In the last month or so, I’ve staged a couple of high end homes. The last one that I honestly just finished today, I charged about $7500 for and a lot of people are charging high prices and a lot of people are still sort of mystified about how do I actually raise my prices.
But the one that I just did, it’s a great house. It’s about 3500 square feet. We only did the great room, which is like a living room, the kitchen, the dining room, the master bedroom, master bath and an office. So the rest of the house we didn’t do, just so you know. The fee is about $7500 and a lot of times, people will say to me, “Well Karen, how do you charge so much for your services?”
Well, let me tell you about the three different ways you can actually charge more for your home staging services. Now, the one thing I will tell you is you might start out by doing one and then take another leap and a third leap. So even if you don’t do these all at once, and you do them sequentially, you will continue to make more money. But you have to have the confidence to stand behind lifting up your prices and you have to be able to back up your service with extraordinary value.
So first of all, raise your prices. This is what normally happens. I’m going to tell you what to do and what not to do, right? So number one, raise your prices, right? How many times do we have to say it?
But they came to me initially and they were like, “Well, I’m charging $40 an hour,” or something like that. First of all, it was just like horrible to me because number one, you always want to have some kind of formula or a flat rate versus an hourly rate because you will make a lot more.
Also when you’re hourly, people want to rush you and they look at you as an hourly worker. So you don’t want to do that. You definitely want to be able to flat rate your prices or have a formula for your prices, like a square footage formula. But if you are ready to raise your prices, it’s hard to just randomly raise your prices. You can just go, “Well, I’m charging $100. I’m going to charge $1000. So as of December 1st, we’re going to charge $1000.”
Boom! Well, all of a sudden you will lose every client you have, right? That’s what people are afraid of. They’re afraid they’re going to lose – how many of you are afraid? If you’re afraid of losing customers because you raised your prices, and I think that’s always a huge, huge thing, right? So that’s the number one question people say. Well, what will happen? Well number one, you may lose customers. OK? So I’m just letting you know that upfront.
Number two, chances are if you position this effectively and correctly, you probably won’t and you will make more money. But it can’t be random. So, that’s how not to do it. You can’t just randomly raise your price. If you decide to raise your prices, you have to have a reason. So sometimes the reason has a lot of credibility and sometimes they don’t. Sometimes you will raise your prices and this happens a lot in the last few years where people said, “Well, gas has gotten so expensive. So I need to raise my price because of the price of gas.”
Well, your customer doesn’t care about that. They still have to pay out for gas too. So that’s kind of a reason that I don’t really think holds water. Sometimes people will say, “Well, I’m going to have to charge a distance charge on that.” Again, I don’t think that’s a great reason for raising your prices. I think that that’s part of just doing business. You should charge accordingly if it’s going to be a good distance away. One of the things that I realized with my clients and why I’m able to charge more is they don’t like to be nickel and dimed. People don’t want to know, “OK, well, we’ve got this fee and that fee and this fee and that fee.” They just like, “What is it?”
I think that’s why I’ve been able to charge more is because then I say, “That includes your drop-off, your pick-up, your move-in, your move-out. We carry insurance on this. It also includes a monthly touch-up if it needs it. It includes this and this and this.”
I kind of go down the list and they go, “Holy cow!” That’s way better than what anybody else is doing. So a lot of times, if we give a reason, and then we break out the services, now we can justify raising our prices.
So if we have a real reason why we’re raising our prices, then we can break out the services and say, “Here’s everything that’s going to be included.”
So you want to have a whole list of everything that’s included, everything from drop-off, pick-up, a monthly reset fee, travel feel, shopping, et cetera or you can work it in reverse.
Now, the other part under number one in terms of raising your prices is obviously increasing your monthly fees.
So again, you can just randomly do that or you can have a reason for it. So you could say, “We’re going to raise our monthly fees as of December 1st,” or you can say, “We’re going to raise our monthly fees and here’s why.” Then give them a very solid reason as to why you’re going to raise your monthly fees. Now, here’s another thing you can do with your fees. There are a lot of home stagers who will include the first month of monthly rental fees in their staging price, which is what I always recommend. But you don’t have to.
So if you want to raise your fees but you’re having a hard time increasing the staging price, just start having a monthly holding fee from day one as well. So that’s another way. So that’s all under step number one in terms of raising your prices.
So number two, number two is all about adding value. So the first thing, we talked about raising your prices. You can raise them randomly or have a reason, right? We talked about the breakout services, whether you want to include those upfront or charge for all different kinds of things as well as your monthly fees.
Now, what I would do is, I would add value and that’s what I normally do with all of my clients. So I always talk about everything my service includes and not only do I say, “Here’s what my fee is and here’s all the things that it includes,” so I give them a pretty lengthy list of everything that it includes. But in addition to that, I always offer a small – a modified I should say color analysis and curb appeal consultation. So then you can do them as independent services or very simply you can add them as a value. Now when you add something as a value, it gives you and your services more value.
