Here’s Part 2 of the Designing For Profits and ASID Survey results.
Looking for the Right Niche?
Designers still seem focused on selling products vs. services only. They said they will be selling more of the following product categories in a search to find the most profitable and productive niche:
Window treatments 59%
Respondents went on to say that the categories that provided the most profit margins were:
Window treatments 75%
Art and accessories 58%
Lastly, even if it’s all hype and marketing, Green will be more important than we think. The survey indicated that 40% of designer’s clients find green design to be important to them.
Survival Strategy– Alter your business model. Find the right mix of more profitable product lines, services and profitable clients. Are there any categories above you are not presently selling? Take this downtime to examine your business plan; see where you spend most of your time; decide if the clients you cater to are the ones you really want and determine where you make your most profit. You might be surprised at the answers. Whether it’s concentrating on high end, focusing on what you do best and outsourcing the rest or moving into new markets and niches-doing something is better than doing nothing.
Designers agree that the consumer is behaving differently today. We all realize that clients expect more and different things today than in the past. Almost half (47%) of the designers surveyed said that biggest change in expectations was the client’s desire NOT to exceed project pricing. Equally important (47%) was the need for cost transparency. The challenge here is that most designers find it hard to have frank discussions with their clients about budget, pricing and value- perceived or otherwise. Clients do not always understand the different value equations, so we must educate them. Hidden in the Designing For Profits results was the consumer’s strong need for speed, in both the presentation and design process. This forces shorter time frames that can be gut wrenching in an industry that traditionally works in long lead times and at their own pace.
Survival Strategy- Focus on Customer service. Yes, I know, my clients are becoming more demanding too. Taking the time to work in their budget, listen to their needs and simplify the process can differentiate you from the pack.
Designers Look into the Future
Without a doubt, increasing revenue from your top 5 clients is essential. According to 66% of the designers, over 50% of their business comes from fewer than 5 clients. (The old 80/20 rule.)
Also interesting was fact that based on their business goals for the next 3-5 years, the majority of designers see the next 12 months as a time to expand cautiously while others sit tight (46%). But 17% see it as a time to retrench, cut back and survive.
Survival Strategy– Sitting in your studio and wringing you hands waiting for the phone to ring won’t work.
- Increase your visibility- 25% of ASID’s respondents said they are increasing their direct marketing efforts.
- Market, Market, Market – not advertising but one-on-one business development. One in five designers said they’ll take on more consulting work to build relationships and 10% have started a website or joined a referral service.
- Be selective. There isn’t much point in marketing to people who aren’t buying. Recraft your marketing messages to appeal to niche markets and make sure your brand message is strong and clear. Clients need to have a good understanding of who you are, what is unique about you, what you can do for them and what value you bring to the table.
Think about what you did to become successful and pursue similar strategies again. Be positive, challenge yourself and remember that there is always opportunity in bad news.
How are you bearing up in 2009?