Decades ago, Thomas J. Watson Jr. grew IBM on the premise that “good design is good business.” Today, this sentiment has never been truer, and yet no less difficult to sell. While design-centric companies outperform the S&P 500 by more than 211% according to the Design Management Institute (DMI), how that value is conveyed is still complicated.
The problem isn’t that there’s no correlation between design and the bottom line. The problem is we’re trying too hard to sell that correlation, instead of giving companies the tools and stories to figure it out on their own. Whether you’re selling design value internally, or to customers, there’s a good chance you’re focused on the wrong things.
According to new tests run by AI sales platform Gong.io, bringing up ROI at any point in the sales process correlates to a 27% drop in close rates. The harder you sell ROI, the harder it is to make the sale. The Gong article goes into a little more depth about why ROI backfires:
“Presenting ROI to your customer awakens the wrong part of their brain. The human brain has two parts: logical and emotional (this is grossly oversimplified). Your goal as a seller is to push the right buttons in the emotional brain. That’s where buying decisions happen.
When you calculate ROI, you stimulate the logical brain: the part responsible for critical analysis. That’s why every time you present ROI, your customer rolls their eyes and argues with your assumptions.”
The article also argues in favor of stories over ROI calculators. As a student of the behavioral sciences, this delights me no end. While the evidence is already there, it’s good to be reminded that stories access your customer’s emotional brain.
Learn more about the business impact of design by reading our The Total Economic Impact of InVision study.
A strong narrative solicits higher engagement with our emotionally-centered brain. While numbers are essential, they need context. Placing the numbers (content) in the right context is just smart. It’s good design.
The specific ROI of design
Before we drill into the importance of structuring your design value story, let’s talk about those DMI numbers. Assuming the DMI report is reasonably accurate, every dollar spent on UX brings in between $2 and $100 in return. This is still a very wide range. No leader worth their salt will be impressed by a spectrum that ambiguous.
“For any conversation about value to be successful, you need a framework.”
Be very careful about using generalized statements that claim an ROI of $100 per dollar invested. Instead, when communicating the value of design, be specific about the discrete initiatives you’re embarking on and the specific associated returns you will be measuring.
Senior leaders will have noticed that the top performers in DMI’s surveys increased their revenues and total returns to shareholders (TRS) substantially faster than their industry counterparts did over a five-year period—32 percentage points higher revenue growth and 56 percentage points higher TRS growth, to be exact.
While this is great news for shareholders, leaders need to break those numbers down and address how their design teams will leverage their skills to move specific levers.
The value of design goes beyond design
Design can’t move these levers on its own. If we’re talking about business value, we need to include all areas of the business in these initiatives. Although design teams have achieved significant integration, there are still many companies that perceive them as a department alongside marketing, finance operations, or customer support. It’s extremely difficult to create a customer-centric organization with fiefdoms and silos. InVision’s New Design Frontier survey found that more and more companies are up-leveling their design maturity by becoming fully integrated design organizations.
In spite of this positive trend, design, as a strategic practice, is poorly distributed in most organizations. In fact, only 5% of the companies surveyed are reaping the greatest benefits of design. We still have lots of work to do. For a design transformation person like me, that’s exciting.
The better way to sell the value of design
As product and design leaders, it’s essential to devise reusable and robust strategies to communicate the ROI of design and your team. Here are my suggestions for creating an environment where the value of design can be clearly understood, activated, and measured.
1. Create customer-centric principles for how you sell design
For any conversation about value to be successful, you need a framework. Principles and values create that framework for those conversations. Putting the customer at the center of your values means you’re always arguing for the objective value of the customer experience and never about subjective opinions.
“Designing a revenue machine means delivering on a promise you’ve made to your customers. Only do the things that give them real value.”
To some, being customer-centric may sound like being asked to sacrifice shareholder value in exchange for making customers marginally happy, and in certain cases, this might be true. Whether you like it or not, CX drives your business. The hundreds of high-performing product teams we interviewed for our book, Product Leadership, embrace customer-centric values, structures, and processes to derive a material outcome for their organizations.
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2. Validate early and often (and show your validation work)
Create a design process that validates anything that makes money and delivers customer value. My personal favorite is combining the outcomes of a design sprint (establishes customer desire) with pilot programs where customers are exchanging real value (time, money, energy) for your product.
Related to the validation of the designs is showing the work of the design team. How did you get to these validated conclusions? How did you solve the problems? What designs were tested? Conversations are great, but being able to show the assets related to that work is a very powerful marketing and sales tool.
3. Keep design’s seat at the table
Internally, design needs a platform to be able to sell its value. We fought hard to get the seat at the executive table, so let’s not squander that opportunity. Work to keep the design team’s seat at the executive table with discrete projects, with objective results that can be measured and shared. Align the company’s OKRs with the design team’s outputs and outcomes.
Remember, it’s not the executive’s job to come and find out what you’re working on. Always be selling the value of the design up and down the organization. Always be sharing. Never believe you deserve a seat at the table just because design is topical.
4. Start small and build momentum
Expecting your entire organization to suddenly understand the connection between an intentionally designed customer solution and something that makes money is naive. Start with a discrete project and then share the results like your job depends on it. Do that again. And again. Market the results back into the organization to get more support.
5. Learn to speak the language of business
In Trevor Noah’s brilliant book, Born a Crime, he reminds us that the easiest way to build rapport with others is to speak their language. When you speak to someone in their own language, you create understanding and empathy. Don’t assume other teams speak the language of design either. What metrics and measures do other teams use? What do the acronyms mean? How can you translate your jargon into their jargon?
“When you speak to someone in their own language, you create understanding and empathy.”
6. Scale design teams with efficiencies and not just headcount
My first investor at Acceleration, now a Wunderman company, would remind me that it’s better to outgrow your shoes than to grow into oversized shoes. “You’re less likely to trip over your own feet,” he’d say.
Small teams are faster. They share information better than large teams and make decisions at a higher cadence than big teams. Learn to scale skills, not just team size. Delivering efficiencies, like DesignOps and design systems, are more useful and easier to scale than adding people.
“Learn to scale skills, not just team size.”
7. Prioritize what will achieve your customer’s vision of the future
Designing a revenue machine means delivering on a promise you’ve made to your customers. Only do the things that give them real value. Kill the shiny distractions. If you don’t, your design or product org will look like a puppy chasing a laser toy. Stay focused. People can tell when you’re lost.
8. Integrate, integrate, integrate
Seek to create as much design cross-functionality as possible. Embed your designers with all the product teams, either formally or on an informal basis. Restructuring teams for integration is a big leap, but bear lots of fruit.
9. Structure for revenue
Teams behave in alignment with the way you structure their relationships. How are your design teams structured to generate results that can be measured as business and customer wins? Cross-functional, autonomous teams that have close proximity to customers will behave in highly-responsive, innovative ways. Build the right structures and the behavior will align.
It’s important to note that these suggestions take time to implement. You’ll need to be comfortable with making lots of incremental changes, and sometimes a few big leaps. Transformation needs a vehicle to accelerate the phase changes. Be patient, but stay the course.
To learn more about the business impact of design, check out The Total Economic Impact of InVision study.