With the current exchange rate of 90p to the euro, British design has never been so affordable to Continental clients, but how are consultancies making the most of the opportunities? The consensus is it’s not by treating it as a smash and grab scenario.
‘Where previously UK groups have been seen as costly, they are now on a par with local consultancies, which is making a big difference,’ says Design Embassy founder and UK Trade & Investment design industry adviser Christine Losecaat.
JHP Design joint manager Steve Collis tells the story of a ‘large’ project in Germany in which the consultancy recently pitched against two local design groups and won. To the German client, JHP is 30 per cent cheaper than it would have been two years ago. However, Collis is keen to point out that the influence of money only goes so far.
‘We did not get on to that pitch list of three because of the exchange rate,’ he says. ‘We were already in a favoured position because of our credentials. However, then being able to quote a fee that was that much less than it would have been two years ago tipped the balance.’ Essentially, says Collis, price is swaying European clients to buy British, ‘all other things being equal’.
So are London consultancies universally held up in Europe as the best, with affordability now the deciding factor?
Not according to Collis. He believes that London is just one of the beneficiaries of new international design-buying patterns. ‘Corporate clients feel that they can shop the world nowadays,’ he says. ‘They’ve become aware that the cost of buying design from beyond their shores isn’t much greater than buying it from next door, plus there is the added benefit that they can shop around to tailor the design supplier to their precise needs.’ He names JHP’s major international design competitors as being largely from China, New York and Milan. Losecaat believes that our main European competitors are Germany, France and Italy.
However, Blue Marlin group managing director and chief executive Andrew Eyles maintains that, particularly for fast-moving consumer goods design, London is ‘the recognised capital of design’.
Eyles’ rationale for the UK’s pre-eminence in packaging and product design is based on a theory that the steep decline in the UK’s manufacturing base means that many product and packaging designers have a highly sophisticated and technical industrial design background. Whereas in much of mainland Europe, ‘the bulk of industrial design talent goes into the car, furniture and aviation industries’, he says.
Eyles, Collis and Losecaat all warn that consultancies should understand that although big regional and multinational companies are picking up UK designers more, the same is not true for smaller national clients. ‘Too many UK consultancies are guilty of chasing work across Europe because it’s sexy, but clients [often] have no intention of hiring you and will stay loyal to their local suppliers, using you for a beauty parade and for free ideas,’ says Eyles.
Blue Marlin had its fingers burnt trying to crack the French market a few years ago, says Eyles. Opening an office in Paris, Blue Marlin judged it wise to hire a Frenchman to run it, and proceeded to tout for business.
‘We had about 50 meetings across France and we didn’t win a single piece of work,’ admits Eyles. Blue Marlin was mystified: it had ‘good’ French credentials, having worked on French brands for Reckitt Benckiser – and Eyles’ French staffer was competent. ‘Finally, after a year I discovered that there is a protectionist policy in France, where French designers have a stranglehold on the market and, frankly, they don’t need us,’ says Eyles. ‘Discovering this cost us tens of thousands of pounds.’
Says Losecaat, ‘Some markets have an inherent culture that demands that you buy locally, particularly in Italy, France and the Netherlands. In France, you see this in the film, music and food industries. If a market has a good supply chain to which they are loyal, don’t bother. Why knock on a closed door? Go somewhere where you have a chance.’
Those UK consultancies that are currently receiving a much-needed shot in the arm from European multinationals should not trade on their new affordability, says Losecaat.
‘This is not a card to play. All it does is open doors that perhaps were closed before,’ she warns. ‘People should not be going in saying “we are good value”. Primarily, they are selling their quality, not their value, and it shouldn’t be the other way round.’
Similarly, Losecaat denies that this is a temporary bubble that will burst the moment the pound strengthens, and she recommends that UK groups do not give concessions to European clients.
‘Compromising on price is the wrong thing to do,’ she says. ‘It is okay to charge a premium for UK companies and for us to be seen as a premium product. We are very good at what we do, and people don’t usually have an issue with paying for it. The market will still be there when the pound rises – this is not a bubble.’
Playing it safe in Europe, the Blue Marlin way
- Establish whether there is a genuine opportunity before getting on a plane by asking challenging questions of the client. Blue Marlin sends out a questionnaire before the briefing. ‘If they can’t answer it properly, call them and probe further. You will probably find that they don’t have a launch date planned, there is no budget and they were just window-shopping,’ says Andrew Eyles, Blue Marlin group managing director and chief executive
- At this point, tell the client that you won’t come and see them now, but tag a visit on to a later trip to see someone else
- Apply exactly the same rigour and dedication to your presentation when you do finally visit them as you would for any other client
- Once the client starts showing an interest, perhaps by divulging confidential company information, they are probably taking you seriously