As a consultant and overall student of creative business, it is my job to understand and develop archetypes for the types of creative businesses I work with. I have been incredibly fortunate to have consulted with a wide variety of creative businesses from many different industries, luxury event and interior design in particular. So I sit in the most fortuitous position of knowing an awful lot about how each industry and the players in the industry work.
What I have learned and noticed is the overwhelming convergence that is occurring (and accelerating) for interior and event design.
Interior and event designers (planners too) face similar issues and, while I do not think there will ever be complete convergence, the similarities are not going away anytime soon.
Pre-digital, choice was limited, not only as to who was in the industry but what resources were available to the industry. Of course, the information age has changed all of that. Today, clients can see what every designer does in a nanosecond and what elements they would like to use for the project even faster. The access and diversity of product available to designers is truly, at best, overwhelming, and, at worst, incomprehensible – sometimes for designers and clients alike. When there are infinite choices, choosing one is fraught with complexity.
How to manage the abundance and complexity of choice is the purpose of event and interior designers as much as it is the power of design and envisioning what is to be created.
For the business end of things then, convergence places a growing premium on understanding the archetypes of each industry. In addition to convergence, it is more and more likely that a client throwing a luxury, power luxury and certainly ultra luxury wedding or other social event is also a client of a high-end interior designer that operates similarly to the event designer.
This is why the discussion last week and this week with The BBC Collective members was and will be so important. Knowing the language of each industry can only help members in their respective industries. This post highlights the work we have done and will do together in The BBC Collective on the topic. If you want to dig in deeper, please become a member and join the conversation.
Here will be what I believe are the three primary archetypes for interior designers. In a later post, I will do the same for the event industry.
A few note before I do though. My focus is on residential interior design, where the interior designer is the star of the show (as is the event designer and/or planner for a social event). No question, there is some overlap to commercial work (hotels, restaurants, country clubs, offices, etc.), but commercial work is another cat. Just like corporate work for events, a) most often commercial interior designers have an industry savvy player on the other side, and b) the interior design work is not the star of the show (no matter how beautiful the restaurant, if the food and service suck, it will fail). So we will save the commercial conversation for another day for both interior and event design.
No doubt, those not in the interior design space will learn the most here. However, for interior designers, my hope is that you will see yourself and your creative business in one of these archetypes. Of course, we are all more than one thing, but we are not bunnies. We lead with one foot and then the other will follow. You and your creative business can be more than one archetype, just not at the same time. Learning how to own your archetype and correct the disconnects that might exist can only serve you and your interior design business. So please do not dismiss the discussion with, “Well, my business is not like any of these, therefore there is nothing to learn here.” Instead, look for where your place in the reflection and see if you can make the reflection stronger.
The three primary archetypes for residential interior designers are: The Shopper, A Power Presenter, and The Project Manager. What I will lay out is what each of these archetypes represent and the business models that are often times associated with each (or at least should be). Each archetype has its own positives and negatives. No judgment as to which is better or worse, only an idea that there is alignment with how the creative business operates relative to the archetype.
The Shopper – The Shopper is an interior designer that heavily invests in going with her client to the various vendors that will help her complete her client’s space. The Shopper does not use much by way of presentation – maybe a few renderings/floor plan and a mood board or two – because the real work is hand-holding a client through the entire process and “collaborating” with the client to have the space evolve until they are done. Typically, though, The Shopper has an idea to the order of things. Take living spaces for instance, The Shopper might start with window/wall treatments, then move on to the floor and then to bigger pieces (sofa, chairs, coffee tables) and then leave lighting for last. Even though it might look random to a client, often The Shopper has a vision of how she likes to build a space and sets the timetable and order for doing so. Rinse and repeat until the entire project is finished.
The Shopper’s Model – Shopper’s typically charge an hourly fee to cover the cost of shopping and managing the procurement (and storage) of each item. Sometimes this work is covered in a flat fee (whether calculated a per square foot price or just a random number – at the end of the day it is just a number). Apart from the hourly/flat fee, The Shopper typically gets at percentage of items acquired by the client for the project. The percentage can be captured in a retail/wholesale spread meaning the client pays retail for the item and buys directly from the interior designer. The interior designer makes the difference between what she can buy the item for and retail. The spread averages around 25-30%. Or the client buys the item at the interior designer’s price (whether directly from the vendor or the designer) and pays a commission to the interior designer on top of the “wholesale” or “net” price typically at the 30-35% range. Quick example, an interior designer buys a lamp for $1,000 at her price, retail would be $1,300. Client pays either $1,300 and the interior designer makes $300 profit or the client pays $1,000 plus 30% commission or $1,300, same $300. In a perfect world for The Shopper, there is roughly a 50-50 split between fees and commissions as time investment and product acquisition are roughly equal.
