The value of good design

Aug 2023

In 2023 the value of design should be clearer than ever, it’s been proven that businesses that recognise the importance of a design-centric approach are in a better position to succeed.

Joe Gebbia, co-founder of Airbnb credits design thinking for transforming the company “from a failing startup to a billion dollar business.”

In the McKinsey 2018 report: “The business value of design”, which tracked 300 publicly listed companies across industries, over a five-year period, the correlation between incorporating design thinking and revenue growth was clear. A key finding was that companies that performed the best in design, achieved average revenue growth that was 32% higher than their peers over five years.

In a 2016 research report by Forrester it was stated that “on average, every dollar invested in UX brings 100 dollars in return”. Even if the exact numbers have changed since then, these insights can’t be ignored.

Yet, despite its inherent value, discussions around design ROI are still on the table. In the world of business where every decision is meticulously weighed, the choice of where to allocate resources is understandably crucial, but communicating design impact objectively isn’t always easy.

Designers tend to think in qualitative terms. We’re hyper-focused on the user, their needs, and the empathy required to problem-solve. On the other hand, we’re skilled in communication and storytelling — tailoring our message according to the audience is part of our practice. This means we can adopt a business mindset, make use of the appropriate metrics and know our data, to articulate design value in a way that resonates with stakeholders.

Why good design matters more than ever

“The sound of a small bell during a dark night, is louder than the din of traffic outside your window during rush hour. Surprise and differentiation have far more impact than noise does.”

— Seth Godin sums it all up.

In a marketplace overflowing with options, differentiation becomes paramount: the competitive business landscape is fierce, users’ savviness and expectations have risen disproportionally to their attention span and most importantly, their tolerance for poor experiences. As designers, we define how a product looks and feels, but more crucially, how it functions and how it aligns with users’ needs and aspirations.

Good design ensures that a product speaks the customers’ language and delivers on its promise, it isn’t something that enhances a product after the fact. As Marina Peluso says in her compelling article “The ROI of UX. Why Experience Research is profitable”:

“What is usually difficult to understand is that a “good-looking” product is something that is embedded in the way it is made.”

— Marina Peluso

UX design shapes a product’s journey from conception to market. In the context of startups for example, there’s a fine balance between crafting a product quickly and designing it well; its success is largely dependent on user adoption. It’s easy to see why poor design can result in high costs down the road — disappointing user experiences and inconsistent brand perception can ultimately lead to lost customers and opportunities, which are challenging to retrieve. In the McKinsey article: “Why design means business”, Benedict Sheppard advises “if you are going to improve the design capability of your organisation, do it properly, or don’t do it at all”, highlighting the importance of excelling at design for commensurate financial rewards.

Good design entails a holistic approach, continuous iteration and a focus on outcomes, those outcomes generate value. Dan Stulck starts this article, with the first sentence in IBM’s Design Thinking Field Guide: “At IBM, we define design as the intent behind an outcome.”

What early design investment means

Early integration of design can shape product strategy, streamline the product development process, and create a foundation for lasting brand loyalty. We all know companies like Apple, Google, Spotify and Airbnb, that have demonstrated the benefits of good design, user centricity, and its impact on profitability. These companies have been able to deliver great user experiences from the outset and steadily build a devoted user base.

Investing in design is a strategic move with long-term implications:

User research allows businesses to truly understand their customers, define and prioritise the right problems to solve, and continually refine their offerings. Research allows businesses to estimate and improve market response, by eliminating losing propositions and aligning a product with real user needs; this is crucial to business viability.

Consistent experiences build trust and set clear expectations for customers; flawless design and excellence delight them. (This is why we return to the same restaurant for that glorious meal that never disappoints. And this is why we brag about it to our friends).
A design strategy that elevates the value proposition ensures longevity and relevance. It can steer the course of a product’s evolution, ensuring brand strength and cohesive experiences, as the business scales.
Efficient systems and wise resource management (such as defining an MVP), reduce the need for major redesigns, increase output quality, and make adaptations and expansions smoother and less resource-intensive.
Great design primes usability and considers every detail in the user flows. When we lower the learning curve of a product, more customers can engage with it. The book Cost-Justifying Usability by Randolph Bias and Deborah Mayhew, sheds light on the topic by providing case-studies and statistics on why “more usable is smart business”.

How good design translates to business impact

Design’s benefits are multi-faceted and may at times seem challenging to measure, but there are concrete UX metrics that help us evaluate its business impact. The design agency Eleken explains the ROI formula applied to design in “UX ROI Case Studies” and dives deeper into usability, satisfaction and user engagement metrics.

