We all love (but don't want to pay for) good design

Most marketers agree that design boosts brand perception but few measure its effectiveness and fewer still will be lifting design budgets.

DESIGN

In an uncertain economic climate businesses need to be able to convince consumers that their products and services are worth investing in and frequently turn to the design world for help in the battle to win or retain customers.

According to Marketing Week’s design attitudes research, conducted in association with specialist packaging designer and design consultant JKR, marketers and directors across all sectors continue to believe that investment in good design will enable them to improve the overall customer experience and boost sales.

About this survey

  • This research was carried out in February 2011 among readers of Marketing Week and visitors to our website, MarketingWeek.co.uk.
  • Of the respondents, 15% work in an organisation with more than 5,000 employees; 20% work for organisations with between 101 and 500 employees, while 31% work in companies with between one and 50 employees.
  • Marketers from a variety of sectors responded to this survey - 17% are from financial companies, 13% from travel and leisure companies and 12% are from the retail sector.
  • All results have been rounded up or down to the nearest full percentage point. Not all tables add up to 100, as more than one answer may be given.

The majority of respondents to the survey think design is ’very effective’ or ’somewhat effective’ at getting people to buy a product (81%), while more than a third - 35% - believe that good design can help justify price increases.

These findings are important to note in view of the current market conditions. As prices for raw materials continue to rise, marketers will be hard-pressed to justify the consequent and necessary price increases of the goods they represent - especially at a time when unemployment is rising. Good design could prove crucial in communicating the message that a brand is worth the extra money.

One respondent to the survey, who works for a company that employs between 501 and 1,000 people, says their design “improves brand and quality perception, which in turn increases revenues and profits,” adding: “In today’s markets, there is nothing more important than that.”

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The vast majority (96%) of respondents to the survey agree that design helps a product or service to stand out while 97% agree that making something look good improves brand perception, which is important as products jostle for attention in mature and sometimes jaded market places.

A business development director working for a professional services company admits: “In a sector of ’boring suits’, design helps us to show that we are different to our clients, which also have strong brands.”

But, perhaps surprisingly, 83% of respondents to the survey believe that good design is ’very effective’ or ’somewhat effective’ at improving overall customer experience.

A respondent from a utilities company says that, in that particular sector, the overall customer experience is key. They say: “We are designing for people, so ensuring that our design strategy enhances customer experience across all touchpoints is essential for my business.”

More than two-thirds (68%) of respondents also believe that good design improves employee engagement. One says that good design communicates the “overall value of an organisation”, helping employees to understand the type of business they work for.

However, while the survey results show that design considerations are integral to the success of a business, budgets that businesses are allocating this year to design are low. Of the respondents, 40% are allocating under £50,000 for design, while only 10% say they intend to spend more than £1m. Considering that 30% of respondents are working for sizeable businesses with more than 1,000 employees, there appears there will be a vast under-investment in design this year.

A marketing manager from a consumer goods company says: “Good design needn’t cost the earth.” And this view could well prevail across many businesses, judging by the small design budgets.

However, another marketing manager, working in the financial sector, admits: “With a smaller budget than our competitors, it’s difficult to use design as a source of competitive advantage.”

Nevertheless the survey shows that most respondents do think design is important to their competitive advantage. More than half (52%) believe that good design is ’very important’ in order to be competitive and 42% believe good design to be ’somewhat effective’ in terms of their competitiveness. However, most say they do not measure the effectiveness of design.

graph2

This may go some way to explain why budgets for 2011 are so low. If marketers can’t justify to the board how design is boosting business, then it might be difficult to justify big budgets.

Those marketers who do measure the effectiveness of design use a variety of methods. A marketing and PR co-ordinator from a not-for-profit company says the design budget at the company is allocated to outdoor poster campaigns and leaflets. The marketing department “measures how visitors hear about us through market research”. They add that outdoor advertising always measures very highly in terms of return on investment when the company undertakes this type of research.

Many marketers say that it is difficult to separate design from other elements of marketing and for this reason it is difficult to assess its effectiveness. One respondent says: “Campaign return on investment is measured, but not the design element, specifically.” Others say the only way they assess the effectiveness of the design spend is by general brand tracking studies that they run on a regular basis.

One design agency says that the introduction of QR codes has helped it to determine which of its posters are ramping up customer engagement but in general, it seems marketers find it difficult to assess design on its own merits, because elements of design pervade all marketing activities.

But, despite being unable to measure clearly the effectiveness of design, 10% of respondents believe that the creative discipline offers ’very good’ return on investment, compared with other marketing investments, while 39% believe it offers ’good’ returns. Many (42%) believe design is ’on a par’ with other marketing investments.

83% of respondents to the survey believe that good design is ’very effective’ or ’somewhat effective’ at improving overall customer experience

So, it seems that, although budgets are scarce this year, marketers and marketing directors across the sector appreciate the value of good design. One agency respondent says that its clients “are more design-aware and are pushing the boundaries for more creative, show-stopping trophies to reflect their brand values”.

In contrast, another respondent from the manufacturing sector says that 2011 is the year design “needs to distance itself from the idea that it is exclusively about fashion and style”.

