We recently explored the business value of the design mindset – an approach that prioritizes holistic design that encompasses not only product design but process design and more. Companies that treat design as an ongoing creative process spanning the entire organization see tremendous benefits. In fact, a recent study by the Design Management Institute and Motiv Strategies found that an initial $10,000 investment in design ultimately created nearly $40,000 in value over the following decade.
How exactly does design deliver this value? For consumers, it’s obvious – good design enables a seamless user experience, which makes products both effective and easy to use. For businesses, there are larger questions. What exactly is “good” design, and how can it be quantified and consistently achieved?
Let’s take a closer look at the steps companies can implement to achieve “good” design.
The Design for Value and Growth Model
In an article published by McKinsey & Company late last year, the authors assert that “Customer choice has never been greater, so terrific design is essential for outstanding products and services—and to build lasting customer relationships.” In a time when consumers have never had greater access to products built around the globe, design is a powerful differentiator between two products that may achieve similar results. Design is also a “hook” – providing unique attributes that, when they resonate with customers, create brand loyalty and add value to the product.
The most successful designs,” McKinsey notes, “achieve this growth in a commercially viable way by juggling the trade-offs of maximizing customer value within constrained costs.” For decades, most companies weighed design alongside price, prioritizing design only when it reduced the manufacturing cost and resulted in greater profit margins. This mindset is beginning to shift, as “design for value and growth” (D4VG) provides a new model with noted success.
A major pioneer in the D4VG paradigm was, of course, Apple. Consider the iPhone: the initial expense of designing the first generation iPhone was a major risk that may not have ultimately paid off. However, by front-loading investment in effective, innovative design, Apple created a product that revolutionized the cellphone market. Subsequent iterations of the product each benefit from that initial investment, allowing for incremental redesign and additional features that improve on the initial model while cutting costs associated with design and manufacturing.
This approach can only be successful when the initial investment results in a well-designed product with the potential for further iteration. So how do companies approach the design for value and growth process to ensure success?
Leading with Customer Insights
Too many companies have poured money into new products and features only to discover that there is no market for the result. To avoid this, McKinsey asserts that “Critical to D4VG is a set of six next-generation customer-insight tools that… provide a more sophisticated way to look at customers’ behavior and assess their reaction to different product features.” These include tools that guide the development process through consumer insights as well as test the end result for consumer reactions to new design features and how they impact perceived value.
First, it’s crucial to understand what the market wants from a new product. McKinsey suggests “use it or lose it analysis” to determine which features consumers consider most important, which allows companies to prioritize investment in those features and limit the cost of those that wouldn’t make the final cut. In addition, buzz analytics can help companies understand which features consumers are excited about and which are considered integral to their brand. MaxDiff surveys provide deeper insight into the relative importance of various features for a well-rounded understanding of what consumers value most.
Customer insight isn’t just a starting point, however. Once a product prototype has been developed, continued testing is necessary to ensure good design. McKinsey stresses the importance of technical testing “to clarify the performance-versus-cost trade-offs of design choices” and ensure design-to-value balance. Product testing is also vital, and McKinsey suggests mock shopping experiences, which provide insight into consumer recognition of design and value. After all, consumers shouldn’t notice the effort put into product design but they must value the results.
“Good” Design is Fluid but Achievable
These tools, when deployed throughout the product development and testing phase, can help companies stay on top of consumer trends and preferences. “Good” design has some evergreen principles (ease of use, effectiveness, etc…) but also many metrics that change alongside the larger culture (color/style preferences, technical specifications). By prioritizing customer insights, companies can ensure that they’re building products that will resonate with consumers today and into the future.
“Good” design isn’t a given, but it is achievable. There is no ultimate formula for guaranteed success, but research proves that it’s far better to invest in good design than attempt to succeed without it. For those companies that value design, these tools provide a strong foundation for understanding the market and finding success through the design for value and growth model.