The connection between design and revenue isn’t always apparent to business stakeholders. While designers understand the impact their work has on the people who use their products and services, they often face the challenge of articulating this connection to the bottom line.
Effectively conveying the return on investment of good design is crucial; it helps align design decisions with business objectives, secures necessary resources and fosters a culture of collaboration and mutual understanding.
This article provides designers with a robust strategy to effectively communicate the role and importance of design in driving revenue. It serves as a guide to ensure that the critical value of design is appreciated and capitalized on, creating an environment where design is integrated into business strategy.
Start with Understanding the Language of Business
As a designer, your expertise might lie in the realms of user interfaces, creative problem solving and visual aesthetics. However, if you’re going to effectively convey the financial impact of your work, you’ll need to develop proficiency in the language of business.
This means understanding key concepts, metrics and terminologies used at your organization. This can seem daunting initially, but it is a critical step in bridging the gap between design and business.
Think of business terminology as another tool in your arsenal. Conversing in this language allows you to articulate your work’s value in terms that stakeholders can appreciate and understand.
Knowing how to speak about ROI, conversion rates, churn rate, etc., enables you to draw clear lines from your design decisions to revenue generation.
For a deep dive into understanding the language of business, enroll in Pragmatic’s Business Strategy & Design Course
3 Strategies to Quantify the Impact of Design on Revenue
Increasing Conversion Rate
Conversion rate refers to the percentage of the website or app visitors who take a desired action or “convert” based on the defined goals. This action could vary depending on the specific objectives, such as making a purchase, filling out a form, subscribing to a service, or completing any other predetermined goal.
The conversion rate is calculated by dividing the number of conversions (desired actions) by the total number of visitors and multiplying the result by 100 to express it as a percentage.
Design projects require time, effort, and resources. Conversion rate helps designers demonstrate the ROI of their work by linking design improvements to revenue generation.
Step-by-Step Guide to Demonstrate Conversion Rate
Step 1: Establish Conversion Goals
Collaborate closely with the product team, marketing team, and leadership to clearly define the specific conversion goals.
Step 2: Implement Conversion Tracking
Work in collaboration with the development team to implement conversion tracking. This involves incorporating tracking codes or setting up events to capture user interactions related to the defined conversion goals.
Step 3: Design Variations
Develop distinct design variations that are expected to have a positive impact on the conversion rate. Ensure that each variation can be tracked separately.
Step 4: Conduct A/B Testing
Conduct A/B tests by randomly dividing the audience into groups, exposing each group to a different design variation. Monitor and record the conversion rates of each group during the testing phase.
Step 5: Analyze Results
Once the A/B test has concluded and you’ve collected sufficient data, analyze the results to determine the impact of design on conversion rates.
Step 5: Calculate Conversion Rate Lift
Calculate the percentage increase or decrease in conversion rate for the winning design variation compared to the control or original design. This conversion rate lift quantifies the impact of design on improving or diminishing conversion performance.
Step 6: Calculate Revenue Impact
Collaborate closely with the business team to determine the average revenue generated per conversion. Multiply the conversion rate lift (expressed as a decimal) by the average revenue per conversion to calculate the revenue impact attributed to the design changes.
Improving Customer Feedback
By actively listening to customer feedback and making iterative design improvements, designers can enhance user satisfaction, increase conversions, and drive revenue growth. The feedback serves as a crucial feedback loop, allowing designers to align the design with user needs, preferences and business objectives, resulting in improved financial performance.
Step-by-Step Guide to Quantifying Customer Feedback
Designers are excellent at empathy for the user, but that is challenging to quantify. Here is one method for measuring feedback and its impact on revenue.
Step 1: Categorize and Tag Feedback
Organize customer feedback into relevant categories or themes. For example, categorize feedback on design elements, user experience, services or specific features. Assign tags to each feedback item to facilitate analysis and comparison.
Step 2: Quantify Positive and Negative Feedback
Assign numerical values to positive and negative feedback to quantify sentiment. For instance, rate positive feedback on a scale of 1-5 or assign a positive sentiment score. Similarly, rate negative feedback to quantify its severity or impact. This quantification helps establish a baseline for analyzing the overall sentiment of customer feedback.
Step 3: Correlate Feedback with Revenue Data:
Identify patterns or correlations between specific feedback themes or sentiments and revenue data. Analyze revenue trends, such as sales volume or growth, and identify periods when customer feedback showed notable changes. This correlation strengthens the link between customer feedback and revenue impact.
Step 4: Calculate Revenue Impact
Quantify the revenue impact of customer feedback by comparing revenue metrics before and after addressing specific feedback points. If you made design improvements based on feedback, track how those changes influenced revenue performance. Calculate the revenue difference or growth percentage to attribute the impact to customer feedback and subsequent design modifications.
Conducting Competitive Analysis to Increase Market Share
Competitive analysis encourages designers to explore new design ideas and innovative approaches. By studying competitors, you can identify gaps or areas where your company’s design work can differentiate and provide unique value to customers.
Innovative design that stands out from the competition can attract more customers, increase market share, and drive revenue growth.
Step-by-Step Guide to Competitive Analysis for Designers
Step 1: Identify Key Competitors
Begin by identifying the key competitors in your industry or market segment. Research and select competitors that closely align with your business model, target audience or product offerings.
Step 2: Analyze Competitor Metrics
Gather relevant metrics and data about your competitors’ performance. This may include metrics such as market share, revenue growth, customer acquisition rates, conversion rates or customer satisfaction ratings. Quantify these metrics for comparison and analysis.
Step 3: Identify Design-related Factors
Identify design-related factors that may contribute to your competitors’ success. These factors could include website design, user interface, product packaging, branding, visual identity or overall user experience. Analyze how these design elements influence customer perceptions and drive your competitors’ revenue growth.
Step 4: Benchmark Design Elements
Conduct a comprehensive benchmarking exercise to evaluate and compare your design elements with your competitors. Analyze the strengths and weaknesses of your competitors’ designs, identifying areas where they outperform you or where you excel.
Step 5: User Testing and Feedback
Conduct user testing and gather user feedback to gauge the impact of your design elements compared to your competitors. Quantify the feedback received by categorizing it into positive, negative or neutral sentiments.
Step 6: Conversion Rate Comparison
Compare your conversion rates with those of your competitors. Analyze whether your design elements positively or negatively affect conversion rates compared to competitors. Quantify the difference in conversion rates to establish the impact of your design elements on revenue generation.
Bridging the Gap Between Design Decisions and Business Outcomes
To connect design decisions and business outcomes, familiarize yourself with the company’s business strategy. Understand the target audience, the company’s unique selling propositions (USPs) and key performance indicators (KPIs).
Once you’ve done this, you can map how your design decisions influence these factors. For instance, if the company aims to reduce churn rate, focus on how your design can improve user experience, increasing user retention. To increase market share, consider how your design can enhance the product’s appeal to the target audience.
As you make these connections, document them. Keeping a record of how each design decision influences business outcomes can be incredibly helpful when explaining your work to stakeholders. It allows you to present a clear narrative of thoughtfulness and strategic alignment, demonstrating that your designs are purposeful and effective.
Aligning design goals with business objectives facilitates effective communication with stakeholders and enables the seamless integration of design into the business strategy. This alignment strengthens the pivotal role of design within the organization.
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Learn More By Enrolling in Business Strategy & Design
Want to increase your business acumen and confidently communicate with key stakeholders in your organization? Pragmatic’s Business Strategy & Design course is built by designers for designers. You’ll learn how to translate your company’s strategy into design priorities, measure impact, balance desirability with viability and communicate the business value of design.
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