Is Design ROI-able?

In a superb multi-part series by Invision App, we find out key clues and tested business levers enabling every design team and company to better communicate the true value of design to their client. And ultimately, to draw up a framework for determining the ROI of design work.

Here’s a fact: 

“Design-centric companies outperform the S&P 500 by over 211%,” says the Design Management Institute (DMI).

What’s the rub?

Conveying the value of design is a complicated affair. Designers try to explain this using qualitative thinking —aesthetics or user experience— but alas, this is not the language of business people, nor what drives them to take action. The business language is based on quantitative thinking… meaning where design’s true impact lies represented with numbers and metrics, as well as strategic argumentation. 

And it gets even trickier…

Recent tests from AI sales platform Gong.io reveal that bringing up ROI at any point during the sales process equates to a 27% plunge in close rates.

Counterintuitive, isn’t it?

The harder you sell ROI, the harder it is to make the sale. So yes, it is. When talking ROI to customers, you are poking the wrong part of the brain, the logical side. Purchase decisions take place in the emotional brain and that’s where you need to focus your resources.

How to go about it then… here are few pointers:

1. Learn to speak the language of business. In the Tipping Point, Malcom Gladwell says, “Part of what it means to have a powerful personality is that you can draw others into your own rhythms and dictate the terms of the interaction.” He’s speaking of salespeople. Further, in his book Born a Crime, Trevor Noah insists: the easiest way to build rapport with others is to speak their language.

2. Keep design’s seat at the table. Sell the value of design (your design) up and down the organization and to your clients at every chance you get
3. Customer experience drives your business. It’s as plain as that. So, create customer-centric principles for how you sell design based on customer values, structures and processes. Always prioritize what achieves your c
customer’s vision and kill the shiny distractions pronto. Stay focused: clients (heck, everyone) can tell when you are lost.
4. Validate early and often… and show your validation work. Establish design processes that validate any initiative that makes money or delivers customer value. Be ready to represent all the assets related to your work; this is an extremely powerful marketing and sales tool.
5. Start small. Build momentum. Attempting t make your client understand the link between an intentionally designed customer solution and a money-maker is naive, at best. Start small, share your results without a second thought. Do this again, and again, and again. Market results every which way. If you’re a small firm or team, make the client acutely aware of how small teams are faster, share information better, and make decisions at a higher pace than big teams. Finally, scale skills, not just team size.
6. Structure for revenue. Is your design team is built to generate measurable results as business and customer wins? Cross-functional and autonomous teams are highly-responsive, more innovative, and establish close links with clients. Build the right structure:
7. Use a profit tree to define business levers. Companies need to be profitable, so build a tree that illustrates how your design has achieved 2 basic established goals and with 4 business metrics.

  • Increase revenue by either attracting more clients (conversion and referral rates) or increasing customer value (purchase frequency, retention, price).
  • Decrease costs, whether they’re fixed or variable (marketing, materials, hosting, etc.)
  • Draw up a numbers chart to forecast financial impact. Basically, this means you need to know the status quo numbers and the impact (improvement) estimation. Explain how you increased revenues or decreased costs or both.
  • Communicate with projections. Or forecasts. Or hypotheses. Frame your numbers as assumptions. Heck, in the business world, what else is a financial or viability plan but a projection of assumptions? 
  • Heed criticism. Cause it’s coming. Business people and clients understand numbers and will challenge yours. Be ready to defend your estimates, but let them tell you about theirs, and their approach. Have them be part of this conversation too.

Sources:

https://www.invisionapp.com/inside-design/better-way-to-sell-design/
https://www.invisionapp.com/inside-design/estimate-roi-design-work/?utm_campaign=Weekly%20Digest&utm_medium=email&_hsmi=89638148&_hsenc=p2ANqtz-9qdNdoFhLRpob7dpqdnk6RYkL4_Db0ArRkSytcMdpqkfUH4kCbKm6_bMSGnhTmt-ZYXGu4Qbx7Gx_vaRuMaCdou4QxOg&utm_content=89625773&utm_source=hs_email

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