Calculating the ROI of design

A quick guide to justifying design decisions with business metrics.

In a business context, design often serves practical purposes — such as improving user experience, driving sales, or increasing brand recognition. It’s meant to solve business problems and fulfill organizational goals. As such, businesses seek measurable outcomes from design efforts, and we can indeed utilize business-friendly metrics to justify design choices.

Many designers, particularly those in visual fields, often define their work as rooted in creativity and art. While this perspective has undeniable merit (design draws heavily on principles of aesthetics, creative exploration and problem solving — qualities central to the artistic process), it may also lead to challenges in how we engage with our work. Evaluating design primarily for its artistic value can foster rigidity and defensiveness, especially when our work is scrutinized solely on its functionality or business impact.

Art, as a form of self-expression, is evaluated in very different terms than design. The value of art is determined by a mix of factors, including the artist’s reputation, the prominence of their representative agent, the longevity of their market, and the physical attributes of the artwork. The value of art goes beyond its financial worth — it also encompasses the recognition of its historical and cultural importance.

“Salvator Mundi” was purchased in an auction in New Orleans for $1175 by two art dealers. When it was discovered to be an original Leonardo Da Vinci, the new price tag was $450 million.

The value of design, in business context, is measured by its contribution to achieving business goals. This contribution doesn’t always need to have a direct monetary value. Ultimately design helps companies reach their objectives by making products easier to use, attracting and retaining customers, and solving industry problems.

Designers play a key role in communicating and highlighting the value of their work in business terms, particularly to marketing, sales, and engineering teams, where the primary focus is often on delivery and growth.

The only common trait between art and design is their intangible and experiential nature, making it challenging to assess their value. Designers play a key role in communicating and highlighting the value of their work in business terms, particularly to marketing, sales, and engineering teams, where the primary focus is often on delivery and growth. Yet in a 2021 survey, Forrester found that only 17% of design teams actively measure the impact of their work.

There’s a well-known quote from Alan Cooper saying“If your boss is asking you to quantify the value of your work, you need to understand that your work indeed has no value.” While I fully understand the inherent frustration, I disagree with the sentiment of being ‘misunderstood.’ Design thinking is a gradual process, and we cannot expect everyone to recognize its value immediately.

Fortunately, much research in the past decade has focused on defining the value of design. Today, several indexes and frameworks measure design’s impact on business. McKinsey Design Index (MDI) evaluates how well companies integrate design into their strategies and operations. Their 2018 report reveals that companies in the top quartile of the MDI outperform their peers by nearly double in revenue and shareholder returns. Similarly, the Design Management Institute’s Design Value Index (DVI) shows that companies in the DVI have outperformed the S&P 500 by 211% over a 10-year period. Forrester’s studies on design and customer experience reveal that experience-driven businesses gain, on average, 1.8x faster growth in revenue, 1.9x higher growth in brand awareness, and 1.7x more new users.

High-level research data can be impressive, but it often falls short in convincing clients of the specific investment required for individual projects. Clients with engineering or marketing backgrounds, where metrics are deeply ingrained in decision-making, typically expect project-specific forecasts to evaluate the viability of their investment. This presents a common challenge for designers; in addition to the discomfort with external scrutiny, many of us are not yet fluent with the available tools to deliver such projections.

While the ROI of design can be measured in monetary terms, not all business goals are focused on profit. Design practices ultimately aim to enhance the customer experience in alignment with whatever goals the business is aiming for.

As Kate Moran points out, designers tend to equate ROI primarily with direct monetary conversions and often overestimate the level of detail and precision needed for these projections. It’s important to remember that they’re called ‘projections’ because they represent estimates, not certainties. In real-world scenarios, various factors beyond design — such as market fluctuations, operational factors and business decisions — can come into play. Therefore, a design’s ROI projection should focus solely on the effectiveness of the design itself, treating external factors as constants to avoid overcomplicating the analysis.

The value proposition should also be clear on where to focus. In his article, Matthew Godfrey divides design value into two categories as internal and external. Internal value highlights how design enhances the company’s operations and cost-effectiveness by improving development efficiency, reducing friction, and supporting better decision-making. External value focuses on how design creates real value for customers, leading to benefits such as increased satisfaction, loyalty, revenue, and a more sustainable product ecosystem. Recognizing this distinction allows us to tailor our projection, ensuring that design evaluation is focused on the specific goals they are intended to achieve.

Bringing together all the factors mentioned above, the design value projection can be outlined in five steps:

1. Understand and align with your client’s business goals, ensuring your design decisions support key objectives.
2. Identify pain points that can be resolved or transformed with design.
3. Outline the methodology and tools you will use, along with a timeline and cost estimate.
4. Compare the projected benefits of the new design with the current situation, estimating the impact within the defined timeframe.
5. Justify your ROI estimation based on your projection.

At Bolden, we work with a client operating a platform that allowed premium customers to reskin the app with their branding. However, the process of creating a custom theme for each client involved a lot of repetitive work, so we came up with a design system that would substentially optimize and simplify the task. The transformation evidently required an upfront investment; therefore, we needed to justify the 10 days of work required to build the design system.

We supported our proposal with an ROI estimation as follows:

• Each client previously required an average of 20 hours of design work to prepare a custom theme.
• Building the new design system would take 80 hours, but it aimed to reduce the customization time from 2.5 days to just 3 hours.
• This would save the company 17 hours of design time per client, meaning the ROI would be realized after the fourth client customization, leading to significant cost savings for all future clients.
• There were also additional benefits, such as increased customer satisfaction with faster turnaround times and the flexibility to quickly deliver customized demos to potential clients.

Evaluating design with clear business metrics makes the justification undeniable. While this example uses a numeric ROI calculation, a goal-based approach can be equally persuasive when presented with the right strategy.

After convincing your client and implementing the design decisions, it’s equally important to measure their impact. Common metrics like page views or app downloads offer a broad overview, but they fall short of capturing the quality of the user experience. To address this, we need metrics that assess the emotional and functional aspects of the experience. Google’s HEART Framework helps define these metrics in five key categories:

• Happiness: Measures user satisfaction, often collected through surveys.
• Engagement: Assesses the level of user interaction, typically measured through frequency, intensity, or depth of engagement over time.
• Adoption: Tracks the number of new users adopting a product or feature.
• Retention: Represents the percentage of users who continue to use the product or service consistently.
• Task Success: Evaluates user performance through metrics such as efficiency (time taken to complete a task), effectiveness (percentage of tasks successfully completed), and error rate.

Another useful tool is the Net Promoter Score (NPS). NPS measures how likely customers are to recommend a product or service, which indirectly reflects how well the design resonates with users, particularly in terms of user experience and visual appeal. Although NPS is widely used across various business functions like marketing, sales and customer service, it is also relevant for measuring a design’s business impact, especially when it comes to user satisfaction.

The definitions above only provide a brief introduction to design metrics, which have a wide array of use cases. They can be used to assess the impact of your design, persuade clients of its effectiveness, or select and validate key design decisions in a bootstrap setting… But most importantly, they offer a fresh perspective on the value of design that can be applied in almost any business scenario.