“You cannot understand good design if you do not understand people. Design is made for people.” - Dieter Rams
Imagine this: You're the design leader, filled with ideas that could transform your company's product. But there's a challenge approaching fast: budget season. You need to make a compelling case for the resources your team needs to bring those ideas to life. The world of business is a numbers game, and design is often seen as a frivolous expense rather than an investment. While intuitive experiences and eye-catching visuals undoubtedly enhance user experiences, the question, whether spoken or not in the meeting, is: "But what's the ROI?"
In a world where data-driven decision making is paramount, it is imperative to move beyond the subjectiveness of visually appealing design and consider the measurable impact design has on a company's financial performance.
I really believe design is the unsung hero of the business world. It's the reason customers are drawn to your product, the magic that makes complex tasks feel effortless. But the influence goes deeper. Design is a dynamic force, impacting both the external world of your customers and the internal workings of your company:
At its core, design is the language through which brands communicate with their customers. It's the first impression, the promise, and the lasting memory. By creating products that are intuitive to use, visually appealing, and foster an emotional connection, design can attract new customers, create a loyal following, and ultimately boost revenue.
Imagine a sleek and user-friendly mobile app that seamlessly guides users through a complex purchase process. Or a website that not only showcases products beautifully but also anticipates user needs and offers personalized recommendations. These are examples of design in action, creating positive experiences that drive customer engagement and translate into tangible financial gains.
The impact of design extends beyond the user-facing realm. Within an organization, design can act as a catalyst for efficiency and cost reduction. By streamlining workflows, improving communication, and facilitating collaboration, design empowers employees to work smarter.
Consider a well-designed internal enterprise dashboard that provides employees with real-time data and actionable insights. Or a meticulously crafted onboarding process that minimizes new hire ramp-up time. These are instances where design optimizes internal processes, eliminates bottlenecks, and overall reduces operational costs.
When it comes to measuring Design ROI we embrace a more analytical approach. Measuring the ROI of design requires a blend of art and science, combining strategic thinking with data-driven insights.
1. Define Clear Objectives and KPIs:
Before embarking on any design project, it's crucial to establish a clear vision of what success looks like. What specific business goals do you aim to achieve through design? Are you looking to increase sales, reduce churn, or enhance employee productivity?
Once you've defined your objectives, identify the Key Performance Indicators (KPIs) that align with those goals. These are the measurable metrics that will serve as your compass, guiding you towards success and allowing you to track progress along the way. You can read more about KPIs here.
2. Calculate ROI:
The classic formula for calculating ROI is as follows:
ROI = (Gain from Investment - Cost of Investment) / Cost of Investment
In the context of design, the "gain from investment" could be the increase in sales resulting from a redesigned website, the reduction in customer support calls due to improved product usability, or the time saved by employees through a streamlined workflow. The "cost of investment" encompasses all expenses related to the design project, such as salaries, software licenses, etc.
It's important to note that attributing gains solely to design can be challenging, as multiple factors often contribute to business outcomes, such as marketing campaigns. Do your best to isolate ROI from those outside factors. You might take advantage of control groups or A/B testing.
Remember, measuring the ROI of design is an ongoing process. As you gather more data and refine your measurement techniques, you'll be able to continuously improve your understanding of design's impact and leverage its potential to drive business success.
Having measured your KPIs and calculated the ROI of design, the next challenge lies in communicating it to stakeholders. Whether you're presenting to the C-suite or rallying your design team, the way you convey the information can make all the difference in getting support and future investments.
Report Responsibly:
Transparency is the backbone of reporting that you can trust. When presenting ROI, be upfront about the fact that these figures are estimates, not guarantees. Clearly articulate how you arrived at the results, calling out any assumptions. Honesty and builds trust.
Visualize Data:
Don’t overload your audience with numbers. To capture the attention of stakeholders and make a lasting impression, transform your data into a compelling story.
By presenting data visually, you tap into the power of storytelling, making your message more memorable and persuasive.
If you are using charts, use the right charts. Check out this short by Jeff Su.
Know Your Audience:
One size does not fit all when it comes to communication. Different stakeholders have different priorities and concerns. To maximize the impact of your message, customize your communication style to resonate with each audience.
For example, when presenting to executives, you might want to emphasize the financial benefits of design, highlighting cost savings and revenue growth. On the other hand, when speaking to design teams, you could focus on customer satisfaction. By understanding your audience's motivations, you can craft a narrative that speaks directly to them.
Remember, communicating design ROI is not just about numbers; it's about telling a compelling story that inspires action and drives business success.
Design is the factor that separates good companies from extraordinary ones. By measuring ROI, you're not just landing your budget; you're shaping the future of your organization. Design isn't about making things look good; it's about making things work better for everyone.