How to create a subscription based model for graphic design business.
Key Takeaways
The conversation between Chris and Pik provides valuable insights into the potential and challenges of implementing subscription-based models in service design businesses. Key takeaways include:
Shift in focus: Subscription models allow designers to redirect energy from client acquisition to producing high-quality work, potentially leading to improved outputs and increased client satisfaction.
Value creation: Successful subscription models must balance client value with business sustainability, offering clients impactful results at an attractive price point while remaining profitable for the designer.
Adaptability: While some design services (like web design) naturally lend themselves to subscription models, graphic designers can creatively adapt their services to fit this model.
Strategic pricing: Implementing gradual price increases and creating demand through limited supply can help maintain profitability and exclusivity.
Client relationships: Subscription models can foster longer-term client relationships, allowing for deeper understanding of client needs and more strategic design solutions.
Challenges: Designers must navigate issues such as defining scope, managing client expectations, and maintaining consistent value delivery over time.
Future opportunities: The subscription model opens doors for integrating new technologies, offering cross-disciplinary services, and addressing emerging client needs.
In conclusion, while transitioning to a subscription-based model presents challenges, it also offers significant opportunities for service design businesses. By focusing on ongoing value creation, strategic pricing, and adaptability, designers can create sustainable, client-centric business models that align with evolving market demands.
Successful implementation will require careful planning, clear communication with clients, and a willingness to iterate and refine the offering over time. As the design industry continues to evolve, subscription-based models may become an increasingly important way for designers to build stable, profitable businesses while delivering consistent value to their clients.
In-depth Summary:
Subscription-Based Service Design: Transforming Graphic Design Business Models
I. Introduction
Chris Do, the speaker in this transcript, addresses the challenge of transitioning from traditional project-based graphic design services to a subscription-based model. He emphasizes the importance of this shift, framing it as a crucial step for service design professionals to secure their future in the industry.
The main themes presented include:
1. The benefits of subscription-based models for both designers and clients
2. The challenges of implementing such models, particularly for traditional graphic designers
3. The need for creative problem-solving to develop valuable subscription offerings
Chris argues that dedicating 5-10% of one's efforts to designing a new business model could significantly impact a designer's career trajectory over the next decade. He positions subscription-based models as a solution to common pain points in the industry, such as the constant struggle to acquire new clients and the stress associated with project-based work.
II. Key Terminology and Concepts
1. **Subscription-based model**:
Definition: A business model where clients pay a recurring fee for ongoing services.
Chris presents this as an alternative to traditional project-based work in graphic design. He argues that this model can provide more stability for designers and consistent value for clients. "I really do believe that subscription-based models is really beneficial for you and your clients for a number of different reasons."
2. **Service design**:
Definition: The practice of planning and organizing people, infrastructure, communication, and material components of a service to improve its quality and the interaction between the service provider and customers.
Chris uses this term to encompass a broader range of design services beyond traditional graphic design. He encourages graphic designers to think of themselves as service design professionals to open up new possibilities for subscription models.
3. **K-P-Is (Key Performance Indicators)**:
Definition: Measurable values that demonstrate how effectively a company is achieving key business objectives.
Chris mentions KPIs in the context of designing subscription services: "where your clients feel they get... all the results that they want the impact. The K-p-i's that matter to them at a price that they would consider a steal."
4. **Unlimited design**:
Definition: A service model where clients pay a fixed fee for unrestricted access to design services within a given time frame.
This concept is introduced by Pik as a strategy she attempted: "A subscription 5,000, and then unlimited design, like design support Monthly."
III. Rhetorical Analysis
Chris Do employs several rhetorical strategies to persuade his audience:
1. **Appeal to long-term thinking**: Chris encourages designers to allocate mental resources to future-proofing their businesses. "I strongly encourage you to put some percentage of your brain power, maybe 5 to 10% designing your next business model that's going to carry you into the next 10 plus years."
2. **Problem-solution structure**: He first outlines the problems with traditional project-based work (stress, constant client acquisition) before presenting subscription models as a solution.
3. **Quantification**: Chris uses specific numbers to make his arguments more concrete and achievable. For example, "if you can find, I think, 8 to 20 clients on an annual basis... You can hit all of your financial goals."
