gray Design Studio in San Antonio, Texas. “We as designers often have to put our own feelings into our back pocket and just maintain calmness.… And just explain to the client, remind them of what they agreed to: ‘Hey, I am giving you this space that you came to me for. That’s what you hired me for.’”
Tip: Learn great pricing strategies from veteran design-build pro Andy Wells in episode 2 of The Pro Perspective podcast from Houzz Pro, called “Pricing for Profit.”
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