Proving Design’s ROI: What To Do With the Information Part 1
Author of this post: Rob Wallace | About Blog Authors »We’ve nearly reached the end of our quest to empirically demonstrate design’s direct impact on bottom line brand success. In my first post, “The Quest for Quantification”, I explained a Northeastern University accredited methodology that proves design’s value and detailed the exact moment in time and the specific process which unequivocally and irrefutably identifies design’s specific contribution to brand sales. I analyzed the relatively small but deep and rich data set that proves design generates more than 50 times the ROI of advertising.
In my last post, “Being Careful Of What We Wish For”, I addressed several real-world concerns about the quantification of design and concluded that proving its value can be a good thing - a very good thing in fact, but if and only if, the information is handled properly.
So what’s left to do? Now that we know we can quantify design and should quantify design, we must determine what should be done with the information. What is the end game? Now that we’ve proved that every dollar invested in design generates an unprecedented return, who is interested? How will management interpret all of this? At the end of the day, is this all just an elaborate sales pitch?
My next two posts will discuss the real benefits of proving design’s value. Today, I’ll show you how an ROI analysis can empower corporate design departments and solidify their role in the brand building process. In Part 2, I will discuss how this information can benefit consultants by justifying their fees and encouraging clients to make larger investments in design. The second installment will also examine true client/consultant partnerships, where each partner has “skin in the game” driving brand success, and how this, in turn, will change everything!
Accountability Leads to Autonomy: Benefits for the Corporate Design Function
In the absence of a true valuation model, corporate design departments can easily be relegated a “marketing services” role. In this scenario-and there are far too many major CPG corporations who adopt it–the marketing department drives the process and controls the purse strings. Marketing decides when a brand is outdated and needs to change. Marketing initiates the process. Marketing pays for it. And to a great extent, it plays the most significant role in determining the outcome.
Now imagine another scenario is which the corporate design department’s role has been quantified. As a result, the department is accountable for its own processes and in control of its own budget. Design determines when a brand identity requires enhancement. Design initiates the process. Design pays for it. And design has equity in the decisions that lead to project success. Quantifying the corporate design department’s function and proving its paramount value is the first step toward this ideal goal.
Here’s a strategy to could initiate the process. Using the provided methodology and a series of case studies, corporate design departments could establish a realistic expectation of the direct financial return on the design investment. When assignments exceed this mark, the department would be directly rewarded with a contribution to its budget of say 10% of the incremental profit dollars. That’s a very small portion of the additional profit over and above the pre-determined ROI expectations.
What is the design department to do with the money? Reinvest it in the design process! The department might soon accumulate a small reserve to invest in future-thinking innovation explorations. It might choose to give an under-budgeted branding initiative with the resources it requires. It might consider investing in longer-term sustainability measures and again seek to prove the value of these investments. It might dedicate the reserve to the continued education of staff members. In short, it could use the money to regain control over the design process and further prove the design department’s unique value to the entire organization. That alone is worth the effort required to prove design’s value. Read the second installment of this post to learn more about additional benefits associated with quantification of design’s return on investment.