4. **Contrast**: He contrasts the current model's focus on finding new clients with the proposed model's focus on doing great work, emphasizing the quality-of-life improvement for designers.
5. **Interactive approach**: By engaging directly with Pik and using her experience as a case study, Chris makes the discussion more relatable and practical for his audience.
6. **Repetition**: Chris repeatedly emphasizes the benefits of subscription models throughout the transcript, reinforcing his main argument.
The effectiveness of these strategies likely varies depending on the audience. For experienced designers frustrated with traditional models, the appeal to long-term thinking and the problem-solution structure may be particularly compelling. For newer designers, the quantification and concrete examples might be more persuasive.
IV. Key Insights and Practical Applications
1. **Shift in focus from client acquisition to quality work**
Chris argues that subscription models allow designers to redirect energy from constantly finding new clients to producing high-quality work. "You can hit all of your financial goals while focusing more of your energy and your creativity towards doing great work as opposed to finding new clients."
This insight suggests a potential transformation in the day-to-day operations of design businesses. Designers could allocate more time to skill development, creative exploration, and client satisfaction, potentially leading to higher quality outputs and increased client retention.
2. **Creating demand through limited supply**
Chris introduces the concept of creating a waitlist for services: "It's just about making sure people are aware of what you're doing, so that they that you're able to create more demand than their supply of you. So they get on a wait list, and then when a new opening happens, then they can jump in."
This approach could be implemented by:
- Regularly showcasing high-quality work on social media platforms
- Sharing client success stories and testimonials
- Creating content that demonstrates the ongoing value of the subscription service
- Limiting the number of subscription slots available at any given time
3. **Gradual price increases**
Chris suggests the possibility of slowly increasing subscription rates over time. This strategy could be applied by:
- Implementing annual rate reviews
- Communicating added value to clients before price increases
- Grandfathering existing clients at lower rates while charging new clients higher rates
- Offering tiered subscription levels with different price points and service offerings
4. **Tailoring subscription models to different design disciplines**
While Chris acknowledges that some design services (like web design) are more naturally suited to subscription models, he encourages graphic designers to think creatively about how to adapt their services. This insight could be applied by:
- Analyzing client needs for ongoing design support (e.g., social media graphics, marketing materials)
- Identifying repetitive design tasks that could be bundled into a subscription
- Exploring complementary services that could add value to a design subscription (e.g., brand strategy sessions, design education for the client's team)
5. **Balancing client value and business sustainability**
Chris emphasizes the importance of designing a service "where your clients feel they get... all the results that they want the impact. The K-p-i's that matter to them at a price that they would consider a steal." Simultaneously, he stresses that the model should be "sustainable for you."
This balance could be achieved by:
- Conducting thorough research on client needs and pain points
- Clearly defining the scope of services included in the subscription
- Implementing systems and processes to efficiently deliver recurring services
- Regularly reviewing and optimizing the service offering to maintain profitability
V. Examples, Analogies, or Case Studies
1. **Website design as an ideal subscription service**
Chris uses website design as an example of a service well-suited to subscription models: "websites seem like the ideal thing because websites are not static. There's compliance, there's security patches. There's updates, there's content. There's design changes, there's content changes all the time."
This example illustrates key characteristics of an ideal subscription service:
- Ongoing need for updates and maintenance
- Regular changes in content and design
- Technical aspects that require expert knowledge
- Continuous value delivery to the client
2. **Pik's experience with unlimited design subscriptions**
Pik shares her attempt at implementing a subscription model: "I tried to do unlimited, I tried to do... A subscription 5,000, and then unlimited design, like design support Monthly."
This case study highlights potential pitfalls in subscription model implementation:
- The challenge of defining "unlimited" in a sustainable way
- The need to carefully price services to ensure profitability
- The importance of setting clear boundaries and expectations with clients
3. **Branding and identity design as a foundation for ongoing services**
Pik describes her current service offering: "I do branding and identity design. But then, usually afterward, I help... like my client, do all kinds of marketing materials right from building the template social media website."
