Fernando Del Vecchio

The challenge of communicating value

A question to which creative entrepreneurs have no answer to: the value of their proposal.

Read in spanish
El desafío de comunicar valor

Every designer faces, at least in one occasion, a question to which they have no answer to (or is inadequate or incomprehensible): what is the value that you offer? 

There are creative professionals that, despite of not being so good in technical terms, have being able to respond to that question. There is where the secret of having such good clients lies: understanding the value of what you offer makes the selling of your services much easier. 

What is value and why is design valuable?

Value might reside in the capability of solving a problem, answering a question, satisfying a need or desire. And it must be understood from the client's perspective, not from the designer's. Identifying a client's problem, turning it into a design problem and solving it, is the designers work.

Value is not price

Generally there is a tendency to relate value and price. We ask: “what is this worth?”, when we should be asking “how much is this?”. Value is the capability of solving a problem; price is the quantity of money involved in the promise of the proposal for providing the service. The value of the proposal is a client's subjective evaluation.

According to a study1 clients evaluate businesses' products and services from three different points of view, usually called “expected value”, and according to this, businesses build their proposals based on a “value discipline.”

What is expected value?

Different clients expect different types of values. There are clients that expect the best product available; some expect the best solution; others expect the lowest total cost for the requested product or service, according to the problem, need or desire they face at the moment. Businesses are oriented and respond to these three postures through three value disciplines. These are: product leadership, intimacy with clients and operative excellence.2

For example: when buying a computer, it's possible that you choose the “best product” according to your concept of value which corresponds to a brand and price; it might be that you decide for the “best solution” and this will probably be an evaluation that involves the best cost-benefit of certain brands and a price range; or it is possible that you decide for the “lowest total cost”; as every brand offers similar results, the most important issue is to get the lowest price available disregarding the brand.  

This may vary from person to person. We are not equal, and that is why there are clients willing to pay for a premium brand computer, while others prefer the economical option.3 The same takes place in clients' heads when hiring a design professional. According to the way they evaluate or think of design as a way or capability of solving a problem, that's the way in which they will respond to the proposal presented by a design studio or bureau.4

Using this concept to structure my own studio

The clients' expected value is related to a discipline by which businesses work in order to build their structure and deliver a promise. Businesses whose clients aim for the “best product” value, are oriented from the discipline of “product leadership”; if they search for the “best solution”, they are oriented from “intimacy with clients”; and if they expect the “lowest total cost”, from “operative excellence”. The discipline of product leadership works focused on innovation; intimacy with clients, on empathy; and operative excellence on efficiency.5

It's a mistake to try to be the best in all three disciplines, because it involves strategic contradictions. That is why it's important to focus on being the best in only one of them, and be just good in the other two. These strategic contradictions can be exemplified by the kind of employee you will require to do the operative work, according to the required discipline.6

Three different capabilities, three different ways to manage the talent, three different structures of the studio, on the basis of three types of expected value.

Differences between the designer's communication and the understanding of the client

Generally, creative professionals find it attractive to be innovative, communicating that they “sell innovation”. However, there are a very few clients that really consider that the communicated value and the one offered by any design studio is the “best product available”.

In the best case scenario, the client will understand the value of design as a differentiation factor, but it's likely that he/she thinks that innovation does not reside in design per se, but in other aspects of their business model. In other cases, the client will understand that the studio must provide a graphic solution to his/her request, leaving no space for the designer to propose any changes. In the worst case scenario, even if the client understands the relevance of design, he/she will tell the designer what he/she wants, the price he/she is willing to pay and the way he/she will pay it, leaving absolutely no space for negotiation neither in the creative nor in the economical areas. 

Those creative studios or bureaus recognized by clients who expect the best product, are those with a lot of experience and long trajectories, hired as specialists to offer answers that not everybody is able to deliver. Clients believe in and expect that value. There are very few in this group.  

Many clients, providing the similarity of the offers (for them, all designers have pretty much the same proposals), might be motivated to consider proposals where the main value is the best solution, offered by studios that listen to their clients, propose various alternatives, working as a team and reach to agreed and compromised solutions. This is hard for those who pretend to sell innovation, because they will not show sympathy to work in that direction. 

A third group of clients, probably the biggest, value low prices. And facing a large amount of providers, the client will choose the one that offers the lowest.

