Your Ticket Out of the Recession
As the threat of global economic meltdown subsides into that of recession, the outlook for design practitioners is bleaker than it has been for many years.
But although a shrinking client market may be squeezing you, there is an escape route to better times: small- to medium-sized enterprises (SMEs). Rarely have SMEs so urgently required the services of design professionals. With consumers padlocking their purses, SMEs desperately need to innovate and differentiate.
The challenges are to first convince SMEs to hire you, and then to deliver what they need.
You Are an Expert — Or You Can Become One
“The biggest mistake [designers] make is being another one of tens of thousands of designers,” says David C. Baker, who has advised countless creative companies through his management consultancy firm ReCourses. “They don’t approach their work as a designer who understands what the client company does,” adds Baker. “Because of that, clients view designers as interchangeable, and this moves design from what it should be — a professional service — to merely a service.”
In agreement is Shel Perkins, president of Shel Perkins & Associates, a consultancy that works with design firms to improve performance and navigate change.
“The most common problems I see are a failure to effectively position ourselves as experts in specific client categories, and a failure to communicate the benefits of a comprehensive, strategic approach,” says Perkins, who also authored Talent Is Not Enough: Business Secrets for Designers.
This inability to connect with SMEs is costing both SMEs and designers lost opportunities and lower revenues. The United States federal government defines a small business as any enterprise with fewer than 500 employees, and it’s estimated that such businesses account for more than 50 percent of the country’s overall economic activity. U.S. designers can’t afford to leave that much potential business on the table.
In the United Kingdom, the SME-design problem is so acute that the Government has stepped in with Designing Demand, a program run by the Design Council (DC), the Government-funded national strategic body for design in the U.K.
This program helps U.K. businesses become more profitable by helping them understand the strategic, effective use of design. The program also helps designers understand businesses’ needs and issues.
One U.K. designer has taken the problem into her own hands. Amanda Tatham runs Tatham Design, an award-winning U.K. consultancy. Since January 2006 Tatham has been organizing breakfasts at which business experts address design practitioners. Working successfully with SMEs is a recurring theme.
A recent speaker was Sir George Cox, author of the government-backed Cox Report, a study published in 2006 that suggested ways the creative services can boost the U.K. economy. “Sir George talked about designers speaking the language of business better,” says Tatham.
Another speaker was Frances Hinton, a business advisor who researched SME perceptions of designers for the Cox Report. “She told us that designers need to start thinking in terms of generating sales for SMEs, increasing cash flow, attracting talent, and adding to their bottom line,” says Tatham. “She also stressed the importance of learning to ask the right questions — finding out what they need, not what they want.”
Be a Specialist
Being able to ask the right questions of SMEs assumes specialist knowledge on the part of designers, something many lack, says Shel Perkins.
“It’s important for each design firm to recognize it can’t be everything to everybody,” Perkins says. “Stop chasing anything and everything that crosses your path and stop showing a generic portfolio that contains an assortment of pretty images taken out of context.
“Work on developing more effective positioning and differentiation. Among other things, this involves researching target industries and understanding their needs, and then developing compelling case studies that reflect the challenges they face.”
He adds: “Analyze current market trends and focus on the client categories that have the most potential for you. Your goal is to be the leading provider of premium services that are in strong demand within client industries that are expanding.
“It’s also important to get out of the design ghetto and become visible in the business community. Attend industry events that are important to your clients and join their industry associations.”
Understand the Differences
Understanding how SMEs differ from large, often multinational, organizations that are accustomed to drawing upon design expertise is also critical, say both Baker and Perkins.
“Any significant expenditure [on design] seems like a luxury they can’t afford,” points out Baker. “The other difference is that SMEs are typically trying to build their brand, and so they think first of more-direct methods, such as advertising or direct marketing. They are comfortable with those expenditures because the results are more trackable.
“Large expenditures on design are viewed [by SMEs] as nice to be able to do, but a bit softer on results. The larger companies are, of course, preserving market share and honoring the existing brand.”
Perkins says, “In general, small businesses have smaller budgets, shorter time horizons, and a more limited understanding of marketing principles. Many small-business owners are stuck in reactive mode and are interested only in buying a specific deliverable rather than broader strategic advice.”
Tatham agrees that offering SMEs strategic advice is one key to success, but she goes further, suggesting that we may also need to reassess the way we do business.
“Entrepreneurial designers are innovators and really important consultants for client businesses. A small design company might look at the heart of a client’s business and really use their innovation, which so many SMEs lack, to help a client company grow. Instead of a fee, they might look to be paid in shares.”
Top Tips to Help You Thrive
Both Perkins and Baker are clear about what designers need to do to succeed in the SME market. Shel Perkins suggests the following:
1. Strengthen your business skills with ongoing training. Seek out professional development courses and workshops, particularly in the areas of marketing and consumer research. You need to understand the issues and speak the language in order to partner more effectively with clients.
2. Sharpen your creative focus. Differentiate yourself in the marketplace by specializing in a particular design discipline or type of project. Be sure that it’s a service for which there will be continued strong demand.
3. Focus on particular client categories. Research market trends to identify specific areas of growth and opportunity.
4. Work on developing a consultative approach to selling. You’re providing a highly customized professional service that is ideas-driven and focused on innovation. Clients must not get confused and think you’re offering some type of commodity at low unit prices.
5. Strive to develop ongoing relationships. Simply completing one-off projects is not enough. Long-term, mutually beneficial relationships can enable your design firm and the client organization to grow and prosper together.
David C. Baker advises the following:
1. Narrow your focus: specialize.
2. Qualify prospects early to see if they’ve worked with another agency like yours before. Don’t be the first.
3. Don’t work with SMEs who are spending their own money. Work with someone who has budget authority over money that’s someone else’s.
4. Instead of showing pretty pictures of your work, talk about your thought leadership (in words, not images).
5. Rely more heavily on intentional referrals between SMEs, since they seem to listen more to each other.
This article was last modified on January 6, 2023
This article was first published on December 3, 2008
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