In an informative webinar by UXPin, where Aaron Powers explains how to calculate UX ROI with financial models, he talks about the importance of peeling the layers of the onion between the business goals and UX design through the analogy: “Better teachers → Better grades → Higher graduation rates”. By following the entire path, rather than jumping from A to C we can establish the statistical relationship between action, result and outcome.

The directly observable metrics and revenue upticks:

• Increased conversion rates and sales’ boost — user journeys crafted with care drive users towards desired actions. From this perspective, well designed interfaces, relevant content, and appropriate tone of voice personify a sales’ top performer.

• Increased retention is an obvious consequence of a product that is effective and intuitive to use. A high number of downloads is a great metric, but the real test is when users don’t abandon your app within the first weeks.

• Reduced customer support calls which are expensive — when a product works well, is easy to understand, and provides users with robust documentation; the need to reach out for tech support and the frustration associated with it decrease.

• Time and cost savings through efficient design systems, which allow companies to reduce redundant efforts, improve teams’ collaboration and quite simply, move faster. In this article by Invision, Alen Faljic explains the use of a profit tree to define business levers and estimate a design system’s business impact.

The intangible benefits, with powerful ripple effects:

Higher user engagement, brand reach and NPS, as the result of a thoughtfully designed product.

A robust brand reputation — users and competitors come to recognise and respect a company’s consistent commitment to a solid product or service.
Unwavering customer loyalty, where trust converts to repeat business. Long-term customer relationships are the multiplier of an initial purchase, and the importance of word-of-mouth cannot be overstated.
Organisational alignment — a strong design foundation provides clear guidelines for the product’s direction. When everyone is working towards a unified vision, its manifestation across product touch points is inevitable.

Good design means good business. Prioritising and investing in design from the start can set the stage for sustained success, creating a product that not only works but truly resonates with users.

Evaluating design’s return on investment shouldn’t be reduced to crunching numbers, it should entail a broad understanding of its layered impact: how it can fortify a brand’s market position, how it maximises value for users, and how that leads to revenue.

This article was originally posted on Medium — Bootcamp publication.

The value of good design

In 2023 the value of design should be clearer than ever, it’s been proven that businesses that recognise the importance of a design-centric approach are in a better position to succeed.

Joe Gebbia, co-founder of Airbnb credits design thinking for transforming the company “from a failing startup to a billion dollar business.”

In a 2016 research report by Forrester it was stated that “on average, every dollar invested in UX brings 100 dollars in return”. Even if the exact numbers have changed since then, these insights can’t be ignored.

Yet, despite its inherent value, discussions around design ROI are still on the table. In the world of business where every decision is meticulously weighed, the choice of where to allocate resources is understandably crucial, but communicating design impact objectively isn’t always easy.

Why good design matters more than ever

“The sound of a small bell during a dark night, is louder than the din of traffic outside your window during rush hour. Surprise and differentiation have far more impact than noise does.”

— Seth Godin sums it all up.

Good design ensures that a product speaks the customers’ language and delivers on its promise, it isn’t something that enhances a product after the fact. As Marina Peluso says in her compelling article “The ROI of UX. Why Experience Research is profitable”:

“What is usually difficult to understand is that a “good-looking” product is something that is embedded in the way it is made.”

— Marina Peluso

Good design entails a holistic approach, continuous iteration and a focus on outcomes, those outcomes generate value. Dan Stulck starts this article, with the first sentence in IBM’s Design Thinking Field Guide: “At IBM, we define design as the intent behind an outcome.”

What early design investment means

Investing in design is a strategic move with long-term implications:

Consistent experiences build trust and set clear expectations for customers; flawless design and excellence delight them. (This is why we return to the same restaurant for that glorious meal that never disappoints. And this is why we brag about it to our friends).

A design strategy that elevates the value proposition ensures longevity and relevance. It can steer the course of a product’s evolution, ensuring brand strength and cohesive experiences, as the business scales.

Efficient systems and wise resource management (such as defining an MVP), reduce the need for major redesigns, increase output quality, and make adaptations and expansions smoother and less resource-intensive.

How good design translates to business impact

The directly observable metrics and revenue upticks:

• Increased conversion rates and sales’ boost — user journeys crafted with care drive users towards desired actions. From this perspective, well designed interfaces, relevant content, and appropriate tone of voice personify a sales’ top performer.

• Increased retention is an obvious consequence of a product that is effective and intuitive to use. A high number of downloads is a great metric, but the real test is when users don’t abandon your app within the first weeks.

