Crafting a Subscription Model for Creative Services

Designing a Subscription-Based Pricing Model for Creative Services

This session explores how to transition from project-based pricing to a subscription model for creative services, specifically in the context of graphic design and brand strategy. The discussion aims to help creative professionals increase their recurring revenue and provide consistent value to clients.

Understanding the Challenge of Subscription Models in Graphic Design

Difficulties in creating subscription models for general graphic design services

Chris Do acknowledges that developing a subscription model for general graphic design services can be challenging. This is due to the typically project-based nature of graphic design work and the varying needs of clients. However, he emphasizes that with the right approach, it's possible to create a successful subscription model that can generate significant recurring revenue.

Action Steps

1. Identify your core competencies in graphic design and related services
2. Analyze your current client base to understand their ongoing design needs
3. Brainstorm potential recurring design services that align with your skills and client demands

Defining Core Offerings and Financial Goals
Clarifying services and setting revenue targets for subscription models

The discussion begins by establishing Pik's core offerings and financial goals. Pik aims to provide general graphic design services, acting as an outsourced in-house design team for clients. She also considers offering Chief Brand Officer services. The financial goal is set at $300,000 in annual recurring revenue through the subscription model.

Action Steps

1. List all the design services you currently offer to clients
2. Set a specific annual recurring revenue goal for your subscription model
3. Identify which of your services could be packaged into a recurring offering

Focusing on Core Competencies

The importance of concentrating on primary skills rather than expanding too broadly

Chris strongly advises against adding services outside one's core competencies, such as motion graphics, unless there's a significant investment in developing those skills. He emphasizes that spreading too thin can lead to subpar work and increased competition from specialists. Instead, he recommends focusing on and showcasing the services where you excel.

Action Steps

1. Evaluate your current service offerings and identify your strongest skills
2. Remove or de-emphasize services that are not your core competencies
3. Develop a marketing strategy that highlights your expertise in your primary service areas

Understanding Current Pricing and Client Relationships

Analyzing existing pricing structures and client billing patterns

The discussion reveals that Pik's current pricing model involves monthly billing based on completed projects, with an average monthly revenue of around $10,000 per client. This insight provides a foundation for developing a subscription model that aligns with existing client expectations and spending patterns.

Action Steps

1. Calculate your average monthly revenue per client over the past 6-12 months
2. Identify patterns in client spending and project frequency
3. Use this data to inform your subscription pricing strategy

Developing a Subscription Model Framework

Creating a tiered subscription structure based on client needs and budget

Chris guides Pik through developing a tiered subscription model. He suggests creating three tiers: Bronze, Silver, and Gold. Each tier offers increasing levels of service and access to the design team. This structure allows clients to choose a package that fits their needs and budget, while providing a clear path for upselling.

Action Steps

1. Define three distinct service tiers (e.g., Bronze, Silver, Gold)
2. List specific deliverables and services included in each tier
3. Assign pricing to each tier based on the value provided and your revenue goals

Pricing Strategy for Subscription Tiers
Determining appropriate pricing for each subscription tier

Chris recommends setting the Bronze tier at $5,000 per month, Silver at $10,000, and Gold at $15,000. This pricing strategy is based on Pik's current average monthly billing of $10,000 per client. The tiered approach allows for both more affordable options and premium offerings, catering to a wider range of clients.

Action Steps

1. Set your baseline (Silver) tier price at your current average monthly billing
2. Price your Bronze tier at 50% of your Silver tier
3. Price your Gold tier at 150% of your Silver tier

Defining Service Offerings for Each Tier
Outlining specific services and deliverables for each subscription level

The discussion explores what services should be included in each tier. Bronze might offer a set number of design hours or specific deliverables per month. Silver could include more hours, additional services, or faster turnaround times. Gold might provide unlimited design work within reason, strategic input, and priority service. The key is to create clear differentiation between tiers to encourage upgrades.

Action Steps

1. List all possible services and deliverables you can offer on a recurring basis
2. Allocate these services across your three tiers, ensuring each tier offers increasing value
3. Create a clear, easy-to-understand breakdown of what's included in each tier

Addressing Client Concerns and Objections
Anticipating and overcoming potential client resistance to the subscription model

Chris and Pik discuss potential client objections to a subscription model, such as concerns about not needing design services every month. They explore strategies to address these concerns, including emphasizing the value of having a dedicated design team on call, the ability to roll over unused hours, and the long-term benefits of consistent brand management.

