Don’t Fear The Competition.
I hear a lot of UX folks worry about competition.
They feel like they will be driven out of the market by cheaper options or expensive, larger firms.
Both the cheap and the large offer a broad portfolio of services, which might make you think you need to do the same. Well, not quite.
Let’s take a look at both scenarios:
Cheap And Low Cost
The cheaper options tend to hire designers from regions with lower costs of living.
The results of following this strategy are
- The razor-thin margins that come as a result of competing for price drive them out of business.
- They have to make do with the cheaper talent, which tends to be more junior and less experienced.
- They seek quantity instead of quality by providing a wide range of undifferentiated services, e.g., development, logo design, branding, for small and large companies in all types of industries.
Who’s An Ideal Client For These Agencies?
A client that sees UX as a commodity service. They can’t tell the difference between a basic template in Figma file and a carefully, well-researched design solution that’s tailored to their business.
These clients tend to have low budgets.
Can you run a successful agency following this path? Sure. Keeping in mind lower margins means having to sell larger quantities, which translates into more operational complexity.
The cheap option can’t specialize because their business model relies on quantity.
Large And Expensive
The larger a firm is, the greater its gravitational pull. Big UX firms don’t need to invest nearly as much in marketing as mid-sized firms. They are famous. Therefore, they attract other large firms to work with them.
But here’s the thing, larger firms don’t necessarily produce better work.
Like all things in life, the law of diminishing returns applies to design. Beyond a certain threshold –probably in the high five to low six figures– paying twice as much for UX services doesn’t get you twice the quality.
When you hire a large UX firm, rather than paying for quality, you’re paying for their overhead. Flashy offices in hip neighborhoods, an army of project and account managers, top of the line MacBook Pros, their own office barista, and, of course, ping pong tables.
These are all nice things, but do they produce better UX work? Nope. Absolutely not.
The Large UX firm doesn’t need to specialize because they have the capital to hire all sorts of people and offer all kinds of services.
Who’s An Ideal Client For These Large Firms?
Huge companies. And they hire them because they perceive them as the least risky option money can buy. After all, you don’t survive for a long time in the tech industry by providing low quality and screwing people.
The way to compete with these two types of UX companies is by specializing.
Don’t Compete, Specialize
Unlike the big guys, you probably don’t have the resources to hire dozens of UX designers, copywriters, logo designers, art directors, developers, and the occasional barista.
To stand out, you need to specialize.
What you can offer is a team of committed and talented UX specialists your client gets to work with directly. You get to provide a boutique, more intimate client experience that allows for better communication and top of the line quality work at a great price for both parties.
Thousands of companies with particular needs are searching for great UX design and don’t want to work with giant firms. They have an attractive budget and are willing to invest in specialists.
You don’t need to offer a bunch of undifferentiated services.
In fact, the more you focus on one thing, the easier it gets to attract great clients.
Are you a UX agency founder who needs help growing your business? I offer 1-on-1, actionable coaching to help you hit your first million in revenue. Book a free session here https://calendly.com/edorozco/meet