In Part 1 of this post, I explained how an ROI analysis can empower corporate design departments and solidify their role in the brand building process. Today, we’ll talk about why this information is beneficial consultants and how it can change the client/consultant relationship.

Accountability Leads to Partnership: Benefits for Design Consultancies

Now let us assume that consultancies are selected and compensated based on how their work contributes specifically to brand profits. How would that change the client/consultant relationship? What if a firm was selected for an engagement not because it submitted the lowest bid but rather because it made the biggest financial commitment to brand success? What if compensation was not based on an hourly rate or a fee structure but instead the mutual financial success of both the brand and the consultancy? What if design firms billed their costs but only took their share of profits when a pre-determined amount of incremental sales, market share, or profits had been exceeded? What if the design firm shared in 5% of the incremental profits? This is again just a tiny portion of the additional earnings over and above the pre-determined ROI expectation. How would that change the game?

Proceed With Caution, but Proceed!

Here’s where we separate the men and women from the boys and girls. If you firmly believe, as I do, that your process generates more value that any other marketing effort can; and if you believe based on this series of articles, that design can and should be quantified, then the next (big scary) step is to prove it to yourself, your organization, and your clients. Start slow, and proceed with caution, but start!

Begin by selecting a prototypical assignment. Measure the market share and profits before initiating design. Conduct the real-world research discussed in this article. Launch the new design in a half dozen retail locations, and compare sales with identical markets. In this real-world research, design is the only variable. For both the test and control sets, the market dynamics are the same. The advertising and promotions are identical, and the waxing and waning of general consumer interest has an equal effect. The only element that changes is design. This irrefutable research will provide a benchmark ROI number that you can then use as a standard.

Chronicle each assignment, and identify the “best practices” that produce the highest ROI. Soon you will have a data set rich enough to support ROI predictions. Imagine how that will empower your corporate design department.

As a consultant, imagine being able to say, “Based on our analysis, we expect that within the first year, our new identity design will result in an 11% increase in sales and a 15% increase in profits. We will not bill profits on this engagement until that expectation is satisfied. In exchange, we would ask that you participate in an additional performance bonus, once we exceed the measure.” How would that change things?

The time is now. The opportunity is real. If you believe in the idea, embrace it, and own it. You got into this industry for a reason. You passionately believe in design’s value. Harness that passion and prove that design is the single most cost-efficient and sales-effective marketing tool, and earn the rewards for doing so! I wish you luck in that quest, and I look forward to a continued dialog, via either this blog or email (rob@wallacechurch.com.) Thanks!

This entry was posted on Tuesday, November 13th, 2007 at 2:22 pm and is filed under Design. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.