Podcasts
FGDO Podcast 206 - How to Move from Commodity to Highly Valued in Your Business
by Michael Huggins, RGDWe’re going to talk about the reality of commoditization in your Design Business. What it is and what you can do about it using a very practical and effective strategy.
Lots can be said about commoditization and the impact it can have on you and your design business. I don’t want to get in complicated discussions about this topic, nor do I want to discuss all the subtle nuances of it.
Simply said, I want to discuss commoditization in terms of the impact is has on the design entrepreneur. And that is… when it reduces your services to a common, everyday, product in the mind of your prospect and client. And therefore causes the client to buy design and communication services based on price alone.
Commoditization is what happens to your service when it becomes indistinguishable from others like it in the marketplace.
When this happens on a consistent basis in your company it means that you stand to make a lot less for your services tomorrow than you did yesterday.
Why does commoditization happen?
It could happen for any number of reasons. But here are the big three that I’ve identified….
• Overabundance
the marketplace is flooded with competition. Many of our clients can get what we do from many sources. There are thousands of small design and communication shops all over the country. And many of them are easily accessible. You can get services from small one person-home-based firms, many printers offer design communications as a service, you can get it online at huge virtual companies. You can buy freelancers easily on sources like E-lance and other similar websites. And many of our clients always seem to know a cousin, neighbor or nephew who does (seemingly) the same thing that we do.
• Technology Advancements
Technology has made the barrier for entry into this profession/marketplace much easier to attain. As technology makes things easier and easier for us to do. It also makes it easier and easier to do for our clients to do. Many companies we deal with have bought Adobe programs and web programs in hopes of reducing cost by bringing work in house. It also means that our experience is threatened because now those entering the marketplace with less experience can seemingly produce the same results. This means our experience doesn’t carry the weight and respect that it should.
• Loss of value
The marketplace has lost the value in what we do. Partly because of the noise in the marketplace today. There are so many factors to a successful business of which design and marketing is only a small piece of the puzzle. And all other businesses are claiming that their product or service is the most important or most relevant.
But we don’t get away of blaming only the external elements for our problems.
We are partly to blame for a loss of value too. We’ve allowed this to happen and contributed to the devaluing of our service. How do we do that? Through our lack of understanding of our craft. How it applies to the businesses we service. How they should use it effectively. When they should use it. When they shouldn’t use it. How to use it to its greatest advantage. When to invest with it and when not to.
Many designers approach design as a one-size fits all solution.
ie: You have a business? Therefore you need a logo. The reality is that not ALL businesses NEED a logo or would even benefit from one. This is an over simplification I know but it illustrates the point I’m trying to make here to you. You can’t just apply what you do as a designer to every business the same way with knowing more about the firm you represent and how you can help them.
And why do we have this approach as design communicators? Mainly because we don’t know the answer ourselves. We don’t fully understand how to use design and how our clients can best use it. And as a result we don’t defend or educate our client so that they know better.
Therefore we allow them to oversimplify of design and communication process giving it a low priority position in their minds. Which reduces the value and significance of it in their businesses.
Becoming commoditized is a slow and painful death for a design business. Many can see it happening but are not sure what to do abut it. And as a result many designers do nothing about it while they watch their business become indistinguishable from every other design service out there.
Commoditization is a reality of doing business. And before you start feeling sorry for yourself – telling your self that you picked a tough business to try and develop – give your head a shake. All businesses are under constantly under the threat of being commoditized.
They make it their purpose and goal to protect the stability and the profitability of their business from erosion of value that commoditization causes. And they do this by improving upon, and differentiating their services (or products or whatever it is) from any of their competitors. It’s an on-going process of review and development.
And it’s no different for you in your design or communication business.
So how do you do this? How do you improve on your services or communications output?
Well one simple way that I know of to differentiate your services from your competitors is to ADD something that is uncommon among your peers.
It doesn’t take more than a few minutes of scanning the Internet looking at designers and design firms and other MarComm companies to discover that most businesses look the same. They sound the same. And they offer the same services.
The problem that we have today is that clients can get whatever they want when it comes to design services. So you only need to be a glorified “Order-Taker” to do business with them.
And since what you provide them looks sounds and tastes like every other design firm out there their natural and logical response comes back to price. And they ask themselves the question: “Why should I pay more for your services than I would from one of your competitors?”
This type of marketplace environment makes many designers are reactionary. Waiting for a client or prospect to come to them and make a request. I want to talk about a proactive approach to modifying your services and moving your positioning from “order taker” to a new level.
And that is to stop thinking of yourself purely as a designer and start thinking of and positioning yourself as a consultant.
Much of what is missing in the marketplace today are services that help guide and direct the client to making the best choice. To help them avoid pitfalls, common mistakes. They are lacking guidance to spending their money wisely on the best investments.
When you take more of a consultant role you are not only taking a leadership position I their businesses but you are assuming the role of trusted advisor.
Here are 8 easy ways to add more of a consultant role into your business and help protect you and your business from being treated like a commodity.
1. Always educate your client on the best design approach to take
Inform your clients on the most effective methods and design approaches to take.
Tell them the best way to use the tools you create for them.