This example suggests a potential structure for a graphic design subscription:
- Initial branding project as an entry point
- Ongoing support for various marketing materials
- Regular updates to brand assets and templates
- Social media content creation and management
By analyzing these examples, we can identify common elements of successful subscription models in design:
- Recurring client needs
- Opportunities for ongoing optimization and improvement
- A mix of creative and technical services
- Clear value proposition for the client
VI. Strategies for Implementation
Based on the transcript, we can extract several strategies for implementing a subscription-based model in a service design business:
1. **Start with a transitional approach**
Chris suggests beginning with a hybrid model: "Maybe you start off with a regular project, and then you transition them into some kind of retainer or subscription-based model." This strategy allows for:
- Building trust with clients through traditional project work
- Demonstrating ongoing value before proposing a subscription
- Gradual adaptation for both the designer and the client
2. **Identify recurring design needs**
Chris emphasizes the importance of finding "consistent work that you can do on a recurring basis." To implement this:
- Analyze past projects for tasks that clients frequently request
- Survey existing clients about their ongoing design needs
- Look for patterns in client feedback and pain points
3. **Create tiered subscription options**
While not explicitly mentioned, this strategy is implied in the discussion about pricing and service offerings. Implementation could involve:
- Developing different service levels (e.g., basic, standard, premium)
- Clearly defining what's included in each tier
- Allowing clients to upgrade or downgrade as needed
4. **Establish clear boundaries**
Chris hints at the importance of setting limits: "You can hit all of your financial goals while focusing more of your energy and your creativity towards doing great work." To achieve this:
- Define specific deliverables for each subscription tier
- Set clear turnaround times for different types of requests
- Establish a process for handling out-of-scope work
5. **Focus on client education**
Chris mentions the need to make clients aware of the value: "It's just about making sure people are aware of what you're doing." Implement this by:
- Creating case studies showcasing the benefits of ongoing design support
- Developing educational content about the importance of consistent branding
- Offering workshops or webinars on design-related topics
6. **Implement a waitlist system**
Chris suggests creating demand through limited supply: "So they get on a wait list, and then when a new opening happens, then they can jump in." To execute this:
- Set a cap on the number of active subscriptions
- Create a simple sign-up process for the waitlist
- Regularly communicate with waitlisted prospects to maintain interest
7. **Continuously refine the offering**
While not explicitly stated, the need for ongoing improvement is implied. Implement this by:
- Regularly soliciting feedback from subscription clients
- Analyzing which services are most frequently used
- Staying updated on industry trends to add relevant new services
VII. Challenges and Limitations
1. **Resistance to change**
Chris acknowledges that shifting to a subscription model can be challenging: "I heard you say that it's going to be tough to do this as a graphic designer." Potential obstacles include:
- Client reluctance to commit to ongoing fees
- Designer hesitation to change established business practices
- Difficulty in quantifying the value of ongoing design services
2. **Defining scope and managing expectations**
Pik's experience with "unlimited design" highlights the challenge of setting boundaries. Issues may include:
- Clients expecting more than what's feasible within the subscription fee
- Difficulty in estimating time and resources needed for ongoing work
- Balancing client demands with sustainable business practices
3. **Pricing strategy**
Finding the right price point is crucial. Challenges might include:
- Setting a fee that's attractive to clients but still profitable
- Accounting for potential scope creep in ongoing projects
- Determining how to handle price increases over time
4. **Consistent value delivery**
Maintaining high-quality output over an extended period can be challenging. Potential issues:
- Avoiding creative burnout from repetitive tasks
- Ensuring that long-term clients continue to see fresh value
- Managing workload across multiple ongoing subscriptions
5. **Cash flow management**
While not directly addressed in the transcript, shifting to a subscription model can impact cash flow. Considerations include:
- Adjusting to smaller, regular payments instead of larger project fees
- Managing resources for ongoing work versus one-time projects
- Handling potential client churn and its impact on revenue
6. **Service standardization**
Creating a scalable subscription model may require standardizing services, which can be challenging in creative fields. Issues might include:
- Balancing standardization with creative customization
- Developing processes that can be consistently applied across clients
- Training team members to deliver consistent quality in a subscription model
By acknowledging and preparing for these challenges, service design professionals can develop more robust and successful subscription-based business models.
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Zoom Whiteboard Link:
https://zoom.us/wb/doc/SrTB3WGzR02qaBa-xvj_3Q/p/73460861960192
Prompts:
