Case study: helping a design agency find their niche

When a Melbourne-based design agency saw their profits declining despite working longer hours, they knew something had to change. Our brief was threefold: examine expertise and client sectors; increase profit and return their weekends.

We worked with them for 6 months 2 years ago this week. At our catchup they confirmed they’ve doubled their 2022 FY revenue and no longer work weekends.

Here’s what we did.

The warning signs

“We’re so busy but there is nothing in the bank” was the first insight of our initial meeting.

The studio faced challenges familiar to many Australian design businesses:

declining hourly billing rates
increasing client expectations
competition from automated design tools
difficulty retaining talented staff

The catalyst

We often say there’s got to be a catalyst before we get a call. For this design agency everything changed when they lost a pitch for a major healthcare client. “The feedback was brutal but honest – they said our work looked great but they couldn’t justify our fees without understanding our claimed return on investment.”

Rather than lowering prices, we helped the studio make three significant changes.

1. Repositioning to focus on healthcare

Instead of being generalists, they focused their marketing exclusively on healthcare clients. Together we researched the sector, getting a better understanding of the metrics and learning the regulatory environment.

This deep knowledge meant they could speak the language of healthcare executives and identify problems others missed.

It did not mean they turned away ‘other’ work, it means they positioned their business (and specifically their website) to be more attractive to the healthcare sector.

2. We built a measurement into every project

We helped develop a simple framework to measure design impact across four areas:

user engagement (time users spent, increased purchase or completion rates)
operational efficiency (client staff time saved through this project)
error reduction (fewer user follow up calls/emails)
compliance improvement (regulatory requirements met)

For example, one of their projects was the redesign of a patient information system. The staff at reception shared records showing a 42% reduction in form completion errors and they calculated they’d spent at least a third less time explaining procedures

3. They changed their pricing model

Instead of hourly rates, the design agency now offers three tiers of service with fixed pricing based on project complexity and potential impact.

They still track hours internally so they can track trends like the most profitable services, and clients and sectors, but clients never see that. Clients pay for their outcomes, not their time.

The results

Two years after making these changes:

designers are happier because they can see tangible results
results are celebrated
revenue has doubled
profit margins increased from 11% to 20%
average project value increased by 65%
staff turnover reduced to near-zero

Most importantly, the studio now works with clients as strategic partners rather than service providers.

So what?

This case study demonstrates that even in a challenging market, design studios can thrive by:

developing deep knowledge in specific sectors
measuring and communicating impact
pricing based on impact rather than time

The approach requires courage to specialise and patience to build design impact evidence, but the rewards – higher fees, better clients, and more meaningful work – make the transition worthwhile.

Let’s keep the conversation going. Email Greg for a chat.

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Greg Branson
Design Business Council – business advice for creatives

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About Greg Branson

Greg’s passion is the research and development of methods that improve design management and the role of design in business.

His longevity is in his ability to change and adapt. Greg’s career as a traditionally-trained photographer; became an academic, teaching photography to design students; co-founded and ran Mackay Branson design (for over 25 years) until, recognising an area that he loved – design management – was not an area traditionally covered in design education, he founded Design Business Council. Since then he has worked alongside hundreds and Australian creatives helping them manage their business better.

Greg has sat on the AGDA Victoria and National councils, on a number of University and TAFE Advisory Boards and helped rewrite the VCE Visual Communication curriculum.

Outside of DBC, he is a passionate analogue photographer who spends an inordinate amount of time in his darkroom. You can follow his work on instagram @gregurbanfilm

Always happy to chat, he can be contacted here.