Talk about the strengths and weaknesses of each end-product you are creating for them. And provide proof by using past examples and case study stories you have from past clients or projects. Or do some research and find out how others have applied successful design strategies and then share these with your client.
Put an importance on doing the right things to get the best results.
2. Be Current and Relevant
Connected to educating your client is your responsibility to provide current marketplace feedback in relationship to what you create for them. Stay on top of how design and communication tools are being used I the marketplace. Inform them of popular trebnds and developments. Provide studies or feedback on how the marketplace uses the tools and projects you create.
3. Be the “Knowledge Center” for what you do
Connected to education and marketplace feedback is positioning yourself and your company as the Go-To Source when your client needs information. This can be as simple as making yourself accessible o the phone for questions or more formal by providing newsletter updates, market watch alerts or a resource binder of best practices and guidelines for creating the most effective communication tools.
You can also add value and differentiate by creating knowledge tools like binders or an on-library specifically for clients.
4. Focus on the end result with every project
To get out of the ‘order-taker mode’ (ie: they ask for a newsletter and you say “sure” anything else?). Get in the habit of asking clearly what they want to accomplish with each project they request from you. Get them to identify the problem that each project is solving before you start. Or HELP them define what the problem is before you start “doing”.
Often clients come to us with what they ‘need’. Not what the problem is. You can easily shift this focus by starting a conversation around their request. As a consultant you are finding and identifying the problem, goal and objective of each project as well as providing the final solution.
5. Demonstrate you understand their goals and desired outcome
One of the best ways to elevate your services beyond that of mere designer is to put an importance on their goals by writing them down in the form of a creative brief.
This is just as much about acknowledging you heard their needs, goals and desires, as it is about demonstrating leadership. This often seems like a burden or an added step in the process especially after you’ve interviewed and understood your client already. And as a result is often difficult to do from a time allotment perspective. But writing out your objectives and goals in the form of a brief adds a higher level of professionalism and value to what you do for your client. And believe me it is valuable to your client.
In this fast paced environment we often rush ahead to get things accomplished without fully thinking things through before we start. And your clients are no different.
Providing a brief gives your client a second chance to look at the project with a fresh perspective. There are often more focused and clear and use the brie to fine-tune their efforts. This saves them and you wasted time and effort.
I have clients who also use this tool to discuss the direction with their bosses as a way of getting final buy-in on the project and direction. This makes them look good. Which means you achieve a new level of value to your client.
It also gives you an opportunity to review the objectives and determine if you can accomplish them with the project you have been asked to do. And to address any issues with your client before you spend too much time and effort on the project.
6. Evidence the Invisibles
Just like the majority of an iceberg sits below the water line – up to 90% of the total ice burg – and what you only see is only the 10% that is visible above the surface of the water. There is much that goes on behind the scenes in your business that is not visible to the client but creates huge value to them. They just don’t know it. And what they can “see” they can’t “get.”
Your client doesn’t see (or sometimes even care) about what you do behind the scenes. This makes it very easy for them to think there is nothing to it. ( have you ever heard your client use the phrase “you can just whip this up” or “it’s really simple”) Comments like these indicate there is a mindset developing to disconnect them from what you do. And it starts the process of devaluation in their minds.
Don’t allow them to get into this mindset towards you and your services. Let them know in many different ways what you are doing for them behind the scenes.
Many designers let the opportunity to inform their clients about the work that goes on behind the scenes for fear that they will be seen or viewed as braggarts. Or they fear that they will only bore their client.
It’s your role and job to demonstrate and communicate what is going on behind the scenes in your business. Why do I say this? Because your client won’t always pickup on the value of your services. They aren’t always self-evident to them. So it’s your job to let them know what is going on behind the scenes.
This won’t only create greater value in their minds but it will elevate the quality and status position in the mind of your client.
7. Define your process
Place an importance on process. That there is a right way and a wrong way to do things. And show your client through examples the results of each approach. Place an importance on following and adhering to systematic processes. And attribute the importance to receiving predictable results as evidenced by your clients.
8. Inform before they ask
One of the biggest problems clients have besides not knowing what comes next in the design process is knowing when they will get it. Designers are often sketchy and evasive when it comes to deadlines and updates. They sometimes avoid updates and client contats for fear of getting an increased workload or a change in scope that will impact therir current progress.
But you can’t be like this. To be elevated and valued means that you need to lea the process. Don’t keep your clients guessing what happens next in the process. Tell them what they can expect next and when.
Then be careful to do what you say you will do and follow through with it.
You not only stay accountable to your client but the become accountable to you.
Consulting is about adding more value to your services than your counterpart competitor. And then it’s leveraging that competitive ness to justify higher prices and retain those fees due to the additional value you create. When you add services standards like I just described you make it harder to put a simple price tag on your project because what you bring to the table is so much more than any other service.
Well that’s it for another episode.
I hope you start looking at your business today for ways that you can create additional value for your client and change their mindset they may have from commodity to valued consultant and advisor.
Have a great week…
Dedicated to Graphic Designer SuccessMichael Huggins
This article has a podcast! Click here to listen!
Like this article? Share it!
[BACK TO TOP]