Business Articles from Design Management Resources: Free Advice from the Experts!

About the author:

G. Martinez

For over 17 years, G. Martinez has been in the industrial design business. Trained by the Art Center for Design in Pasadena, California, as an industrial designer, he then went on to get his MBA. Why? Because, he says, to better understand the language of corporations: how economics, finance, and international marketing affect how the corporate management/client makes decisions. I think he's smart to want to know how the corporate side thinks and to understand the businesses practices they use.

Until recently, G. was the Director of New Business Development for Gad Shaanan Design, a highly respected, 22 year old, Product Development firm with offices in Montreal and San Diego. You may recognize some of their clients: Bombardier Transportation, Copco, Kyocera Wireless, Siemens. I see G. as one of our design industry's young leaders. He keeps current with the challenges of change that we all face and shares his insights and recommendations in this article for Design Business. He also speaks and writes about the strategic role design plays in our competitive global marketplace. Contact him at Martinezg3d@aol.com.

--- Linda Fisher

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PROACTIVE MARKETING
"Staying Alive Today and Tomorrow"

By "G" Martinez

When Linda Fisher and I spoke recently, the subject of "selling" design services and landing projects in today's troubled economic waters became the crux of our conversation. During that discussion, she asked me if I would be interested in writing an article about the marketing and selling of design services, from my point of view. As we spoke further, and I listened to her more, I thought to myself, "Hmmm…an opportunity to tell others what to do and how to do it…" Secondly, and perhaps as basic human nature would dictate, I asked myself, "Why should I share my knowledge in this area with others?" Being the nice guy that I am, it seems like the right thing to do, and my insights may benefit those of you out there trying to decipher what you can do to develop new business. This might particularly benefit industrial design firms who are being challenged by intensifying global competition.

Background

Before I begin to share with you the "how to's" of selling design, I thought it would be important for me to summarize my background and experiences in this area. I've been practicing, leading and promoting design for 17 years now, since graduating from Art Center. Even before that, at the ripe age of 12, I considered myself an entrepreneur. I started selling sketches of "monster" hot-rods (remember those?), space ships, automobiles of my creation, and the not-so-glamorous caricatures of teachers, to students for anywhere from a dime to fifty cents (and copying them by the hundreds on the school's copy machine…Thanks Brooke…)! The latter of which got me into considerable trouble when Dr. Smith (name changed to hide his identity…), the dean of students found out about my money-making business….and put a quick end to it.

After that, I ran a paper route and became one the county's leading "under 16" new subscription sellers. This earned me an all-expense-paid trip to a dude ranch in central Florida. At the same time, I cut lawns on weekends and after school. These early efforts allowed me to purchase my first car, an "orange" 69 Camaro RS with no a/c (have you ever been to Florida in the summer?) By the age of 16, I had become a very popular guy in a neighborhood full of girls who preferred riding to school in a car as opposed to a bus. Those experiences taught me that doing the job was only part of the picture, and that landing more business, and maintaining clients as "clients" for as long as possible were equally important as doing the job.

While at Art Center about a year away from graduation, a Marketing Executive (what did that mean? I remember asking myself…) from a large automotive firm, came by to give us a critique of our sponsored project and began throwing out words like ROI, market share, sales, marketing strategy, demographics, psychographics, cost of selling, etc., etc. Afterward, I approached him and asked what did these terms mean? He politely and patiently began defining them, what they stood for and how they contributed to the bottom line. After finding out that my alma mater didn't really teach us about these subjects, he suggested that I might investigate taking some courses in business and marketing.

The very next semester, while handling a full load of classes at Art Center and dealing with a part time job, I enrolled myself in a nighttime course at a local community college to study those very same subjects. That experience stayed with me to this day and basically forced me to understand how marketing, sales, basic accounting, and other related subjects are essential to running and selling the services of a company or--in this situation--a design firm. It became very obvious to me that without a basic marketing plan in place, a design firm would flounder and probably die.

