The Earlier a Client Grasps Costs, The More Likely They are to Build – Here’s Why
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When clients receive their first cost guide they respond in one of four ways (hint: three of them are positive). See how early, reliable information can help you can guide clients to a smooth, constructed landing.
When your clients first receive informed costing information, they can react in a variety of ways. This often leads to unnecessarily stressful conversations and decisions that can be a real roller coaster experience.
To help you eliminate the ‘dips’ on the ride, this article explores the four typical client responses, their context, their opportunities and how to guide clients to a smooth landing.
So, let’s imagine a client who has engaged your practice to design their project. When they receive their first informed indication of construction cost, they discover the likely cost is about 20% more than anticipated
Below, we cover their responses fall into four categories then consider how to support clients getting to build stage.
Responses to higher-than-expected costs include:
- They Cancel the Project Completely
Upset, and feeling defeated, the clients decide to cancel the project as they just can’t see how they could afford their dream home.
They’ve lost the ability to think through alternatives because they’ve become heavily invested in a design that they believe is “the one and only”.
Typically, clients in this scenario are viewing a relatively mature designs and they’ve poured their heart and soul into their dream home.
Sadly, managing the heartbreak for these clients is really hard work, taking the wind out of your sails, too.
2. They Approve Progression to the Next Stage
Clients who are well prepared and/or resourced will often receive the indicative costs and understand that fulfilling their requirements will cost a little more.
Typically, these clients have undertaken their own research or have been educated earlier in the design engagement about the likely cost increases.
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3. They Re-Visit Their Finances
Surprised at the cost, the client thinks through their requirements and understands that they come at a price.
While the price exceeds their budget, they’ve not yet exhausted their finance options and they’re still thinking about the future.
Now, informed with concept and more robust cost information, they approach their financier to check how much they can borrow.
Providing indicative construction costs early in the design process ensures they don’t feel disempowered around finance.
4. They Reduce Their Scope and Expectations
Clients who grasp costs early are armed with accurate information for pragmatic decisions to drive the outcome they want.
That is, understanding costs at concept stage enables them to advise you clearly about reducing scope or breaking the project into stages with a master plan.
These clients are informed and flexible thinkers who are open to options in the early stages.
Informing clients early about budget helps them manage genuine fears about costs. The become engaged collaborators and take responsibility for budget. With early warning, they’re open to constructive solutions when there’s a gap between their desires and their budget.
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