When thinking about sleek and iconic designs, it is clear how great design impacts business. But what is the value of design for regular companies?
Design solves problems! Research from well-known think tanks like Design Council, Design Management Institute, and the consulting firm McKinsey prove that companies with a focus on design, perform better than their competitors, by a wide margin. According to McKinsey, it is a two to one ratio.
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As a disclaimer in advance, the research is mainly focused on large enterprises and publicly traded companies. But there are factors which are applicable to smaller businesses and startups as well.
It is evident by looking at the advertising budget of enterprise companies, and how much they spend on their internal design team, how valuable design is for them. During my career I also witnessed that small business and startups push this topic to the side all too easy.
For instance, if you own a construction firm, you spend a lot of time in technological adoption, safety, risk management, etc. Investing money in marketing and design is probably not much of a priority. Sales departments often receive great attention, because of the direct noticeable value they bring. There are many other things that can bring or influence value for a business, but if they are not visible, they mostly need huge convincing to justify investing in them.
Design influences various areas:
1. Increasing Revenue
2. Reducing Cost
Generally speaking, a business increases their revenue when they attract more customers (market reach), or they increase the volume of interactions with their existing customers (loyalty and engagement). Good design will affect both, partially because of the Halo Effect.
Large companies invest millions into visual identity, because they know that customers consciously and subconsciously judge the visual appearance. Therefore it determines the quality of the product or service. This phenomenon is known in psychology as the Halo Effect. It describes the situation when something visually triggers a positive or negative association.
This effect is something that can be used as an advantage but is at the same time something to always look out for. A positive example would be the car industry. They use this effect to project a positive image into cars. A negative example would be what we all fear when we write something. A single typo can suddenly make us appear less credible, or worst-case incompetent.
A good start for every struggling small business would be to improve their visual identity. It is a reliable way to gain a competitive edge over their competitors.
An effective visual identity design can increase revenue. It does it by:
This simple and overlooked step to differentiate oneself, isn’t a huge financial investment.
Therefore, for those who take the step, it does not take much to get ahead.
Every business wants to reduce costs to be more profitable.
What gets overlooked in day-by-day operations is the inefficiency of usual processes. Especially when they are being done a certain way, for years.
The basic ways to reducing costs are:
Good design can influence fixed and variable costs?
Large companies like Coca Cola, Nike, or Apple are using design guidelines to keep their appearance visually and verbally consistent. No matter the country they operate in, the marketing material or medium they use, regardless the staff size they employ, or the countless ad agencies they hire.
These design guidelines are a rule book and are the only single source for marketers, copywriters, and designers. Without them, every project or design decision will rack up hours of time being wasted with relentless debates.
For example:
All these decisions, besides causing inconsistency over time, cost money. It may not look like much, but an hour here and there adds up. Especially when there are multiple projects going on, like ads, social media posts, newsletters, emails, sales decks, proposals, and websites.
A thoughtfully crafted design tool kit can eliminate the need for small decisions and can increase your profitability by tens of thousands of dollars every year.
Not every design is good. It is hard to decide what is good or bad, because it is all subjective. Honestly, there is no real way to determine it, and forecast what will bring you profit. But to get a sense of good versus bad, check your brand strategy, and see if it aligns.
The design is merely a visual representation of your strategy, and good design will always be able to define and translate strategy into functional design.
About the Author
Lex Chilton serves as the Creative Director, Brand Strategist, and founder of EDISON, leveraging his expertise to guide businesses in making informed decisions. With a focus on mitigating unnecessary expenses on ineffective marketing, Lex empowers companies to enhance their communication strategies, fostering lasting impacts and facilitating business growth.
Connect with Lex on LinkedIn and say Hi!