The Power Presenter – Unlike The Shopper, The Power Presenter does not “collaborate” with clients at all. There are “get to know you” meetings, maybe even a few preliminary floor plans and boards, but nothing compared to the presentation. Most Power Presenters will present the entire project at once, have every item preselected (and priced) and will usually only present one (maybe two, never three) options for a client. The presentation of a Power Presenter is largely a take it or leave it exercise. If you love it, you buy it, if you do not, see ya. Some Power Presenters may break the presentation into two or three meetings depending on the size and scope of a project, but never more than three. There might be tweaks to a design but they will not last long – if the base design is not accepted by the client, the relationship ends fairly quickly.
The Power Presenter Model – Power Presenter’s do have modest fees to get a presentation ready and to invest their time in design, but, on a relative basis, not close to The Shopper. The Power Presenter is betting the farm on whether he can nail the design through presentation. Typically, a Power Presenter will charge commissions of 35-42% on the Power Presenter’s cost of items. The vast majority of Power Presenters use net commissions as opposed to the retail/wholesale spread as it is just cleaner given the importance of the sale of product to a Power Presenter. That said, a lot of Power Presenters either own their own store and/or have their own line of product that they are allowed to retail. In this case, a Power Presenter would make the wholesale/retail spread (which they might discount as they would to any other designer) AND charge a commission on top of the price. Quick example: Power Presenter has a store. He chooses a lamp for $1,000 (designer price) for one of his projects. He bought the lamp for $500. He makes $500 on the sale of the lamp, plus $350 in commissions (presume rate of 35%) for a total profit/fee of $850 on a $1,000 item. The ideal for a Power Presenter is to make roughly 75-80% of their money from the sale/acquisition of products for a project. Power Presenters are relying heavily that they will be able to blow their clients away with their vision and what their space will look like after the Power Presenter is finished.
The Project Manager – Even though The Shopper and a Power Presenter can be involved in extensive and true long-term (read: 18 months+), it is not their game. Both The Shopper and a Power Presenter like to be finished in four to six months. There might be some minor renovation with a project, but nothing like ground-up construction or extensive remodel (that would like involve architects, contractors and tons of permits). The Project Manager, on the other hand, lives for these projects. First, there is working with the architect to create flow and layout of the space. The architect may create the structure, but the interior designer creates the environment. Then there comes hard goods, fixtures and appliances. Soft goods come last and are driven by the first two. Yes, The Shopper and a Power Presenter can jump in at the end (or the middle), however The Project Manager’s brilliance is knowing the interplay of all three stages at every moment of the work. Like being able to see the wave at the shore when the pebble is dropped in the middle of the lake.
The Project Manager Model – Because projects are so extensive, the Project Manager tends to use flat fees to generate design, hourly to manage the process and percentage commission on soft goods. Since there are other players (i.e., architects and/or contractors) typically taking a piece of items other than soft goods (i.e., construction cost, cost of hard goods and fixtures/appliances), most Project Manager’s are not able receive commissions on these items. The ideal for the Project Manager, as you would (or should?) expect is to have fees/hourly represent roughly 70-75% of compensation for a project. If they were only to rely on commissions on soft goods, it just would not be enough given the length of the project. Unlike The Shopper, however, a Project Manager cannot just rely on hourly fees. The lulls of the project are significant and yet resources need to be dedicated to the project because they will be needed later. Likewise, there is not enough of a lull to allow those resources to be used elsewhere. The interplay between flat fees and hourly are critical for the Project Manager. Most often, there is a base fee with a trigger for overages based on hours over a certain amount.
Of course, there are mix and match, custom approaches. For instance, a Power Presenter may also have in the presentation items to be acquired but not yet found (i.e., one-of-a-kind antiques); in which case, the Power Presenter would then become The Shopper after presentation. However, the key point is to understand each model and its objectives relative to the archetype. Unlike events, the single biggest risk to interior designers is time. Compensation stays static (or relatively so) while time expands, sometimes exponentially. If you thought making a $100,000 was appropriate if the project was five months, then it completely sucks if the project pushes to ten months through no fault of your own and your compensation only goes up $30,000 (it needed to go up $100,000). The key for interior designers is to first figure out what they need per month based on the project and then use their model to generate the requisite revenue, not the other way around.
My prayer is that the above gives all creative professionals, not just interior and event designers, a framework to relate to. From here, we can move things forward by leaps, not steps.
