In these days of tightening budgets we see many businesses seeking to justify the expense of a brand or packaging redesign. The question that is often asked is how do you measure the value of design, or even better, the return on investment for a branding or packaging redesign project?
Personally, we think that this is the wrong question to ask as we have always considered business innovation as an absolutely necessary investment for continued business growth. It’s almost like asking Apple why they would continue to invest in creating beautifully designed products that their loyal customers eagerly wait for each year? Clearly Apple sees the value of design and, as the huge success of Apple products clearly show, innovation and creativity is something that must be an ongoing and continuous process in every business.
“Product design is a form of communication — it demonstrates your value system, what you care about”
According to former Apple vice president Don Norman, the power of Apple’s brand is that it has never been a hardware company or a software company, it has being a systems company, seamlessly integrating the design of its products into the daily lives of their users. Norman continues, ”there was always this concern for making things attractive, beautiful, enjoyable and completely understandable.” Current Apple design chief Jony Ive states, “we are fanatical in terms of care and attention to things people don’t see immediately, product design is a form of communication — it demonstrates your value system, what you care about.”
What is the Value of Design?
For products on the retail shelf the value of design can be enormous. In fact, a company’s brand image and packaging design is often the only touch point that a consumer has with the brand until they have actually purchase and try the product. In fact, studies show that a strong brand image and appealing packaging design can often connect with and influence consumers into purchasing that product over a competitor’s product in just 3 seconds as a consumer scans the product shelf. This is why a brand or packaging redesign project is so important to get right. When you build a visually appealing brand that truly connects with your target market you can increase your reach and awareness through viral word of mouth marketing, sell more products and often times even charge more for your products.
Sales executives are often one of the few groups in a business that truly understands the value of design since they are on the front lines and know that inherently good design leads to more sales. So why is it that executive and management teams are so reluctant to invest in a brand redesign or packaging redesign project? Well, Let’s face it, business people operate in a world of numbers and oftentimes it comes down to the question “what is the immediate return on investment for this redesign project?”
How Do We Measure Design ROI?
Measuring the exact return on investment of a branding or packaging redesign is admittedly difficult but Rob Wallace, managing partner of Wallace Church Inc., a package design company that works with large brands like Home Depot, Nestle and Samsung has worked hard to determine a methodology that can actually prove the ROI of a brand or packaging redesign project. Rob put together 20 different case studies major consumer packaging redesign projects and published the results showing real sales increases and the amount of profit that the increases generated.
“For every dollar invested in packaging design, there was a $15.17 average return on investment”
The facts of this research show a very significant positive return on investment for branding and packaging redesign projects. As Rob states, “Based on two dozen case studies with Fortune 500 companies, for every dollar invested in advertising, packaging and promotion, and visual communication at the point of sale, companies realized a $7.21 ROI. But when the advertising didn’t change (or there was no advertising)—and packaging design was the only thing that did change—there was a $15.17 average ROI on every dollar invested.”
You can learn more about Rob’s “value of design and ROI” study here.
“The top design driven companies have shown growth of 219% over a 10 year period compared to their peers in the S&P 500”
Still Unsure About the Value of Design?
Then let’s return to Apple and also add a few other design driven companies such as Coca-Cola, Ford, Nike, Starbucks, Target and Walt Disney into the mix. The 2014 DMI Design Value Index study charted the growth of 16 design conscious companies over a 10-year period and found that they had grown a remarkable 219% over those of the S&P 500 from 2004 – 2014. The study further notes that Apple carried considerable weight in the study but should not be considered as an outlier but rather as an example of what good product design and branding can achieve.
Learn more about the DMI Design Value Index study.
Clearly branding and packaging design are critical factors in a business’s overall success and the ability to create a strong brand image and attractive and compelling products that connect and resonate with consumers will produce a significant return on investment and consistent business growth over time.