4 August 2011

Measuring ROI of design

When times are tough you cut back, but there are still expenses that are necessary for a business, even during a recession. But even those need to be calculated meticulously and justified constantly to weigh them against other possible expenses. Those expenses can be justified by measuring the return on investment (ROI), which is “the ratio of money gained or lost on an investment, relative to the amount of money invested.”

Of course, as a design company, we think design is one of those expenses that are necessary to gain competitive advantage in today’s business environment. But we also understand every business also needs to justify marketing and design expenses. But how exactly do you measure the ROI for design?

According to the Design Council in the UK, there are two separate ‘categories’ to measure: Return and Investment. In terms of design, a return could be higher brand awareness, an increased number of website, story, or business visitors, increased product sales, clearer information for clients and customers, or simply a greater market share. Investments on the other hand are costs of materials, staff or agency costs, engineering and distribution costs as well as sales, marketing, and promotional activities. The important thing when measuring the ROI of design activities is to be sure about which of the returns you wish to measure and to know which numbers you want to improve first.

So, how can great design generate a high return? Well, whatever you’re selling, be it online or physically, a website redesign can streamline the shopping and purchasing process, making it much more convenient for the customer and thereby increasing sales. Getting rid of lengthy sign-up processes also greatly reduces your website’s bounce rate (the number of people who leave a site right away).

Packaging can also be redesigned during a sales slump to provide the product with a fresh face and the customer with a more open mind when encountering the product. Packaging also has the ability to tell a story about your product, when done properly, leaving no doubt about what your product actually is and what your company is all about. It also never hurts to think about how easy your packaging is to open, and in the present time, how easy it is to recycle. Things like this may make the difference between a potential customer and an actual customer.

Your corporate design should reflect your corporate culture and identity. This is the only way of attracting people you actually want to work with, to your business, because if they are drawn to your corporate design they will most likely understand, and appreciate, your corporate culture.

There are several other examples; a great business card design makes all the difference when making a first impression, a beautiful and functional website can make the difference between a potential visitor and an actual sale, and a well thought out, well designed packaging concept can sell a product to a conscious consumer. All in all, great design can set your business apart from the crowd, give you competitive advantage, and make your life easier by attracting the right people to your company.

Marketing on a Budget