How Design Elevates Brands and Drives Revenue

As a product designer with over 35 years of experience, I have worked on innovation-focused projects across various industries, including consumer electronics, housewares, sports equipment, hospitality, transportation, and medical technology. I have witnessed firsthand how design can be a game-changer for businesses. It's a fact that well-designed products elevate customer satisfaction, attract new buyers, strengthen brands, and enhance a company’s reputation. Companies that invest in design often see their market value double compared to their peers. While this may be obvious to design practitioners, many business leaders, especially in industries new to design, may not fully grasp its business value.

?I want to emphasize that the strategic execution of design, known as "Design Thinking," is so influential that it's taught at top MBA programs across the U.S., including Harvard, Stanford, MIT Sloan, and Berkeley Haas. These programs prepare the next generation of business leaders to use design as a tool for business success.

When engaging with new clients, I consistently find myself explaining the basics of product design and its importance to business. This article is written specifically for business leaders to illustrate how design can elevate your brand and drive revenue.

What is Product Design??

Product Design is about improving products through an intense focus on the end user. It's about making the user experience smooth, intuitive, and enjoyable. When users feel confident using your product, it enhances their experience, builds your company’s reputation, and fosters brand loyalty.?

Strong brand loyalty, like that seen with Nike, Apple, and Audi, transcends any single product. Customers trust these brands because of consistently positive experiences, leading to repeat business, higher customer lifetime value, and a competitive edge in the market. A strong brand also attracts new customers and justifies premium pricing.

Design is More Than Just Looks

Many people in product development still believe that design is solely about appearances. While aesthetics is indeed part of our work, design encompasses much more. Product design is a holistic discipline that includes the emotional connection driven by aesthetics and semantics, user research, functional definition, innovation, usability testing, ergonomics, materials, and manufacturing. Today, a mature product designer transcends specific disciplines, exceling in experience design, interaction design, physical product design and brand.

Good design aligns with the brand ethos and is a consistent thread through all outward-facing brand elements, including the product, logos, advertising, websites, photography, and even the style of the copy. Consistency in design presents your company as mature, sophisticated, and worthy of the technology you’re delivering.

Good design is a collaborative process that requires close collaboration with your engineers, marketers, and other stakeholders to ensure the final product meets all technical requirements and market demands."

Here are the key benefits of good design for your company:

1. Drive Customer Adoption:

Products that are easy to use and visually appealing attract more users. Ergonomic features and intuitive digital interfaces enhance user interactions, potentially increasing user adoption rates by up to 30%.?

2. Enhance Customer Loyalty:

Customer loyalty is built on trust. Understanding customer needs and consistently delivering on company promises lead to smooth and enjoyable user experiences. A study by Bain & Company shows that increasing customer retention rates by 5% can boost profits by 25% to 95%.

3. Increase Revenue:

Great design drives revenue growth. Easy-to-use, attractive, and reliable products encourage purchases and justify premium pricing. User-friendly interfaces reduce attrition and increase conversion rates, boosting sales and recurring revenue streams.

4. Expand Market Share:

Good design helps grow market share. Satisfying, well-designed products with strong brand connections attract new customers and retain existing ones. Apple’s innovative design has significantly increased its market share over competitors like Microsoft and Samsung.

5. Differentiate Products in the Market:

Exceptional design makes products stand out. Unique, ownable design attributes that align with the brand story create distinct and memorable products. This builds a strong brand identity and fosters enduring customer relationships.

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6. Lower Operational Costs:

Good design saves money long-term. Products designed with fewer components and easier assembly cut manufacturing costs. Durability and simple maintenance reduce repair and replacement expenses. Intuitive interfaces in software reduce IT support needs post-launch.

7. Increase Innovation and Creativity:

A strong design culture fosters innovation and creativity within a company. Design-led workshops bring stakeholders together to unify around company goals and objectives.

8. Reduce Costs and Increase Efficiency:

Thoughtful design leads to more efficient manufacturing processes, reducing production costs. Involving design early in the product development process streamlines timelines by constantly checking concepts with end users to ensure value delivery.

9. Higher Perceived Value:

Good design addresses pain points and enhances the overall user experience, reducing frustration and increasing satisfaction. Aesthetic appeal and superior functionality increase a product's perceived value.

10. Improve Customer Retention:

Good design enhances the user experience, reducing frustration and increasing satisfaction. This leads to stronger brand loyalty and repeat business.

*The Business Value of Design

McKinsey & Company conducted a study titled "The Business Value of Design," which shared findings from five years of research involving 300 companies. Their analysis highlighted that companies excelling in design achieve significantly higher revenue growth and shareholder returns. These top-quartile companies outperformed their peers by 32% in revenue growth and had 56% higher shareholder returns over five years.

Key Findings:

1. Financial Performance: Companies excelling in design experience higher revenue growth and shareholder returns.

2. User-Centric Approach: Successful companies adopt a user-centric design philosophy, integrating physical products, digital tools, and services.

3. Cross-functional collaboration: Leading companies ensure design is a shared responsibility across the organization.

4. Continuous Iteration: Top design performers engage in continuous iteration, consistently refining their designs based on user feedback.

5. Analytical Leadership: High-performing companies treat design metrics as rigorously as financial metrics.

6. Strategic Integration: Design-driven companies often look beyond their ecosystems to create value, leveraging design in innovative ways.

McKinsey’s report underscores that design is a crucial driver of business success. Companies that prioritize design and integrate it into their core operations are better positioned for higher growth and creating more value for their stakeholders. This comprehensive approach to design sets the stage for sustained competitive advantage.

The business value of a user-focused design process cannot be overstated. By revealing and addressing the end-to-end user experience, companies can create products and services that truly resonate with their customers. A human-centered approach to design produces outcomes that solve real customer needs and pain points and drives innovation. When every interaction with your products is enjoyable and friction-free, customers come back for more, tell their friends, and ultimately, your business wins.

Written by: Max Burton MA(RCA) FRSA, IDSA

Sources?

McKinsey & Company's "The Business Value of Design":

The McKinsey & Company's study "The Business Value of Design" was authored by Benedict Sheppard, Hugo Sarrazin, Garen Kouyoumjian, and Fabricio Dore. “The Business Value of Design" provides extensive analysis over five years, involving 300 companies. The study underscores that companies excelling in design experience significantly higher revenue growth and shareholder returns. The report emphasizes the strategic integration of design into business processes, continuous iteration based on user feedback, and cross-functional collaboration as key factors driving superior financial performance. The findings show that top-quartile design companies outperform their peers by 32% in revenue growth and 56% in shareholder returns over a five-year period.

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Bain & Company Study on Customer Retention Rates:

The widely cited statistic that increasing customer retention rates by 5% can boost profits by 25% to 95% originates from research conducted by Bain & Company, in collaboration with Earl Sasser of the Harvard Business School. This research underscores the significant impact of customer retention on profitability, highlighting that loyal customers tend to spend more over time and generate additional referrals. The study has been widely referenced in various business analyses and publications, including articles by Amanda Stillwagon on Small Business Trends and supported by sources like Toptal and Contentsquare