So now you can say, “Well, I know Sally charges $2000. I charge $2500, but here’s why,” or “We’re going to change our prices. Now you can still get everything you’ve always gotten before at the same price or if you would like to step up and sell your house much faster, I will also include the other services.”
Now instead of being $2000, it’s $2500 or $2250. It doesn’t have to be a huge increase because if you think about it, you’re just charging an extra $200 and you do five staging’s that month, that’s an extra $1000 and you’re already there anyway and making it more valuable, because most home stagers aren’t willing to do a value-added service or they don’t have the knowledge or the know-how to do it.
Now, the other thing that I think you can offer people that adds a lot of value is letting them be a preferred member. Now this has been very successful for a lot of our home stagers and our home stager trainers. Kristy Morrison does a beautiful job with this, where you really have a preferred membership, I should say. It’s just like being an APSD member when you get preferential treatment for being an APSD member.
A lot of people are welcome but you have special benefits, special perks for being a member. So in terms of preferred membership, what I would do is, I would show the agent, the investor, and the seller your preferred membership pricing versus everyday pricing. So your preferred membership pricing might be $1000 for up to 2000 square feet and five rooms and whatever, however you want to lay it out.
So they really feel like they’re getting something but in order to make that work, they have to commit to using you exclusively for the next year. They have to fill out a form.
They have to give you a credit card so they know they’re auto charged every single time you work with them or they work with you, so to speak.
They have to commit to you and you have to commit to them. They may say to you, “Well, I don’t want you to stage these other people,” and they might assign those people.
Then you decide. Does that work for me or not? Now generally speaking, they won’t ask you to do that. But you should ask them to commit to exclusivity and then give them an exclusive price.
So now all of a sudden, you’re adding a lot of value because you give more than other stagers. You have more confidence. You have more know-how because you can include these other additional services and you’re able to give a better pricing structure because you get more business.
Now that doesn’t mean that you’re the Walmart of home staging or that you have to give away your services. It might mean you’re still more expensive than everybody else but with members, you give a very, very good discount for every single staging.
The best part about this is if you had 10 clients and each one of them has five staging’s over a period of a year, you have 50 staging’s that year or even better, they had 10 staging’s. You would have 100 staging’s that year. That’s just like managing 10 preferred clients.
Now a few of you are going to say, “Credit cards? I don’t take credit cards.” Well, if you don’t ladies and gentlemen, you need to. So go to PayPal and set up an account. That’s what professionals do. That’s what you need to do. You need to be able to accept credit cards.
You may always get checks. That’s fine. It doesn’t change the fact that you need to be able to accept credit cards especially with your preferred members because part of them being preferred, a benefit that they get, is that they don’t have to worry about the payments.
You just do an auto charge and you automatically send them a receipt. They learn to expect that so they don’t have to try to dig out a check or a credit card every time. They don’t have to worry about, “Did I pay you or not pay you?” et cetera. That’s part of a service that you offer or you can do it in another way or you can add this to it that they get a punch card just like when we go to the coffee shop. We get a punch card and with every staging, every seventh staging, they get one free or every 10th staging, they get one free.
Think about you. How many things are you a part of? How many things do you like to be a part of? Because you like to join things. That’s who we are. We’re social animals. So that’s what you have to think about. People like the preferred membership.
Number three, create celebrity. So, this is something that about a year ago now I guess I decided to do because, well, I had a lot of good credentials. I really wanted to build this. I wanted to build my celebrity.
So, two things happened for me. Number one, RE/MAX Europe got a hold of me and they said, “We would like you to create our Luxury Marketing Training System for all the real estate agents in all of Europe in 33 countries that RE/MAX is in.”
So that was a huge kudos for me. It was a point of celebrity for me because now in the real estate agent world, I can say, “You know, by the way, I’m the creator of the Luxury Marketing Training System in all of Europe.”
Now the other thing that I did was I wrote a book. I wrote Love Sells and then I marketed it like crazy and it ended up being an Amazon number one best seller.
I know what a lot of people are thinking right now. Yeah, Karen, I can never do all those things. Well, of course you can. Why do you think I’m different than you? I don’t normally just know how to write a book. I don’t normally know how to just create an entire training system for 33 countries. I dug my heels in and I did my research. I worked hard. I did everything I needed to do.
So you can do the same but it doesn’t have to be that intense. It could be pretty mild.
So those are the best few ways on how you can actually make more money on your home staging services. But you know what? You got to get out and do it. You have to add something behind you. You have to add something behind you that allows you to continue to raise your prices. Of course the more you go, the more well-known you will become, the better your results get. All those things lend themselves towards you increasing your price.
This article is taken from a transcript of the ASPD Monthly Pro Call, Nov. 2014
Karen Schaefer Founder, APSD The Association of Property Scene Designers
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