The design evolution

Design firms have always felt the tug to move into new business directions, to evolve into something beyond their core competencies, and these days that generally means getting into branding.
Whether the motivation comes from clients, a simple desire to grow a business, or merely because branding is the latest industry buzzword, simply adding 'and branding' to their shingles doesn't make them branding firms.

Design firms have always felt the tug to move into new business directions, to evolve into something beyond their core competencies, and these days that generally means getting into branding.

Whether the motivation comes from clients, a simple desire to grow a business, or merely because branding is the latest industry buzzword, simply adding ‘and branding’ to their shingles doesn’t make them branding firms.

Before executives can make the move successfully, they must first sit back and ask some difficult questions, and the most basic question is often the one that never gets asked: What is branding?

But even once that’s understood, other questions clamour for attention, such as whether the expansion should be done at all, what competition will be encountered in the new territory, how to staff up for the change, whether to expand as a single company or spin off sister operations and how to keep from going broke in the process.

Thomas Pigeon, CEO of Oakville, Ont.-based Pigeon Branding + Design, says all industries periodically go through a metamorphosis and that design firms are now going through the process of rediscovering and reinventing themselves.

‘The challenge is not pretending we’re doing things beyond what is really our core capability. We should not pretend to be the advertising agency or try to be the promotional consultant but instead must set the ‘spiritual’ parameters, how a brand should breathe and live to take the colour of the equity into a visual language. Simply lay out that palette so that all brand users – whether suppliers or clients – really get what those equity components are and simply shepherd them intelligently through life.’

What is branding?

To understand the successes, failures and limitations of design companies that do branding work, says Bruce Philp, partner at Garneau Würstlin Philp Brand Engineering of Toronto, there first has to be an understanding of what a brand is.

‘I think at the end of the day a brand is a kind of cultural artifact. A logo – which is the door through which design companies have come to branding – is the flag of a brand, but it isn’t the brand any more than the stars and stripes is America.’

Jeannette Hanna, director of strategic communications at Toronto-based branding and design firm Spencer Francey Peters, says there is a lot of ‘consultant speak’ around branding that seems to make it all very complicated, but there is a simpler way.

‘Our definition is really what explains an organization first of all to itself, then to its customers and stakeholders. The major questions are: who are you, what do you do, why should anybody care?

‘Those are actually much harder questions to answer than people realize. Who they are is not always clear because they’ve changed and evolved. If you’ve been selling gas for years and suddenly you’re in the energy market, it’s not always an easy question to answer.’

Hanna says why anyone should care ‘is the real kicker,’ often requiring some difficult soul searching. It means sitting down and discussing the ‘why’ of a company, its place in society and what its ultimate goals are.

‘It’s something every organization needs desperately, a common understanding of why we’re here. The message to employees, partners, distributors, distributor channels, investors – the brand message – is more or equally important as the message for consumers.’

Should you expand at all?

John Marovino, president and CEO of Marovino Design Group in Toronto, says there’s nothing wrong with sticking to your core competency and remaining a design firm. His company began as a design firm and remains a design firm, offering branding and other communication services through separate companies.

He says that full-fledged branding exercises are really rare, so design firms are still very viable members of the branding teams. No one company can really cover the whole territory says Marovino, so it’s best to pick specialties.

Marovino Design’s expertise, he says, is in expressing the brand in visual terms.

‘You don’t need a phalanx of brand experts every time you have a design. Four out of five projects we do are driven more by available budgets. Branding seems to be a big issue at the beginning but when you actually get down in the trenches, unfortunately there is the hard fact of day-to-day business – I only have a limited budget, what can you do with this? Suddenly the branding issue vanishes in deference to cost.’

If a design firm wishes to branch out, though, Sabaa Quao says there’s always room for new entrants in a market – it’s just a question of aggressively going out and winning business.

Quao is president of X Unlimited Corporation of Toronto, a company that opened as a design firm in 1993. It has expanded its branding capabilities since then and now has about a 50-50 split between its branding and design business.

X Unlimited also has expanded into the U.S. market, although it has not opened an office there, and now gets 25% to 30% of its revenue from south of the border.

‘Our expansion is really based on growing our business in other geographic areas. One of our principals is going to be working out of the U.K. over the next year,’ says Quao.

Staffing

Becoming a branding company requires expertise beyond design. Although many seasoned designers acquire strategic skills through experience, bringing agency account managers, as well as marketers and brand managers from the client side into the fold will add to branding capabilities.

Chris Plewes, director of design strategy for Toronto’s Design Partners, says marketers’ experience with different communication channels, working with packaging, POP, traditional advertising and retail give them the understanding of how these disciplines work together to create a holistic brand idea.

‘We recognized that to be able to build a brand, you have to be able to walk and talk in the consumer and corporate branding worlds because brands are quite often living outside the four walls of the retail environment.’

Peter Francey, president of Spencer Francey Peters, says there wasn’t one point in time when the firm made a conscious effort to move into branding, but about six years ago the company started to formalize some of its processes to better help its clients.

‘What we’ve tried to do all along is to be as perceptive as we can about what clients are really needing and looking for. About that time, we began to feel a lot of our clients, most of whom were business-to-business, were really looking for ways of expressing themselves in a comprehensive way.

