FWIW, a friend brought my attention to this. I’m not sure I agree with it all 100% (a bit simplistic), but there is a core idea seems to hold some truth.
Return on Design
Return on investment is easy to measure. You put money in, you measure money out, divide and prosper.
But return on design? (Design: graphics, system engineering, user interface etc.)
Design can take money and time and guts, and what do you get in return? It turns out that the sort of return you’re getting (and hoping for) will drive the decisions you make about design.
I think there are four zones of return that are interesting to think about. I find it’s more useful to look at them as distinct states as opposed to a graduated line, because it’s easy to spend a lot of time and money on design but not move up in benefits the way you might expect. Crest might have a better package than Colgate (or the other way around, I can’t remember), but it doesn’t sell any more units…
Negative return. The local store with the boarded up window, the drooping sign and the peeling paint is watching their business suffer because they have a design that actually hurts them. Software products suffer from this ailment often. If the design actively gets in the way of the story you tell or the utility you deliver, you lose money and share.
No impact. Most design falls into this category. While aesthetically important, design in this case is just a matter of taste, not measurable revenue. You might not like the way the liquor store looks, or the label on that bottle of wine, but it’s not having any effect on sales. It’s good enough.
Positive return. We’re seeing a dramatic increase in this category. Everything from a bag of potato chips to an online web service can generate incremental sales and better utility as a result of smart design.
The whole thing. There are a few products where smart design is the product (or at least the product’s reason for being). If you’re not in love with the design of a Porsche 911, you would never consider buying it–same as an OXO peeler. The challenge of building your product around breakthrough design is that the design has to in fact be a breakthrough. And that means spending far more time or money than your competitors who are merely seeking a positive return.
Knowing where you stand and where you’re headed is critical. If you have a negative return on design, go ahead and spend enough money to get neutral, asap. But don’t spend so much that you’re overinvesting just to get to neutral. Watching a local store build an expensive but not stellar custom building is the perfect example of this mismatch.
If you’re betting the whole thing, building your service launch on design first, skimping on design is plain foolish.The Guggenheim in Bilbao would be empty if they’d merely hired a very good architect.
IP: I’ve never compared marketing and ID like that. Interesting.
Marketing has a diminishing ROI as the industry adopts it. Take beer for example. I bet a highly successful ad campaign will budge the numbers only a few tenths of a percent. In this case, marketing becomes a cost of doing business.
I guess the same could occur in design. If everyone is at the neutral level, they have to keep spending on design. Maybe the car industry or furniture is like this. Maybe it isn’t such a bad thing though…
That is true. Continuing to generalize and over simplify here, I think many times the 3 key product functions (design, marketing, development/engineering) exist in a vacuum. Each tends to think itself most important, when a successful product takes an equal partnership of all 3. To contradict what I just said, I think design is better positioned to understand both marketing and engineering.
His comparison of “the whole thing” regarding the design of a Porsche bothers me a bit. I almost positive that people who buy, or don’t buy a Porsche probably don’t consider the “design” of the coolant lines, or the wiring harnesses on a 911 as the deciding factor on making that purchase. I would argue that anything where you love it, or hate it would all fall into positive return, therefore eliminating the need for the 4th category.
But one difference between “design” and “marketing” is that marketing has invested some serious time/money/effort over the years to actually measure “return on investment” - Return On Marketing Investment, Return On Brand Investment. The industry and academic discussion, development, and application of tools/metrics/formulas is alive, competitive, global.
While still very imperfect, marketing puts design to shame in this area and exposes the fundamentally non-business/non-financial mindset of most designers.
It wouldn’t matter…except…when you take a look at a major marketing department’s budget (especially for outsourcing to agencies, consultants, researchers, etc.) vs. a design department’s, the lesson is clear. The department/discipline that at least makes an effort to calculate financial impact of their contribution and consistently speaks in this language wins. Wins big.
I can’t agree with you more, Tixe. Industrial Design spends far too much time whining that they’re “not at the table” as opposed to proving why they SHOULD be “at the table”.
So, to combine Yo’s point with yours, if Industrial Design started figuring out how to quantify the impact of Design in terms of ROI it could very quickly position itself in the same way Marketing has.
Now, ironically, I have begun to position Industrial Design as a Technical Field. Industrial Design, IMO, is one of the four TECHNICAL pillars of the design process: Mech Design, Elect. Design, Software Design, Industrial Design. It’s an eco-system that one can’t live without the other.
If you start to analyze the importance of the interactions between the disciplines, and ESPECIALLY if you include Marketing into the mix, you start to see how each one simply can’t live in a vacuum from the other.j
The real fun part for me, is that I have been thinking this for years. My company is founded on the principal that no single discipline of the Design process can, or should be siloed from the other.