The Golden Age of Design

We lucky few are to be congratulated! Those designers and design strategists among us have, in my opinion, entered the industry exactly at the right time. Never before has design been more valued. Elevated from a “marketing service” to a corporate ethos, design has just recently been rightfully recognized as an unique strategic business building, and uniquely profit-generating tool.

“Show Me the Money”

While we now live in the golden age of design, we also live in the age of accountability. Despite its recent attacks, there’s still a whole lot of “Six Sigma” analysis out there: a large number of executives who live and die by their ability to quantify their every decision based on its direct impact on bottom line profits. So how does design survive under this specter of financial scrutiny? Can design be quantified? Among the myriad factors that influence consumer purchase dynamics, can the specific impact of design be extracted? If so, is there an accounting-approved methodology that can yield statistically accurate results?

The Irrefutable Proof

Based on consultation with Northeastern University statisticians and information gathered for the better part of the past couple of decades, I think that design’s specific impact on bottom line profit can, in fact, be extracted and quantified. Wall street analyzes brand identity design as making the highest contribution to brand valuation. Data based on a couple dozen high profile case studies shows that the specific return on investment in design is 50 times that of advertising or any other branding effort.

My goal is to provide you with the tools to prove design’s ROI to yourself, your organization, your clients, and to the larger business community as a whole.

The Details

In an effort to be concise, I’ll not reiterate the methodology used nor its result. All this information is outlined in detail in two articles that I wrote on the topic. The first article, “Proving Our Value,” outlines the step-by-step methodology and its results. The second details the “Moment of Truth” of exactly how and when to collect the data ensuring design’s specific contribution to incremental sales and profits. To summarize these articles, based on more than two dozen brand identity/package redesign case studies, for every dollar invested in the design process, more than $400 of incremental profit is generated. That’s a 4,000% return on investment!

Design’s Unique Values

As most of us know all too well, design is significantly cheaper than advertising and many other branding efforts. This makes the return on the design investment even that much more impressive. While design may be less expensive, it certainly has the largest reach and the most direct impact on sales. I cut my teeth in the advertising industry and know that, at best, less then 10% of a brand’s entire audience will have seen an ad before setting out to buy the product. Brand identity/package design is seen by literally 100% of possible consumers, providing the last and most important opportunity to influence the sale. What’s more, consumers bring design home, allowing design to continue building positive brand associations at every usage occasion. With a brand identity/package design architecture often outlasting three or four ad campaigns, brand identity design is also among the most permanent branding effort. Even without the ROI hard numbers, these and other factors prove design’s paramount value.

The Disclaimer

These results are real. But, again, they have been established using a relatively small number of case studies, and all the case studies have been based on brand identity/package design. More research needs to be conducted across the broader spectrum of design services to determine an overall guidepost. Statisticians tell me that this sample size is large enough for its results to be accurate and relevant, but not yet large enough to be statistically projectable. That’s where you come in!

The Quest!

I’m calling for you to join the quest to verify design’s ROI. Start by collecting data from your own design principles. Use the methodology outlined in the linked articles and/or modify it to best meet your project needs. Build design ROI measures into your best practices. Then purge your data of any confidential material and share it. Together we will develop a design ROI consortium that will continue to prove our value.

The Next Steps

The next posts will discuss what we should do with the data: who should collect it, and how it should be “positioned” with marketing and executive management. They will discuss the pros and cons of being able to quantify designers worth. Finally, they will discuss the benefits to both corporate design departments and their consultants of replacing the fee-based compensation paradigm with new ROI-based compensation strategies.

If you have any thoughts about design ROI or any data, please share it with me below or at rob@wallacechurch.com, and together we’ll continue design’s quest for quantification.

This entry was posted on Monday, August 20th, 2007 at 1:32 pm and is filed under Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.