After graduation, I became a member of IDSA and did some freelance work. Next, I was employed by a promotional marketing firm designing exhibits that traveled around the country to major shopping centers, promoting new products, consumer services and entertainers, for companies such as Apple, Disney, General Motors, GE, Heinz, Hoover, and Subaru. My claim to fame there was that I was part of team (designers, marketers, advertising, and sales) that launched Tiffany via the mall venue…Yes, there was life before Brittany Spears! In 1989, I co-founded an ID/Packaging design firm, which won projects from some prestigious corporations, such as Asics Shoes, Disney Channel, Nike, Marcy Fitness, Mattel, Prince Sports, Tupperware, Warner Bros. and many more. To this day, I strongly believe that employing a marketing plan coupled with a strong sales force, were critical to the success of the firm, which grew by 500% during the first five years!

Then, through IDSA I became involved in establishing one of the nation's first ID programs at the high school level at a magnet school in Miami. I was then recruited to turn around an "image & awareness challenged" ID program at a college in Ft. Lauderdale, which was transformed from a 2- to 4-year IDSA sanctioned program, and grew from 35 to 110 students in a period of less than four years. While running that program, I decided to augment my ID background with an MBA degree…was I crazy? Didn't I have enough on my plate? Sure, but the perspectives gained during this experience have become invaluable to me thus far (I'll explain later).

In the meantime, while still involved in IDSA, I was elected VP of the Southern District, where I was dubiously challenged to organize and promote two back-to-back "wedding-like" regional conferences, which drew record crowds each year. As VP, I was also a member of IDSA's Executive Committee where I helped formulate key decisions, which currently affect our profession. After that, a mutually beneficial situation arose, whereby I was tapped to open and manage the Southeast division of a large Midwest-based ID firm, where revenues exceeded goals and expectations by 100% during the first year! Up until recently, I worked for a Canadian-based design firm, where I helped them become more visible to and proactive with the ID community, as well as with large Fortune 100 firms in the U.S.

So now that you know a little more about me, I'll get to the heart of this article and outline some of the key points I think are important when selling design, as a business-to-business service. A general warning: a) I'll preface these thoughts by stating that these are my opinions and suggestions based on my personal experiences and outcomes. They may not be "the only way" to achieve results. b) Since designers are generally not business people, some of these statements and rationales may seem like "gobbledygook" to some, nevertheless, they are common practice in other service sectors, c) this is written as if I were teaching a course on marketing and business to college level ID students and young designers, while also allowing for recent grads and existing business owners to comprehend the tangibles and intangibles of marketing and promoting a design firm, and, d) no theories, no pie charts (although at 11:15pm, a slice of apple pie sounds good right now)! No long and convoluted ethereal messages from the gods of design. Just plain and simple directives to employ if you want to capture, retain and survive in today's and tomorrow's "dog-eat-dog" business environment!

SELLING THE INTANGIBLE:
"The Steak vs. The Sizzle"

Unlike many other professions, ID is challenged with the goal of selling a service or product with an outcome that does not yet exist, thus placing it in it the dubious category of "intangibles". That can be a daunting to those charged with marketing or selling the services of an existing or new firm and even harder for someone on the other end of the phone, who does not have a design background, and who is trying to understand why they should consider your firm. So, how do you convey your message and gain acceptance?

Let's assume I'm the President/Owner of a successful (the largest in the U.S.) business that produces folding lawn chairs. One day, a designer from an ID firm calls and tells me they would like to offer their design services to us. They have 20 years of experience, have won numerous awards, have 20 people on staff--5 designers and 5 engineers--and they have a really cool office with lot's of PCs and Pro XYZ software. The designer says we should also definitely visit them because they have a great view of lake Pie in the Sky.

Notice that the person calling me has just spent the last 10 minutes of my precious time trying to sell me on the features and details of his design firm and what he thinks I want to hear. At no point did he ask me questions about my company, my environment, and the implications of the economy on my company, or my needs. In other words, we did not have a conversation! Nor did he qualify "why" I should consider his firm.

That's what many other industries call selling the "sizzle" (the features and details), and not the "steak" (the benefits, values and outcomes). The latter would help me develop new products, capture market share, and make my company a handsome profit in the process! Selling the sizzle DOES NOT WORK, yet in the 17 years that I have been in this business, I must have heard hundreds of designers try to sell themselves or their firms to potential clients in that manner.

Selling the intangible must first and ultimately connect with understanding the core fears, expectations, and needs of the person(s) and the company you are targeting. Before doing so, it's important to know that in the sales cycle (the time it takes to engage a new job), an individual at a firm you are calling is first a suspect (you only know name, title, type of company), then a prospect (you know them by name; know they have a need; you've given them a proposal) and finally a client (they've engaged you and your firm).