‘Not just a logo on the front lawn, but how do we make this into a real brand that we live and breathe? We were looking at ways we could change our approach to things. We looked at spending more time up front talking to clients and that really evolved into a process for us and we recruited people around that.’

Francey says staffing up meant bringing thinkers in from the client and agency sides as well as those from other disciplines with some ‘real world’ experience in sectors such as financial or new media start-ups with experience that was credible to clients.

Such skills, adds Bruce Philp, include working with quantitative research and being able to read an ACNielsen report and effectively interpret it.

‘I think a brand is a marketing tool,’ says Philp, ‘therefore the way it’s built and nurtured has to integrate with the process of marketing. Design companies in the main, don’t get close enough to the centre [of the process] for them to have the skills.’

Philp also says there’s less of a culture of accountability in design than there is in branding. ‘If a brand is created from the logo outwards, the designer is not going to be held to account for the specific contributions made to the profit margin. Designers have less experience in dealing with the stimulus response part of the job and are often less likely to be sensitive to it.’

Restructuring

There are a few schools of thought on how to restructure a design firm to offer branding services. Some companies have brought new disciplines into their current firms while others have established separate divisions or companies.

SFP’s Hanna believes all of the disciplines must be integrated into one company. She says the design function of translating and interpreting a strategy is really critical because a brand doesn’t really breathe until that has happened. The design and strategic disciplines must work closely together for this to happen.

‘I think it’s important to have [those disciplines and cultures] native to an organization and not just hired guns. That’s what a lot of firms do and it’s just a veneer that sits on top.’

X Unlimited opened its doors in 1993. In 1997, it went through a major expansion on the strategic side of its business to put more emphasis on the capabilities it already had in-house.

Quao says right from the beginning his firm’s senior level staff had strategic strength in their business, marketing, psychology and research backgrounds. What the company wasn’t doing was presenting the strategic expertise on equal footing with its design capabilities.

‘There wasn’t any huge investment,’ says Quao, ‘we firmed up our methodologies and process and how we run our projects. It was also a matter of rounding out our strategic team with people with mass communications, sociology, finance, economics, marketing and strategic strengths.’

Meanwhile, Marovino set up two new companies – Brandtrust and JAM Interactive – to complement the design services offered by Marovino Design Group.

While he could have integrated everything into one operation, Marovino says each company specializes in a very focused discipline and not every client wants the full range of services. As with many branding firms, much of the work done by Brandtrust doesn’t ever result in design.

Clients looking for full service would start with Brandtrust to lay out the corporate strategy, vision and organization before moving on to Marovino, which translates all the brand attributes into visual vehicles. JAM Interactive then creates support campaigns – promotions, advertising, retail support programs and public relations – around the brand.

Repositioning and attracting new clients

A company’s track record is generally what helps it win new business. If it has expanded into new areas or added new capabilities, this sales job is not so simple.

SFP’s Francey says the best sales tools are the case studies a firm can place in front of potential clients.

‘You have to try to win those first few [branding] projects on some blind faith, I guess. It’s also a matter of having the talent onboard that you can promote in the marketplace.’

Starting with existing clients is one way to introduce the repositioned company to the marketplace.

This is how John Marovino says he first presented Brandtrust and JAM Interactive.

‘We have such good relationships and trust with existing clients, it wasn’t as difficult to convince them of the quality of the new services,’ he says.

‘It’s about client satisfaction, getting their trust and developing that relationship – and then growth is primarily word of mouth.’

For its part, X Unlimited used some high-profile new brand launches to help grow its business in Canada and the U.S.

‘We’ve been responsible for the launch of the Toronto Raptors, Playdium and we did the design and brand positioning when the CN Tower was renovated,’ says Quao. ‘There’s a certain profile with these kinds of projects and as the whole tech economy boomed and lots of new companies and brands were launching, we had some referrals that landed us one or two projects – and from that point on, the referrals kept coming.’

When introducing the company to new business prospects, Quao says the company’s strategic expertise and design portfolio are given equal time so clients understand there is an integration of these two skills right from the start of the relationship.

Establishing a reputation for branding expertise also brings the firm much closer to the client’s business, says Quao.

‘If you’re brought in only for design, you’re usually brought in late in the project. Because we’ve done so many launches of new brands, we’re often working with the client very early on in the process.’

Staying afloat during expansion

Bringing in the strategic and marketing disciplines needed to expand from design into branding can be costly. Not only will there be more salaries to pay but there will have to be investment into processes such as research used to develop brand strategies.

Companies can go it alone, enter a partnership, establish a strategic alliance or merge with another firm for more painless expansion.

Marovino expanded through partnerships and didn’t increase his overhead to bring new services into his company. He has equity in both Brandtrust and JAM Interactive along with the heads of each of those companies.

For Design Partners of Toronto, it was a question of merging with another design firm, Plewes Bertouche Design Group, about two years ago. While not a branding firm, Plewes Bertouche had more internal branding capabilities than Design Partners. The amalgamated firm then added more staff with marketing and strategic expertise.