• Reduced customer support calls which are expensive — when a product works well, is easy to understand, and provides users with robust documentation; the need to reach out for tech support and the frustration associated with it decrease.

The intangible benefits, with powerful ripple effects:

Higher user engagement, brand reach and NPS, as the result of a thoughtfully designed product.

A robust brand reputation — users and competitors come to recognise and respect a company’s consistent commitment to a solid product or service.

Unwavering customer loyalty, where trust converts to repeat business. Long-term customer relationships are the multiplier of an initial purchase, and the importance of word-of-mouth cannot be overstated.

Organisational alignment — a strong design foundation provides clear guidelines for the product’s direction. When everyone is working towards a unified vision, its manifestation across product touch points is inevitable.

Good design means good business. Prioritising and investing in design from the start can set the stage for sustained success, creating a product that not only works but truly resonates with users.

Evaluating design’s return on investment shouldn’t be reduced to crunching numbers, it should entail a broad understanding of its layered impact: how it can fortify a brand’s market position, how it maximises value for users, and how that leads to revenue.

A few words

The value of good design

In 2023 the value of design should be clearer than ever, it’s been proven that businesses that recognise the importance of a design-centric approach are in a better position to succeed.

Joe Gebbia, co-founder of Airbnb credits design thinking for transforming the company “from a failing startup to a billion dollar business.”

In a 2016 research report by Forrester it was stated that “on average, every dollar invested in UX brings 100 dollars in return”. Even if the exact numbers have changed since then, these insights can’t be ignored.

Yet, despite its inherent value, discussions around design ROI are still on the table. In the world of business where every decision is meticulously weighed, the choice of where to allocate resources is understandably crucial, but communicating design impact objectively isn’t always easy.

Why good design matters more than ever

“The sound of a small bell during a dark night, is louder than the din of traffic outside your window during rush hour. Surprise and differentiation have far more impact than noise does.”

— Seth Godin sums it all up.

Good design ensures that a product speaks the customers’ language and delivers on its promise, it isn’t something that enhances a product after the fact. As Marina Peluso says in her compelling article “The ROI of UX. Why Experience Research is profitable”:

“What is usually difficult to understand is that a “good-looking” product is something that is embedded in the way it is made.”

— Marina Peluso

Good design entails a holistic approach, continuous iteration and a focus on outcomes, those outcomes generate value. Dan Stulck starts this article, with the first sentence in IBM’s Design Thinking Field Guide: “At IBM, we define design as the intent behind an outcome.”

What early design investment means

Investing in design is a strategic move with long-term implications:

Consistent experiences build trust and set clear expectations for customers; flawless design and excellence delight them. (This is why we return to the same restaurant for that glorious meal that never disappoints. And this is why we brag about it to our friends).

A design strategy that elevates the value proposition ensures longevity and relevance. It can steer the course of a product’s evolution, ensuring brand strength and cohesive experiences, as the business scales.

Efficient systems and wise resource management (such as defining an MVP), reduce the need for major redesigns, increase output quality, and make adaptations and expansions smoother and less resource-intensive.

How good design translates to business impact

The directly observable metrics and revenue upticks:

• Increased conversion rates and sales’ boost — user journeys crafted with care drive users towards desired actions. From this perspective, well designed interfaces, relevant content, and appropriate tone of voice personify a sales’ top performer.

• Increased retention is an obvious consequence of a product that is effective and intuitive to use. A high number of downloads is a great metric, but the real test is when users don’t abandon your app within the first weeks.

• Reduced customer support calls which are expensive — when a product works well, is easy to understand, and provides users with robust documentation; the need to reach out for tech support and the frustration associated with it decrease.

The intangible benefits, with powerful ripple effects:

Higher user engagement, brand reach and NPS, as the result of a thoughtfully designed product.

A robust brand reputation — users and competitors come to recognise and respect a company’s consistent commitment to a solid product or service.

Unwavering customer loyalty, where trust converts to repeat business. Long-term customer relationships are the multiplier of an initial purchase, and the importance of word-of-mouth cannot be overstated.

Organisational alignment — a strong design foundation provides clear guidelines for the product’s direction. When everyone is working towards a unified vision, its manifestation across product touch points is inevitable.

Good design means good business. Prioritising and investing in design from the start can set the stage for sustained success, creating a product that not only works but truly resonates with users.

Evaluating design’s return on investment shouldn’t be reduced to crunching numbers, it should entail a broad understanding of its layered impact: how it can fortify a brand’s market position, how it maximises value for users, and how that leads to revenue.