Strategic thinking and management consultancy are increasingly falling into the remit of a designer’s brief. But, while most designers dream of charging the same as management consultants, the reality is in stark contrast.
Most clients would view management consultants, which charge between 800 and 2000-plus per day, in an entirely different league to design-led groups. As Wright illustrates: “A print shop would get a fraction of what we’re paid, we’re paid a fraction of what the likes of McKinsey is paid, and, in turn, McKinsey is paid a fraction of what Goldman Sachs would be paid.”
When evaluating what to charge, Wright says “if a client sees you as a design group you’re automatically in a different price bracket to a management consultancy. Clients’ fee expectations are different and are not to do with the work but who they ask.”
To get over this obstacle, Wolff Olins sells itself as a “brand consultancy”, and then gets down to the serious business of negotiating. “We have a reputation for being expensive, but our internal fee-rates haven’t changed for eight years,” Wright says.
Peter Matthews, managing director of Nucleus, agrees being perceived as a straightforward design consultancy can limit a group’s earning potential. “If you’re positioned simply as a design consultancy there is a ceiling to fees, because the majority of design groups provide just design services. Consultancies providing strategic advice and added value have a higher fee-ceiling,” he says. Which is why Nucleus has developed an in-house management consultancy team. “We’ve spent several years moving ourselves into this part of the market. Design fees have generally been under enormous pressure. They haven’t gone up in years and everyone questions the last penny. Yet, if you’re really delivering business benefits and ideas which are properly presented, there is far less resistance to higher fees. Clients are happy to pay if you deliver value,” says Matthews.
He stresses Nucleus’s offer is strengthened because it combines a creative business with a management consultancy “backbone”. Matthews adds clients see design as lower value to certain other disciplines. “Over the past five years we’ve transformed our business from being very much a design consultancy into a true consultancy. As soon as you mention design, it’s low value, middle management. Our clients are usually board directors. We give good value for money. Clients won’t retain you if you don’t.”
David Rivett, managing director at Design Bridge, believes clients are starting to appreciate the “depth” that strategic design groups offer and, in time, will pay fee-levels to reflect that. But he doubts design-led groups will ever be viewed on a par with management consultants.
“There are certain fee-structures that seem quite inequitable. We may be delivering management consultancy, but we’re not management consultants and you have to keep in mind that you are the organisation you are. As long as we’re design-led, we’ll be seen as different to management consultants, and in the end it’s the mountain we have to face,” he says.