More than empty words

As the first flush of enthusiasm for offering strategic branding services dies down, Lynda Relph-Knight looks at its financial potential

It has long been said by pundits in design that to really be successful, a consultancy needs to identify and promote a point of difference in its work or the way it operates, which sets it apart from its rivals in what has become a very crowded marketplace.

For many, that point of difference has been to offer strategic thinking as well as pure design. The trend became so rife among branding groups a few years ago that you couldn’t move for ‘strategic branding consultants’ as the strapline was added to many a consultancy name. Now though, that tendency appears to have settled down – perhaps because most of the bigger clients saw through what in many cases amounted to hollow claims.

Many of those that continued in earnest, though, with genuine ‘thinking’ as part of the deal, are now able to quantify its value to their business. And it is not just branding groups that offer strategy. Product design specialists such as Seymour Powell with its Foresight unit and retail design groups have joined the fray.

It is not just that offering strategy as a service has helped them to climb the client’s ladder from dealing with, say, a junior brand manager to possibly dealing at board level. In some cases, the fees can be measured as a separate income stream from design.

As part of our 2007 Top 100 trawl, which charts the financial performance of largely independent UK design consultancies, we asked participants to identify fee-income derived from strategic work rather than design. While in the first year of asking there is nothing to compare, we now have a starting point and some interesting findings.

While only 36 consultancies were able to list fees for strategy as a separate entity, nine of those earned more than £1m last year through that work in the UK.

Not surprisingly, a lot of these are branding groups, for which strategy or ‘positioning’ is an integral part of most projects. Vivid Brand, for example, makes a respectable £1.28m in strategic fees, and Leeds, Edinburgh, London and Melbourne branding group Elmwood is just a fraction behind it. Award-winning packaging specialist Pearlfisher creeps in towards the bottom of the chart with £595 000 in UK earnings for strategic work, supplemented by a further £115 000 earned abroad.

But branding is not the whole story. Nucleus, which has been investing heavily in a number of strategic technology businesses recently, tops the charts for strategic earnings. Its total, fees for strategy were an impressive £4.8m last year, including £800 000 from overseas work.

Product design consultancy Seymour Powell meanwhile reports total strategic earnings of £958 000, of which £401 000 is derived overseas.

Another star is Start Creative, the London group that currently is expanding its team and its reach. Its strategic earnings of £2.15m in the UK amount to just under a quarter of its design fee-income and have helped to lift its status in the eyes of clients such as the Virgin group.

Very few consultancies report fees for strategic work overseas – only 13, in fact. But of those, Radley Yeldar – best known for annual reports – cited formidable earnings of £8.8m for strategic work abroad, compared with £300 000 for similar work in the UK. This is on a par with design fee-income claimed by most of the top five groups in the Top 100 listing.

Interiors group Allen International claims £2.64m in fees for strategic work abroad and none in the UK. Sheridan meanwhile boosts its £3.32m in UK strategic earnings with £1.2m in fees from abroad.

This chart offers only a taster of strategic earnings. For many groups, the income is buried in the fees for the entire project and submitted to us as ‘design fees’. But it goes to show what a difference strategy can make to the bottom line.

If more groups separated it out, enabling them to assess its value, they might make more of that aspect of their work – and win greater respect from clients.

The Top 100 Consultancy Survey will be published as a supplement to Design Week on 31 May

Nucleus: £4 060 000
Springetts: £3 915 000
Sheridan: £3 316 000 
Start Creative: £2 150 000
Oakwood Design Consultants: £1 500 000
Vivid Brand: £1 275 000
The Team: £1 182 000
Rufus Leonard: £1 076 000
Pearlfisher: £595 000 
Good Creative: £570 000

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