To fully comprehend this concept (selling the steak and not the sizzle), I'll outline the categories, which I consider essential to communicating why they should buy from you. Those four key areas are:

Your Value Proposition - While other creative segments such as Architecture, Advertising, and even Graphic Design, have been able to cohesively present themselves as necessary, value-added services to their clients, ID, for the most part (exclusive of a handful of "well known" firms in the U.S.), has "struggled to capture that same level of acceptance and value with corporate America!" There! I said it and I'm still here! To me, a "value proposition" is similar to mission statement, but not as vague. It's a combination of many factors, many times very specific to the individual or firm selling a product or service, which ultimately means qualifying who you are, what you do, why you, and then creating the "value proposition."
To create your value proposition, you must, open-mindedly, ask yourself the following questions about your firm:
  1. What makes us different and unique from XYZ Design? (Culture, software, specific industry know-how, etc.)
  2. What type of "value" do we bring to the table? (Pricing, geographic locations, range of services to choose from, experience in a variety of industries, etc.)
  3. Are my fees in line with the suspect's expectations?
  4. What have we achieved in the past, and can we present factual data, which would augment the experience, and value our clients have achieved with us?
  5. Why would a suspect choose us over XYZ Design?
  6. What are we really good at? (Don't try to be the source for all)
The Environment - Unfortunately, many design firms and those selling design services fail to qualify and fully understand this area. They blindly go about calling and sending out information to those they think should be receiving it, without truly identifying the client's current environment or needs. Instead I would suggest you begin by analyzing each and every "suspect" by addressing the following questions:
  1. Is he/she a decision maker with the authority to give the final go-ahead with new projects, or part of a group charged with carrying out that task?
  2. Has the suspect's department been recently downsized and why?
  3. Is the suspect in a growth or declining market?
  4. Is the culture of the suspect's firm open to outsourcing design services?
I think you see where I'm headed with these questions. BEFORE you call ANYONE, sit down and write out a series of questions like these and make them open-ended to ensure that you engage the suspect in conversation to gain answers to those questions.
Second, I would strongly suggest that you or your marketing director conduct a comprehensive "analysis" of the market your suspect is in. For me, web based research (I could write another article about this subject alone…) is the way to go because there are literally hundreds of fee and non-fee based sites which will give you very accurate and succinct information about your suspect's company. Valuable information such as sales figures, product lines, officers and key employees, its competitors (this is great because now you know who else to call if the first company doesn't pan out), market share, profit and loss statements (don't worry I won't go CPA on you…), and much, much more. I'll elaborate more on the "how to" later in this article.
Implications - Now that you know what your suspect's environment might be like, we'll need to analyze the implications of that environment to your suspect's day- to-day duties and responsibilities. Implications come in many shapes and sizes, and are often not the same from suspect to suspect. They tend to negatively affect the workflow, processes, morale and outcomes of a firm and its employees, which, might be a benefit for you! How so? If you know that a suspect's department has been recently downsized because of overhead cuts, yet they are still being forced to output the same number of products per year with the same budget, it's obvious that the implications to the survivors of this downsizing, are more work, stress, deadlines, and less time for themselves and their families.
In addition to that, what happens if they can't perform their duties with fewer people? Will they lose their jobs? Will engineering take over this function? Will their function be sourced overseas (I'll refer to this later)? The opportunity for you in this situation (or for that matter in a myriad of other scenarios) is to realize that these implications must be acted upon immediately! Converting these implications into needs, which are then woven back into your discussions with the suspect, may ultimately lead you to write a proposal and land the job. We'll talk more about this later as well.
Needs - In this section, we'll need to address the actual needs your suspect may have, which have been uncovered during your environment and implications questioning earlier in the process. Then, you can infuse your value proposition into the equation. If you asked the right questions, you'll know, for example, that your suspect has the same amount of work to perform with fewer people, less time, etc. But, they have a budget and are willing to outsource ID services to help alleviate their hectic lives while meeting the objectives of their company. So, in this situation, the critical needs for them (or opportunities for you) are: time, people, budget, and the output of new X number of products per year. It's up to you to now carefully dissect this and other answers and address them to your benefit.
For example, after studying the suspect's environment and implications, I would answer with a "needs analysis proposal", as follows: "Ms. X, I understand your department has been downsized and that you still have to respond to marketing's needs of 30 new products per year, yet you don't have the time or the people to do so and don't know what to do". What if I told you that we could help you achieve your goals while alleviating your constraints? I would propose placing a designer in-house to manage the day-to-day liaison between your firm and ours, while providing you with a team of three designers and one engineer, whose only responsibility will be to service your goals. We would be able to do this at a cost that represents X% of your total budget (the response you give could vary from situation to situation, so be careful to study what's been said and how you could gain advantage from that). We would also be willing to provide you with a quarterly billing cycle to help you alleviate your paperwork."
Now after presenting your needs analysis proposal, you tell the suspect about your firm and its value proposition. Tell the suspect how you've helped other clients in the suspect's particular market sector and what those results were. Or, how you've increased market share for XYZ and for ABC corporations while keeping development costs at 2002 levels. And finally, you might share how many awards you've won for your clients. Again, these details are NOT addressed at the beginning of your conversation, but at the end of the process when you know whom your client is, what their implications are, and how you'll answer their needs.