A recurring issue is the designer's communication: while he/she pretends to sell innovation, it's likely that the client understands that he/she sells a low price. The designer tells a story of innovation and the client isn't aware of it, and because the designers' non verbal communication, the client understands that he/she will get a low price. This is frustrating for the designer, but it's a consequence of what he/she does without noticing.7

If you decide to work under the discipline of “operative excellence”, related with the “lowest total cost”, work fast, deliver on time and collect effectively. 

All three disciplines and orientations, along with their associated value, are valid. All three of them are capable of turning your studio project in a very lucrative one. But you must be aware of what value does your client understand when you present a proposal, in order to clearly communicate it; and, as a consequence, to work oriented from the required discipline to deliver that value. The most important thing is to be coherent.

No matter how good you are, how many contests you have won, the awards you may have obtained. Clients pay attention to something else. They award something different, a different behavior, and different results from the academy. I want to be clear on this: market awards what academy ignores. And it doesn't ignore it out of unawareness, but because they choose to ignore it.

Do you have a lucrative studio in spite of charging low prices (according to your colleagues' opinion), because you can quickly identify the client's problem, promise a fast and effective delivery and comply? Clients perceive coherence, experience a good service and will compensate you economically. Most colleagues call that a “disloyal competition”. Nevertheless, what really is disloyal is to offer what you aren't able to or aren't willing to deliver, at a price the client can't or won't pay; working with a lack of enthusiasm, trying to educate a client who doesn't want to be educated; generating a terrible service experience and whining about it.

A disloyal designer is he/she who, through his/her behavior, destroys the clients' confidence in design and in designers. He/she is disloyal with his/her clients, colleagues and with those who tried to educate him to make him a good professional. 

A long term challenge

A long term project for a design entrepreneur could involve acquiring experience as a “low cost” service provider in order to learn the business; modifying his/her posture in the medium term towards the “best solution” by specializing in a discipline; and in the long run, after being recognized as a reference in that discipline, modifying his/her posture towards the “best product”. This is a road that will require focus and perseverance.8

The real challenge for a design entrepreneur is to stop paying attention to his/her colleagues' critiques related to his/her project. Each one must own his/her project, and that's why he/she makes decisions. The results will be a consequence of those decisions and of the way you carry them on. Remember, clients pay the bills, not colleagues. 

Conclusion

When we speak about value we should think of the client's expected value as a way to present our proposal. There are three aspects of the client's expected value and we should consider working from the discipline that allows us to deliver.

The project of your creative bureau is your decision, but no one (or at least no one that I know of) starts from the top (understanding the top as being recognized as innovators from the beginning). Remember the words of Alfredo Casero at a TED9 conference: “the only thing that starts from the top are wells”.  

Author
Fernando Del Vecchio Tigre
Translation
Ana Vargas León
  1. Treacy, M., Wiersema, F. (1995). The discipline of market leaders.  Bogotá: Grupo Editorial Norma.
  2. The relation between expected value and value discipline are: best product and product leadership; best solution and intimacy with clients; lowest total cost and operative excellence.
  3. Most likely your evaluation of value will change when buying different products.  For example, if you are buying groceries at the supermarket, it's possible that you expect a different value.  You will probably buy at a market chain that offers the best solution or the lowest total cost, instead of buying at a luxury chain that promises the best product at a higher price.  If you must buy work clothes you will undergo the same process and select a brand and price according to your expected value.
  4. That's why, answering an estimate request based only in a price or cost will not help in communicating the value that you want to offer.
  5. The relation between expected value, value discipline and focus are: best product, product leadership and innovation; best solution, intimacy with client and empathy; lowest total cost, operative excellence and efficiency.
  6. If you are oriented to product leadership, you will have to hire creative, innovative, and in many cases, hard to deal with, employees. In this cases focus of the management will be in the administration of the creative talent. If oriented on intimacy with the clients, you should hire employees that are capable of listening and working as a team with the client.  And if oriented in the lowest total cost, you should hire employees that are capable of following procedures to work with high efficiency standards, as opposed to the high creativity criteria by which the industry is ruled.
  7. For example: being late and badly groomed to your appointments, using inappropriate language. This details might not be important to your design colleagues, but are a sign of “low price” for a client. In this cases, if you communicate – even accidentally – that you work in that direction, nothing will help to try to convince your client otherwise. 
  8. Remember Peter Drucker's quote: “Long-range planning does not deal with future decisions, but with the future of present decisions.”
  9. Alfredo Casero: Presupuestar las ideas. The estimation of the ideas. TEDxRosario 2011.

Published on 22/10/2014

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Autor:
Fernando Del Vecchio

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