Action Steps

1. Compile a list of potential client objections to a subscription model
2. Develop clear, persuasive responses to each objection
3. Create a FAQ document addressing these concerns for potential clients

Transitioning Existing Clients to the Subscription Model
Strategies for moving current clients from project-based to subscription-based billing

The conversation touches on how to transition existing clients to the new subscription model. Chris suggests presenting the model as an evolution of their current relationship, highlighting the benefits such as predictable costs, priority service, and consistent brand management. He advises starting with clients who already have consistent monthly needs.

Action Steps

1. Identify clients with consistent monthly design needs as prime candidates for transition
2. Prepare a presentation outlining the benefits of the new subscription model
3. Schedule meetings with key clients to introduce and discuss the new pricing structure

Implementing a Chief Brand Officer (CBO) Service
Integrating strategic brand guidance into the subscription model

Pik mentions offering Chief Brand Officer services as part of her subscription model. Chris explores this idea, suggesting it could be a premium offering in the Gold tier or potentially a separate, higher-tier service. The CBO role would involve providing high-level strategic guidance on brand positioning, marketing strategy, and overall brand consistency.

Action Steps

1. Define the specific responsibilities and deliverables of a CBO service
2. Determine if this service should be part of the Gold tier or a separate, higher-priced offering
3. Create a detailed description of the CBO service to use in marketing materials

Focusing on Target Industries

Tailoring subscription offerings to specific industries for increased value

The discussion reveals that Pik's clients are primarily in the health tech and life science industries. Chris emphasizes the importance of leveraging this industry focus in marketing the subscription model. Specializing in these sectors allows Pik to offer more targeted, valuable services and position herself as an industry expert.

### Action Steps

1. Research the specific design and branding needs of the health tech and life science industries
2. Tailor your subscription offerings to address these industry-specific needs
3. Develop case studies and testimonials from your existing clients in these industries to showcase your expertise

## Balancing Workload and Team Capacity

### Topic Area - Managing resources effectively to deliver on subscription promises

Description: Chris and Pik discuss the importance of balancing client workload with team capacity. As the subscription model grows, it's crucial to ensure that the team can consistently deliver high-quality work to all clients. This may involve hiring additional team members or subcontractors, or carefully managing the number of clients at each tier.

Action Steps

1. Assess your current team's capacity and productivity
2. Create a plan for scaling your team as you acquire more subscription clients
3. Develop systems for tracking and managing workload across all subscription tiers

Marketing the Subscription Model
Strategies for promoting and selling the new subscription services

While not explicitly discussed in detail, the conversation implies the need for effective marketing of the new subscription model. This would involve clearly communicating the benefits of the subscription approach, showcasing the value of each tier, and highlighting the specialized industry knowledge that Pik's team offers.

Action Steps

1. Develop clear, compelling marketing materials that explain your subscription model
2. Create a comparison chart showing the benefits of each subscription tier
3. Prepare case studies demonstrating the long-term value of consistent design support

Measuring Success and Adjusting the Model

Tracking key performance indicators and refining the subscription offerings

Although not directly addressed in the transcript, it's important to implement systems for measuring the success of the subscription model and making necessary adjustments. This would involve tracking metrics such as client retention, upgrade rates, and overall revenue growth.

Action Steps

1. Identify key performance indicators (KPIs) for your subscription model
2. Set up systems to track these KPIs on a monthly and quarterly basis
3. Schedule regular reviews to assess the model's performance and make necessary adjustments

Overcoming Limiting Beliefs
Shifting mindset from project-based to subscription-based thinking

Throughout the conversation, Chris challenges Pik's initial belief that creating a subscription model for graphic design services is too difficult. He emphasizes that with the right approach and mindset, transitioning to a subscription model is not only possible but can lead to significant growth and stability in the business.

Action Steps

1. Identify and list any limiting beliefs you have about implementing a subscription model
2. Research and connect with other design professionals who have successfully implemented subscription models
3. Develop a positive affirmation or mantra to reinforce your ability to succeed with this new business model

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Resource:

How to Ask Better Questions | The Art of Listening & Communication
https://youtu.be/KCQ7FAsZCHM?si=BBQqNt_UdHPOB34B

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