VANCOUVER—Marketing and design industry consultant David C. Baker says the main pitfall creative firms run into that prevents them from maximizing profits is the “8/7/10 problem.”

Now that might not mean something to everyone in the industry, but luckily Baker explained it during a session in Vancouver last week as part of the GDC/BC’s Business of Design Series.


Here’s how he laid it out: Imagine a scale of 1 to 10, where 10 is the best, and 1 is the worst. Eight is the rating a firm would give a potential project at which they'll take it on, but aren't super excited about it. Seven is what the client is willing to pay for said project, and 10 is the level of quality that this client receives from the firm.

"Can the client notice the difference between 8 quality work and 10? No. So why do designers do it?” asked Baker. The responses from the gallery included pride, building portfolios, and passion for the work. However, Baker argues that over-servicing is the same as discounting.

How is this prevented? Baker says in positioning. If you are an expert in one specific thing, you can charge more, and people will come to you for your expertise, he said.

Baker offered some simple tips for how he thinks a creative firm should be run:

• You should have eight-15 clients on your roster at all times.
• Each new client should be replacing one on your roster, not simply adding (positioning is about saying no to jobs that aren't in your core area of expertise).
• The purpose of marketing is to have enough opportunities to say no.
• Ideally, you become your client's trusted advisor: they come to you for advice, and you give it, whether or not you'll get a job out of it. That builds trust and the work will come.
• Young people like variety in their work, older people like to do work that utilizes their expertise – the changeover is at 32.
• Every creative firm has a process that they promote as a reason to hire them. It's not a unique selling feature unless it's really different or it's hard to learn.
• 60% of your time should be billable.
• The only control you have in a client relationship is to withhold your expertise.
• The smaller your firm is, the more specialized you need to be.
• All a potential client cares about is that you can solve the problem.

Baker says if firms position themselves well, this will lead to better knowledge of their target market, which will lead to higher confidence, which will lead to higher fees, and ultimately lead to more enjoyment in the work.