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09/02/2014

Dollars + Sense

What’s best practice when it comes to a client who wants a direct roadmap to their ROI? To find out, we spoke with a few industry experts who explained how to show them the money.

By AnnMarie Martin

 
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    Solidcore Fitness Studio3877 developed the design for this line of Megaformer fitness studios boasting up to an 80 percent retention rate. The interior helps to sell class spaces by offering a welcoming, unassuming environment, utilizing raw, imperfect materials that make members OK with their own imperfections. Woods with ruts are juxtaposed against a delicate wallcovering pattern. Guests can write messages on the floors with sharpie markers and retail elements are hung on off-the-shelf piping from Home Depot. View larger

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    Solidcore Fitness Studio3877 developed the design for this line of Megaformer fitness studios boasting up to an 80 percent retention rate. The interior helps to sell class spaces by offering a welcoming, unassuming environment, utilizing raw, imperfect materials that make members OK with their own imperfections. Woods with ruts are juxtaposed against a delicate wallcovering pattern. Guests can write messages on the floors with sharpie markers and retail elements are hung on off-the-shelf piping from Home Depot. View larger

  • /Portals/3/images/magazine/2014/0914/Article_Images/I_0914_Web_WorldLg_4.jpg

    Solidcore Fitness Studio3877 developed the design for this line of Megaformer fitness studios boasting up to an 80 percent retention rate. The interior helps to sell class spaces by offering a welcoming, unassuming environment, utilizing raw, imperfect materials that make members OK with their own imperfections. Woods with ruts are juxtaposed against a delicate wallcovering pattern. Guests can write messages on the floors with sharpie markers and retail elements are hung on off-the-shelf piping from Home Depot. View larger

  • /Portals/3/images/magazine/2014/0914/Article_Images/I_0914_Web_WorldLg_5.jpg

    Solidcore Fitness Studio3877 developed the design for this line of Megaformer fitness studios boasting up to an 80 percent retention rate. The interior helps to sell class spaces by offering a welcoming, unassuming environment, utilizing raw, imperfect materials that make members OK with their own imperfections. Woods with ruts are juxtaposed against a delicate wallcovering pattern. Guests can write messages on the floors with sharpie markers and retail elements are hung on off-the-shelf piping from Home Depot. View larger

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    Ron Swidler View larger

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    The Kinzie is one of only a few hotels in Chicago that has noise-attenuated rooms, making it a preferred stop by business and international travelers who put a premium on quiet rooms. View larger

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    When guests check in, they receive a small silver token they can exchange for a free drink at the Double Cross Lounge. Since the Double Cross Lounge is not located in a high-traffic area of the hotel, the coin serves as a way to drive guests to the bar for drinks and socializing. View larger

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    Founding member and lead designer for Álvarez-Díaz and Villalón, Cristina Villalón specializes in providing visual merchandising services to clients as well. View larger

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    The pendants above the cashier stations at Gatsby, constructed of discarded iron, are one of many conversation pieces that reinforce the brand’s focus on a sustainable lifestyle and entice customers to get the word out about their experience via social media. Ricardo Álvarez-Díaz, and Cristina Villalón. View larger

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    Ricardo Álvarez-Díaz, and Cristina Villalón View larger

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    Even the platform displays within the store illustrate the “Gatsby girl” target consumer throughout the various stages of her day. View larger

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    Prepared foods within most grocery store projects significantly drive ROI, as does proper layout and customer flow. Studio3877 made sure the finishes used—such as reclaimed barn wood from a client’s vendor—within this project embodied the market’s motto: “good food from close by.” View larger

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    David Shove-Brown, founder of Studio3877. View larger

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    David Tracz, founder of Studio3877. View larger

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    View larger

Every client wants great interior design. And every commercial client wants to know how their investment is going to translate into sales for their business.

“If somebody comes to me and says, ‘I don’t give a damn about the cost or what it’s going to do,’ I can just retire from there,” says David Shove-Brown, AIA, NCARB, and partner at Washington D.C.-based Studio3877. David Tracz, AIA, LEED AP BDC (also a partner at Studio 3877), explains that clients must fully understand the value of good design in order for them to understand where their return on investment is going to come from, because it’s not always so cut and dry.

“That’s the thing about design,” Tracz says. “It never directly points to return on investment. It gets there, because people come because it looks nice and it feels nice, but there’s never a point where you can draw this quick, convenient line from one thing to another that says ‘Oh, because they picked these lights everyone walks in and says, “This is the reason I’m here.”

As a result, there has to be a strong base of trust between client and designer. “If the client doesn’t trust the process and is only concerned with how much money they’re going to make, it’s a problem,” says Ricardo Álvarez-Díaz, AIA, CAAPPR, NCARB, founder and principal of Álvarez-Díaz & Villalón, architectural, design, planning, and consulting firm headquartered in San Juan, Puerto Rico. “When you have fear involved and there’s a level of distrust, the work is going to suffer.”

“My background for a long time was with auto manufacturers and traveled all around the country talking to dealers about how design can help make them money. That means using design to increase sales or customer comfort or develop a relationship where customers will want to come back,” explains Shove-Brown, because the true profit comes in repeat customers and word of mouth where they recommend friends.

The same formula applied when Studio 3877 developed the design for solidcore, a line of fitness studios in D.C. expanding to locations in Virginia and Minnesota and boasting up to an 80 percent retention rate.

“There’s the bottom line: how many Megaformer machines can we get in the space, and X number of machines times X number of classes for a given week times number of weeks equals income for the month. It’s pretty straightforward. So then it’s a question of, what can the interior do to help sell those spaces? Then how can you turn around and say ‘OK, we’re going to put in this material versus that material and what is it going to do?’”

Putting in white marble walls could intimidate members, or—worse yet—cause resentment, as they’ll translate expensive materials into the cost of a class. Conversely, putting up a reclaimed wood palette could make them feel money is going into the machines, rather than the walls.

“The subconscious of what we’re trying to do is put up materials that for the most part were pretty raw. You look at a lot of gyms now and the way fitness centers are designed is they’re these Taj Mahals of mirrors and glass. So you walk in and you need to feel like you’re this pillar of health, and if you’re not you’re not really welcomed. We want to say we’re OK with a piece of wood that has a rut or somebody wrote on it that it was a shipment going to Albuquerque. It could have a knot in it or it could be imperfect and that’s OK,” Shove-Brown says.

Flooring was half terrazzo and half poured concrete, and Studio3877 found beauty in that imperfection. “So that was the philosophy in selecting the materials and a design for solidcore. We came at it from a psychological point of view: make the materials say ‘you’re welcome to come in here, and if you’re not perfect, that’s OK.’”

The partners actually took classes and observed them to see how members utilized and interacted with the space, helping them to evolve the brand with each new location.

The importance of research and education is vital when it comes to helping clients decide where their investment dollars will be best spent (and recouped in the future.) Ron Swidler, principal with The Gettys Group in Chicago, says the firm doesn’t offer up ROI guarantees but helps with the prioritization.


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