BEING PROACTIVE:
"Marketing 101"

Knowing that "selling the steak" and not the "sizzle" and understanding how your suspect's environment, implications, and needs are important to creating your value proposition, we'll break down what marketing really is and how to leverage it.

First and foremost, marketing is "not" sales, and sales is "not" marketing, nor should they be used as interchangeable terms! Marketing is "the business or activity of presenting products or services to potential customers in such a way as to make them eager or willing to buy." It also addresses the positioning of your product/service, the value proposition of your product/service, the brand message of your product/service, the cost factor of your product/service, and the differentiation of your product/service. Sales carries out the directive of the marketing plan. Interestingly, depending on which publication you read, many small (less than $100 million in revenue) businesses (yes, all ID firms fall in this statistical category) do not have a marketing plan, and do not understand the elements and benefits of such a tool. Furthermore, many businesses fail to accept that this is critical to staying alive…that's why most do fail if they do not have a marketing plan, and it's happening right now all around us!

From my actual day-to-day management and MBA experience, the functional areas of marketing (sales, advertising & promotion, public relations), are intertwined and crucial to successfully selling your product/service. Not addressing them in whole or in part can be and has been detrimental to the success of many firms in our industry and many others. Therefore, executing a marketing plan with elements listed below is highly advisable.

Sales - the primary category of this equation will not only derive the revenue (cash flow) your firm needs to grow and prosper, but, will ultimately provide the operational capital needed to market, advertise and promote your product/service. In some companies, the revenue derived from sales may be as much as 90% of all the revenue that company generates! Some ID firms have sales departments, comprised of sales/business development people, while other firms prefer to have senior members of their staffs, or actual partners, engage in this activity.
The choice is yours and depends on the size, nature and sophistication of your firm. However, from my perspective, if you can afford to and are open to it, by all means hire people to sell your product/service. Although there are many arguments to that scenario, I would say that if you're faced with two specifically different functions, you are in essence diluting your effectiveness, time, and potential success ratio. These individuals (sales people) could be designers who have a better sense of business dynamics than some of their peers, or they could be transfers from other disciplines (i.e., architecture, graphics, advertising, etc.) who have performed that function, yet who understand the challenges of selling creative services.
To successfully develop new business, the individuals you hire (or utilize from within) must have a clearly defined strategy with goals, milestones, and financial opportunities (the carrot at the end of the stick…), which are typically set by the owners and upper management of the firm. A marketing director with an actual marketing "background" (preferably from an intangible service sector) could also perform this duty. Goals should be set for the sales person, such as:
  1. Cold calls (per week) - based on my previous design firm ownership and from working for others, it takes a minimum of 150 calls per week to engage in 10-15 real conversations, to set up 3 presentations, to secure 1 project per month…! Now throw in the fact that there are 100 other design firms trying to secure that same client also!
  2. Milestones - monthly and quarterly milestones should be set for number of calls made and attempted, the number of meetings scheduled, the number of projects secured, and the business volume reached.
  3. Financial - salespeople (like most of us) rely on both psychological and monetary incentives to live the lifestyles we lead or wish to lead. Financial goals allow someone to measure his progress and adjust (i.e., maintain or increase efforts) his performance to meet those goals. If you are a design firm owner, set the goals, make the commitment to pay these folks accordingly, and let them do their jobs. They are your revenue stream!
