The following post appeared originally on 6 September 2009. Here we are more than a year later and the payola situation out there seems more chronic than ever. I still won't dirty my hands with it and that it goes on as often as it does sticks in my craw like few other things.
A long, long time ago, I worked for a fancy schmancy kitchen design studio. We worked the very high end of the market and with the help of a whole lot of smoke and mirrors, we had a reputation as the high class joint where somebody with money to burn could go to get a kitchen or a bath straight out of a magazine. In fact, a lot of our stuff ended up in magazines. We had a reputation for being an ethical, service-oriented firm peopled with designers who were completely committed to their clients' needs, wants and whims.
I worked there for two years and in those two years I worked on a couple of interesting projects, but most of it was just overpriced exercises in more is more. It was pretty soul-deadening. My big project though, was a home that was under construction for the entire two years that I was at the fancy schmancy studio. It was a grand home; a complete, period-perfect reproduction of a plantation house. We were contracted to design all of the cabinetry and casework in the entire house. It was a tremendous opportunity to learn how to design such things as coffered ceilings and wainscoted walls. It took a year-and-a-half to complete the designs.
Finally, when we priced out all of the cabinetry and casework the first time, the numbers came back at 1.3 million dollars. And no, million is not a typo. Eventually, we edited down the designs in the project and got it to a more palatable but still galling $400,000. A couple of hours before my boss and I were to present that revised proposal to the architects, he and I met to review the numbers one last time. When I was digging through the internal, itemized price sheets I came across an $85,000 charge that didn't have any kind of history or back up. The $85,000 had been folded into the total and since the client never saw the itemized back ups, no one would really know that it was in there. I asked what that charge was and he informed me that it was to pay for the builder's kitchen renovation.
I wanted to vomit. I am not a naif, I know that payola and kick backs go on all the time in my industry. But I'd never seen so naked a grab in my life. What ever respect I had for my boss or the contractor went out the window at that very moment. I swallowed my revulsion and made it through the meeting. I went along with it and said nothing. I was a junior designer on the project and I told myself that it wasn't my place to make waves about the graft I'd stumbled across. I left the firm a couple of weeks after that, and I never got to see the completed house. It didn't matter by then. In my mind the whole thing was tainted and I had a hard enough time looking at the plans, seeing the real thing would have done me in. Many years later, that situation still bothers me.
The payola, the graft, I stumbled across that afternoon wasn't an isolated case. I don't mean just at that studio either. "Paid referrals" are a common practice throughout the industry and I react to them now the way I did then. I'm repulsed. I think the practice is sleazy and unethical. I don't pay for referrals and I won't accept money for one. Take the money you would pay me and charge your customer less. What a concept!
I'm hooked into a network of tradespeople and suppliers I know and trust. When I refer my clients to my tile setter, or my electrician, or my lighting supplier, I want them to know that I am referring to the best person I know for the job at hand. I want them to know that they will be taken care of. Their job will be completed as promised and they will be charged a fair, though not necessarily a low, price. I want them to know too that the fair price they're paying doesn't include a kick back to me.
I was reminded of that whole situation this week when I got a phone call from an interior designer I'd never met. She had two clients who wanted to renovate a kitchen but that a kitchen plan was beyond her skill set. As we talked about the job she was proposing, she told me that her clients wanted something nice, but they were pretty price-sensitive. She then told me that she was willing to waive her usual 10% referral fee and "only" wanted me to tack $1000 onto the job total for her. Only. This was a sentence or two after she described them as price-sensitive.
I told her that I'd love to talk to her clients but that I wasn't going to give her a dime. There was a stoney silence on the other end of the line. "Really?" she asked in a near whisper. "Why is that?"
"Because it's sleazy," I said. "It's unethical and it makes projects cost more than they should. If you're any good at what you do, you should be able to make a living from the fees and commissions you earn. Payola is dirty money, it's a used car salesman move. I'm not a used car salesman. Are you?"
"Ummm," she nearly whispered, "maybe we're not a good match."
It was the smartest thing she said during the three minutes she was in my life.