Doing Business as a Designer: Defining Your Competitive Advantage

Posted on June 17, 2010

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Nathan, a 21 year old graphic designer from San Diego, just graduated with a Bachelors Degree from SDSU. I met Nathan at an artist networking Meetup and we started talking about the world of design. Gradually the conversation started to evolve into business matters.

He was very excited about going into business for himself but was frustrated at the amount of competition that was out there. I said to him “Well that’s the nature of business: competition.”

“But when everyone has low prices and are also providing trendy graphics, how can I compete with that?” Nathan responded.

His concern is a genuine one, as with most graphic designers his age who decide to do their own gig. Heck, I was also offering low prices when I first started out.

I said to Nathan “If everyone else is doing the same thing step back and define your competitive advantage. Do you know how to do that?

“No.”

I went on explaining why a competitive advantage extremely important. To sum it up:

A competitive advantage positions your design services in a way that your competitors may not be competing in, enabling you to make money and stay focused.

This is an essential process in marketing and sales because it communicates to your potential client why your design services are valuable.

Here are some examples in the fast food industry:

  • McDonalds, Jack in the Box, Carls Jr., and Burger King all compete in price. Each of them has their burgers, combo meals, salads, and deserts.
  • Taco Bell has their tacos, burritos, salads, combo meals, and deserts. Their competitive advantage is Mexican food and price.
  • Subway has sub sandwiches. Their competitive advantage is in healthy alternatives.
  • Quiznos has sub sandwiches. Their competitive advantage is in hot sandwiches.

You don’t see McDonalds producing sub sandwiches?

Here are some examples in the car manufacturer industry:

  • BMW, Lexus, Mercedes, Acura, Mini = Mid to High Tier Cars
  • Toyota, Honda, Hyundai, Nissan, Ford, Chevy, Dodge = Entry to Mid Tier Cars
  • Jaguar, Maserati, Tesla = High Tier Cars
  • Lamborghini, Ferrari, Bently = Ultra High End Tier Cars

You don’t see Ferrari making cars to compete with the Honda Civic.

To put this in designer examples:

  • Fast and Quick + Spec Work = Templates + Packaged services (Good, Better, Best), startup companies, some niche markets like real estate
  • Custom Work(Entry Level) = Niche markets, small businesses
  • Custom Work(Mid Level) = Niche markets + Mid size businesses, yearly revenue is over $250,000 USD
  • Custom Work(High Level) = Clients who’s yearly revenue is over $500,000 USD
  • Custom Work (Ultra High Level) = Fortune 500’s, celebrities

When I mention “Niche Markets”, here are some examples:

  • Small business focusing on making custom furniture that charges a premium price
  • Non-profit organizations who help out the physically handicapped
  • Joe’s bread store on Main St. who sells to the general public and local restaurants in the suburbs of San Diego.

Niche markets are very specialized and are very specific.

Nathan got the gist of what a competitive advantage consisted of and started contemplating on what niches he would like to do business in. He realized that competing in price was not only way to do business.

Resources:

KnowledgeCity.com – Concepts of Marketing: Course Length is 1hr. and 17min., costs $4.99, and is taught by professor who’s was an instructor in advertising at the Art Institute of Tampa and was also a director marketing.

Doing Business as a Designer: Getting Started

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