Advertising & Promotion - This is a tricky area, because if you don't have the sales revenue to place ads and to drive business to you, you'll be hard-pressed to extract results from this tool. If you do have discretionary monies available, by all means please sit down and develop an advertising & promotional campaign (with a budget) that will expose, differentiate, promote, and drive new business to your door. This could be accomplished by placing ads in business or trade publications, speaking engagements, reserving space at major trade shows you wish to grow your business in. Your efforts in this area should be consistent, proactive, and focused on the long term. If you think that placing ads in one publication per year will boost your sales, you've been watching too many re-runs of Heather Locklear as Amanda, the ad agency guru (who whips-up an entire ad campaign and makes companies success stories in one episode) on Melrose Place!
Public Relations - Positioning yourself in front of the public or in this case "your industry" can be advantageous as well. This tool will allow you to create an image of who you are, what you stand for, and why you should be considered in that manner. Movie stars are perhaps the best and most adept at using this tool. How many times have you simultaneously heard about one of them on various TV shows or in a variety of different publications promoting XYZ, only to finally realize that all this led to the release of their new movie about XYZ? It's a carefully crafted formula that publicity agents and PR firms engage in to help position their clients throughout their careers.
Some take full advantage of this and thus enjoy very prosperous and fulfilling careers that last a lifetime (i.e., Bob Hope, Madonna-she's trying--and The Rolling Stones…). Others will attempt the self-promotion/half-baked option, with maybe less than adequate results (whatever happened to Mickey Rourke, Jean-Claude Van Damme, or Kash-a-Goo Goo…remember them?). Which one are you? Which one would you like to be?
To fully capitalize on yourself in this category, I would suggest speaking engagements relative to your firm's forte, presentations to the non-design community, or a series of volunteer acts such as donating the use of your offices to the local high school design program. Again, as stated under the advertising area, if you have the budget to engage a PR firm to execute a strategy for this, by all means do it. It really works! Just make sure that the PR firm you hire understands your business! Not every PR firm does. We need PR speaking and media opportunities that are a fit between design firms and their "suspect clients."

FINITO, EL FINAL, THE END…

And if all of this is not enough, we're currently being pushed, pulled and squeezed by overseas manufacturers who are rapidly assuming the role of designer and manufacturer to OUR clients at alarming rates. They're hiring designers from Europe, Japan and Taiwan to execute design, engineer and manage the process through prototyping and manufacturing "directly for" large multi-nationals for free (design becomes part of delivered product…) and at low rates (try 50-75% less than US firms…) and in blazingly fast time frames that we're just not accustomed to! I know this because I recently heard an ex-executive of a large German conglomerate give examples of how they are "globalizing" their design & development efforts in order to maximize budgets, people and time to market!

So, if you've managed to finish this article by either cursing me or (hopefully) by thanking me, I think I've accomplished what I've set out to do. Some of you will not get what I'm saying and will adamantly think that this is a bunch of baloney (it's now 12:30 a.m. and a baloney sandwich really sounds good…)! that someone else should worry about. The rest of you will question what you're doing and think about ID as a business that can be leveraged to your advantage, if you employ a marketing strategy. The suggestions I've made about perceived value, marketing, sales, advertising, PR, and "selling the steak and not the sizzle" should entice all of us to be more proactive and focused on long-term objectives.

I encourage you to seek information about what's happening in our industry as well as professional development programs to strengthen your skills to market and sell yourself or your firm in this ever-changing, paradigm-shifting, globally-challenged profession, and crazy business world we live in. I would further emphasize, as in my case, the need for getting a certain amount of business education; if you are serious about building a strong firm that can rise to the challenges designers are presented with in the new global economy. I am certainly glad that I was able to take some business courses that opened my eyes to the value of marketing, sales and public relations! My recommendation to all of you is to learn all that you can--either in a business school, or from business professionals. There are people out there who can help you to put your design business on a much firmer footing! Take advantage of what they have to offer you!

Plan, implement, and carry it out now, and you'll survive and prosper like Bob, Madonna, and The Stones! Fail to do so, and you'll be the next Mickey, Jean-Claude, or Kash-a-Goo Goo of the ID world!

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