LONDON: Design is not a cost or an unnecessary indulgence but something that can create real financial value and marketers need to be able to make the case for investment and to change corporate attitudes.
In a Warc Best Practice paper, How to measure design's contribution to business growth,Joanna Seddon, president/global brand consulting at OgilvyRED, lays out a framework for measuring ROI from investment in design, which in this context refers to any form of communication conducted purely through visual cues.
Clarity is essential when attempting this exercise, she states, starting with what exactly is understood by "design", whether narrowly focused on things like logo, brand identity and packaging, or more broadly on the product itself and areas such as website and retail design.
Marketers also need to be clear on what they want to measure in order to demonstrate that design can create value.
"Too often, picking a design solution is a subjective decision, based on the whim of the most senior executive, or the consensus of colleagues – people who are almost always completely unqualified to have an opinion about design," she says.
"Measuring the ROI from different design options can enable the choice to be based on revenues and profits, rather than someone's personal preference."
It is also likely that customised research will be required since there is so little readily available data in this area – "Design is almost never included in either brand tracking research or customer satisfaction studies," Seddon notes – but this need not be expensive.
The framework itself is conceptually extremely simple, she says, though not quite as easy to implement.
"The secret to measuring the value created by design is to determine how effective design is in creating preference and exactly what role it plays in driving purchase," which will require a piece of market research.
Having established an idea of what percentage of the purchase decision can reasonably be attributed to design, the next step is to translate this to money.
So, for example, if that percentage is 20%, then a fifth of cash flows are design related. "This gives us the link to business financials, and a stream of future cash flows, which we can demonstrate are generated by design."
Then one simply applies the design investment costs to calculate the return on investment.
And that figure can be a compelling argument when marketers are having to make their case against other candidates for investment such as IT.
Data sourced from Warc