Managing expectations during the design phase

Many years ago our company made the leap from custom home builder to full-service residential design/build firm. The transition made us a single source responsible for both custom home design and construction, and, for the first time required us to manage customer expectations in the design phase. While we continue to learn ways to improve our design/build services, we’ve identified a number of best practices that help us to manage our customers’ expectations.

Design can begin from any number of starting points, but the process of translating a client’s vision into a set of working construction documents should be a clearly defined sequence of activities. A flow chart of this process will help clients understand the steps for getting from conceptual plan to approval of construction documents.

Having a written agreement that spells out the scope and cost of design services is in the best interest of all parties. Our practice is to use separate agreements for preliminary design work and for detailed construction documents. Each agreement clearly spells out what plans will be produced, the cost and any items that are to be provided by the client (e.g., surveys, soil tests).

Our agreements and our plans include clear language regarding copyrights. We retain ownership of the copyright for any custom plans we produce. For designs derived from stock plans, we require the client to prove that a license to build based on the design was purchased from the copyright owner. Plans we produce are part of a design/build package and we do not permit them to be bid.

Budget and benchmark
The use of a client’s budget as design input is a key point of difference between design/build and the traditional design-bid-redesign-rebid-build process. Testing the reality of a client’s budget early on minimizes the potential for creating plans that will never be built or that will require substantial revision prior to construction. We work to design within a budget range that includes a target and a not-to-exceed figure.

It is important to determine at the outset what the budget includes. For example, a client may wish to include the cost of certain home decorating items such as window treatments, landscaping, home automation or electronic equipment as part of the overall cost for financing purposes. A reasonable line item estimate would need to be included for each such cost.

Once the budget is established, and before beginning design, it is important to calibrate the client’s expectation about what their budget will buy. Touring homes under construction that are in the client’s budget range is an efficient way to “calibrate” them. If we don’t have a home under construction that is similar to the plan a client is considering, we develop a budget estimate (+/-10 percent) using cost data for recently completed homes. Then we update the costs to reflect current construction costs as well as to account for any differences between the client’s plan and the reference plan(s).

Design may be on the front end of a design/build business, but the quality and accuracy of design work can have a profound affect both on the client’s experience during construction and the overall construction cost. The design professionals you employ should understand the sticks and bricks of construction to minimize the potential for problems in the field. In addition to good technical skills, they should be able to work with clients and your staff. Match the skills of the designer to the work you perform. If you are designing and building custom homes, consider hiring a registered architect to lead the design effort.

Concepts and estimates
There’s no substitute for a construction cost estimate that is based on the actual design of a home including site-specific requirements. However, cost estimating need not be deferred until a full set of detailed construction plans is available. We produce a preliminary concept plan that includes floor plans, a roof plan, elevations and a preliminary site development plan all with sufficient detail to enable an accurate material takeoff and preliminary estimate of construction cost. We go overboard with the level of detail in our preliminary estimates in order to predict construction cost within +/- 3 percent and so the estimate will be a useful tool for value engineering.

Clients should expect you to have a backlog of design work to be completed before beginning work on their plans. It’s important to let them know — in writing — when work on their plans will begin and when they can expect a set of plans for their review. The same is true for revisions requested by the client. Many of the communities we build in have an architectural review process with its own backlog of plans. We keep our clients updated as various reviews are completed along with a list of any issues raised during the review. We make use of our Internet website — a tool we also use for communication during construction — listing key milestones in a client-specific journal. Journal entries begin with the date the design agreement is signed and continue through final approval of the construction documents.

For open-ended design agreements performed on an hourly basis, progress invoices are an important way to keep clients informed about their investment in the design of their home. While we were producing detailed construction documents for one client’s home, after agreeing on the preliminary plan and preliminary costing, they requested a number of design changes. While no single change was particularly significant, taken together, the changes increased the construction cost by more than 10 percent over the preliminary estimate.

The client hadn’t been keeping track of the changes, and they were surprised that they had added so much to the design effort and the construction cost. The upset client asked us why we hadn’t reined them more aggressively when they requested changes. We went back to the drawing board to eliminate most of the changes. The lesson: It’s important to keep track of each design change and its estimated cost to prevent surprising the client after final costing of the detailed plans. Surprising a client at any point in the process risks additional plan revisions or possible loss of the job.

The value of an accurate, detailed set of construction plans and specifications can’t be overemphasized. The plans and specs help manage the client’s expectation regarding how their home will be constructed. A good set will align the expectations of the client and the design/builder, minimize the potential for mistakes in the field, and hopefully allow the company to earn a fair profit at the end of the design/build job. Soliciting regular feedback from the field is helpful for improving the clarity and accuracy of plans produced on each subsequent job.

Despite our best efforts, our plans aren’t perfect. If there is an error or omission in our plans, our first priority is to make it right for our client; then, afterward, to review what happened and implement whatever changes we need to make to prevent a recurrence on future jobs. Anybody can make a mistake. Ensuring that your company doesn’t make the same mistake a second time isn’t always easy, but it is always good for business. Incidentally, plans you produce are intellectual property and should be protected from theft to the full extent of the law by registering them with the U.S. Copyright Office.

Managing your clients’ expectations during the design phase of a design/build job is a key step toward ensuring their overall satisfaction. Developing design best practices and continually improving them will enhance both your company’s reputation and its bottom line. ?