10 WAYS TO RAISE ROI
One of the key questions that has been on our minds, is how do we measure the value of design? If someone says the “redesign was a success”, what does that mean really?
Being able to measure the ROI of design is important because:
1. Business needs to know the real value of investments in design.
2. Design managers and leaders are often asked to provide evidence of success.
3. Design is often utilized to meet business objectives and designers should know the impact of their designs on those objectives.
1. Purchase influence
They say, “Money buys, but emotions sell.” This is especially true with emotional effect of design.
In the ‘Experience Economy’ we live in, great design allows companies to charge A LOT more for products and services. So design can be measured in terms of “purchase influence” and emotional impact.
We live in a time where Starbucks which can charge 4–5X per coffee cup compared to your local mom and pop shop’s coffee. Or the Mini-Cooper, whose parts cost the same as similar cars in size, can charge a premium. Both Starbucks and Mini-Cooper are doing well in effecting bottom line sales.
Yet how can we measure that? We must be “creative.”
Consider this quote — which refers to how to calculate purchase influence in packaging design by simply placing two products side by side in a grocery store and seeing which product sells.
2. Enable strategy
There are too many examples here: Apple, Dyson, Amazon, Google — practically any company that has utilized design to create products and services that have differentiated the company from others in the market.
Design can also enable business strategy. British Airways set out to increase long-haul international flights. After extensive studies — designers came up with the first seat that could recline completely flat. This increased sales and profitability considerably for British Airways.
3. Build brand image and corporate reputation
Any company that is updating the look of their website and their messaging is playing with their brand. Design has the ability to impact brand awareness and brand loyalty. In similar stride, design awards help to increase reputation and brand image.
4. Improve time to market and development process
Agile and Lean methodologies — are geared towards designing with speed. This allows a team to focus on the right things, learn, and build faster.
Design standards and guidelines have been helpful to reduce time to create products (and in return, reduce costs).
Shared design systems is helping designers and developers move faster in developing product and services.
5. Design ROI/ cost savings
There are numerous studies conducted that show that companies that are design-driven (using design as a key strategic advantage) were founded to be stronger on all financial measures (managerial and statistical perspectives).
6. Enable product and service innovation
What’s it like when you buy an iPhone? You go to the store, the experience is wonderful from beginning to end.
Companies that enhance the customer experience at every touch point, are using design to enable product and service innovation.
Open Road Toyota worked with Karo Design in Canada to increase their sales by 25%. How? They designer and redesigned every touch point of the customer experience. The result: they were ranked #1 Toyota car dealership in all of Canada.
7. Increase customer satisfaction / develop communities of customers
Design can also be used to increase customer satisfaction and develop communities of customers (a lot of online marketing campaigns are aimed at increasing engagement and fan interaction). Brand perception, loyalty and familiarity are affected by the design.
Qualitative measurements (user interviews, focus groups, ethnographic studies, etc.) are considered “intangibles” of customer satisfaction, but are being embraced in addition to quantitative metrics.
8. Design patents and trademarks / create IP
The value of design is also related to how many patents the design can get for the company. Some company’s patents are extremely valuable (Apple, ahem) and add to the company’s valuation.
9. Improve usability
Design adjustments can be made to increase performance and usability of products and services — all which is measurable. More time spent on the site, engagement by users, lead generation — are all able to be impacted by the design and are additional metrics for measuring design effectiveness.
For example, for every user who has difficulty completing checkout, a company can lose a lot of money.
10. Improve sustainability
Design can also be measured by it’s impact on the environment.
Take for example how on airplanes, drinks are typically served in small cups. While bigger coups could be provided, airlines strategically use design to
1. limit environmental wastage
2. prevent customers from going to the bathroom all the time and creating aisle traffic
3. limit expenses on drinks.
Pretty smart no?