I like some of what has already been said here. However, I would like to try and go one step further on this topic.
Always keep in mind that a website is a marketing medium. It is used to promote some sort of idea, product, brand, information, campaign, etc. Above all else, a website is meant to bring awareness or gain exposure to one of these areas of promotion.
The effectiveness of the website/marketing ratio is very important. As RedStar pointed out, “You shouldn’t just redesign your site for the sake of redesigning it.” When it comes to the point of redesign it should be because the initial or current version of a website either does not properly or clearly promote whatever it is that you are attempting to get your end-user audience to connect with.
Many businesses that are in certain niche markets tend to do an annual redesign and without much reason for doing so, other that to add a completely new wow factor into the mix of competitive market. An example of this would be boutique computer companies. They typically will battle it out each year with a completely new revamped version of their website each and every year. However, this is more due to competitive trending than the actual need to “re-design” their website for the sake of the websites overall effectiveness.
In terms of a design studio or designer portfolio, I would say typically a re-design is in order when the current website is losing it’s appeal to the end-users as a whole. As HugoGiraudel stated, “A redesign can be costly (time consuming, expensive, tiring), so I’d say: when it is required. When you feel like your site doesn’t match your studio/company/skills/way of thinking, it’s time to change.”. This also goes for a majority of websites out there, not just studio or personal portfolios, really.
I agree somewhat with Jarolin about the 6 month/ 1 year strategy, but I would have to side more with RedStar, that by adding functionality and content to your website over time, making tweaks to the website is the best practice to follow.
You always want to do your research and see what the latest trends are. What is the direction that the competitive market is heading, where are they at and which ones are successful at staying ahead of the trend and do your best to do the same. I am not saying, however, to copy cat other websites. This is where many people get lost in researching web trends. Just because someone is using what seems to be the most awesome navigation, due to animation, glamour, and appeal; does not mean however that just because it looks awesome and may even in fact be unique to anything else out there, that it is effective. Even if it may be effective for them, it may not be for you.
The best way to determine the need for a website redesign is by doing your homework. Use some form of analytics tracking and study the behaviors of your end-users. See where the website needs improvements and where it does not. See what content is gaining exposure and what content is irrelevant to the end-users due to bounce rates. Look at your conversion rates. Some websites may look absolutely hideous and have no appeal to them what so ever, in such a case, it’s a no-brainer that a re-design is much required. Some websites may be very unappealing, still gain a ton of exposure, but if re-designed, just imagine the effectiveness of such a website.
Two of your biggest key players are usability and accessibility. If your current navigation hierarchy is working very well for you, don’t go changing it on your end-users. You never want to cause a drastic change in the way in which your end-users are accustomed to finding/locating the content on your website.
With all of this said, there is much to think about and a lot of time, research, planning, etc. that goes into re-designing a website. Make sure that you always treat a website fairly before making any changes. Especially a complete re-design. A re-design is only needed when it’s needed. There are many factors that play a part in “when is it time to make the change”. bi-annually, annually, maybe every 2-3 years. It really just depends on a lot of things.