Summing up, one global marketing director says: “More than ever before, we are seeing simplicity as a fundamental driver of design. Perhaps we now have an ’Apple mindset’, in which all design needs to function without an instruction manual. Time-constrained consumers don’t want to take time to figure products out.”

While most businesses will be investing in making sure their brand stands out this year, it is budgets that will determine how businesses use design. One optimistic respondent says: “In certain markets the need to differentiate in order to gain competitive advantage will drive up investment in design.”

But many, it seems, will be trying to gain competitive advantage by producing design on a shoestring budget.

What will your design priorities be this year? (all that apply)

Website design or launch 65%
Product design or launch 39%
Service design or launch 38%
Logo design or launch 22%
Packaging design or launch 21%

Key findings

41% of respondents say they manage design within the marketing department. It is evenly managed in-house and externally by briefing out to an agency or consultancy.

40% of respondents say their design budget will be under £50,000 this year. Just 5% say they have between £501,000 and £1m to spend. Only 1% say they have plans to spend over £51m.

71% of respondents think that design is very effective at improving brand perception, while 67% say design is very effective at helping their brand stand out from competitors’ products.

8% of respondents say that design is very effective at justifying price increases, whereas 30% believe that design is very effective at increasing
sales volumes.

10% of marketers say design produces a good return on investment, while 42% believe that the return is on a par with other marketing investments.

Viewpoint

ANDY

Andy Knowles, Chairman, JKR

Distinctive design is the foundation on which strong brands are built. The results of this survey demonstrate that marketers really do value what design can do for their brands.

What this study confirms is that design can cut through the clutter of a crowded marketplace, helping a brand to stand out.

Design has an ability to protect pricing in a climate of discounting and almost all respondents in this survey agree that, if businesses can employ effective design, then they can create desire - and consumers will pay a premium for desirable brands.

But design is not just about making things look attractive. Many marketers credit design with improving the overall customer experience.

Increasingly one of the things we are doing as a packaging designer is thinking about the customer journey - from product development right the way through to the selection of the brand by consumers and then the way that product is used at home.

By tracking a brand journey in this way we can start to improve the functional performance of the product, its ability to be seen and chosen on the shelf, its ease of use in the home, and even reduce its impact on the environment.

So the role of design can be about improving the entire experience consumers are having with the brand.

While the figures in this survey are exceptionally high regarding how marketers rate the effectiveness of design, the budgets that businesses say that they are allocating to design this year are remarkably low, which is rather disappointing. There is a real risk that people are under-investing in design. The evidence is that design creates desire and generates good business results, so shouldn’t businesses be asking “how much should we be investing in design?”, instead of asking “how little can we spend on it?”.

We are living in a very multichannel market where marketers are using everything from digital and social media to traditional advertising to sell their wares. What we are seeing at JKR is that businesses are using design as the glue that holds everything together. Marketers should be using design to reach out to consumers at every touch point.

Readers' comments (5)

  • Missing a "1" on the first chart? (neutral on the instinct vs. customer insight)

    Or was this part of the design?

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  • The problem is senior managers and the people signing off payments who have no input in the design deciding for marketers - or procurement people dictating budgets (a sin).

    This said, just like with PR and copy writing, people will always have an opinion on design and and think they know (or can do) better. That's when they begin to undervalue design - hence your problem of having all the appreciation in the world, yet not wanting to pay what it takes to get it.

    There is also the problem of designers who charge WAY too much for what they do/can do. One bad example can affect buying habits and does the next (good) designer out of some work.

    Overinflated rates are the direct result and correlation of, overinflated egos.

    Designers and copywriters are chief offenders where this is issue is concerned and EVERYONE knows it.

    Just a shame about those bad experiences.

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  • A lousy designer charging top rates won't get much work, while a great designer giving it away cheaply will soon become frustrated by clients undervaluing his/her work. It's not about ego, it's about talent, same as in every other profession.

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  • as a freelancer i look around to see if some company might be hiring a designer. what boggles my tiny mind is that they are "offering" to pay $8 - $15 / hr. Are they expecting illegal immigrants to respond to the ad? I don't get it. When I hand potential clients my schedule of fees, i see the eyes become glassy and their stomach rolling over and over. But, they have a 1,000 page website that looks like Roseanne Barr designed it.

    Your first statement was right: We all love (but don't want to pay for) good design.

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  • As product designers, who also regularly get involved in graphics and branding, we are heavily involved in the value good design can bring to business at every level, and we all feel very passionately about it!

    Spending a sensible amount on developing a product and its associated branding and marketing can exponentially affect the end saleable item, and there are 1000s of examples we can use to demonstrate this of course!

    However, it is always very hard to convince an MD or senior manager, even with so many crystal clear examples, that spending £1000s on design will result in £10,000s in return on investment. As a previous person commented, what we do is creative. On the most basic level, even the most modest Joe Public would like to think at the back of their mind that they are creative in some way, so paying out money for someone else to be creative pains many people.

    Tie this in with the current knee-jerk 'budget tightening' for short term gain, and we quickly see that long-term results from design investment are not even getting considered in half the projects we are presented with, compared to 10 years ago.

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