What value does design and branding have for a company?
It is well known that marketing activities carried out by a company directly translate into sales of its products or services and increased revenue for the company. But what else influences the success of a brand, what can encourage potential customers to buy or use the offer of a given company? Undoubtedly, its image!
Is it really that important?
So how to create it, what elements make it up, what to remember and what to avoid? How to check if the design is good and will have any value? The process of branding, i.e. creating an image and brand awareness, poses many questions at the beginning. Entrepreneurs often wonder whether they need branding at all – after all, their product or service does not need a special setting. Let’s get this straight right away – this kind of thinking is wrong. How do branding and design affect business results? You will find out in this article.
Brand image is of key importance
A quick test to start. Which product from the shop shelf will you reach for first? The one you know well, with an aesthetically pleasing label that conveys key information in a way that’s attractive and clear to you, or the one that doesn’t have polished packaging, doesn’t look very good and you’ve never heard of its manufacturer? We all know the answer to this question! So what is the advantage of the first product over the second? When you look at the first product, you get the impression that it is of better quality and has been created by professionals, and you have a positive feeling and more confidence in it.
This is evidenced by research conducted by A. Dziadkiewicz in 2019 on a group of 595 respondents of different ages. When asked whether packaging influences their purchase process, the vast majority (91%) answered in the affirmative (A. Dziadkieiwcz, “The importance of packaging design in the consumers’ purchase decision-making process”). The graphic below shows the elements that are most important to consumers, divided into age groups (generation: X – born 1964-1980, Y – born 1981-2000, Z – born after 2001).
There is a clear conclusion to be drawn – good design is the key to business success. It can increase customer satisfaction, boost sales and help create business value.
Brand image drives consumer behaviour and influences their buying habits. A brand is much more than a familiar name or logo that identifies a company, product or service. A brand encompasses the consumer’s complete experience with both the product and the company and the mix of associations that are formed through these interactions. “The synergy of the impact of the experience and the messages sent from the company to the recipients results in the creation, consolidation or modification of an attitude, which becomes the foundation for motivation, which in turn leads to the act of purchase” (Dr. A.Wiśniewska, “The mechanism of brand image impact on consumer behaviour”).
A positive brand image builds customer loyalty – once someone has reached for your product, which meets their expectations and arouses positive emotions in them, there is a high probability that they will do it again and recommend it to others. As P. Stodulny writes: “While company profits come from loyal behaviour, loyal behaviour comes from a state of mind”. (P. Stodulny, “Analysis of satisfaction and loyalty of bank customers”). Brand image is, therefore, a powerful tool for gaining market position. The graphic below presents factors that shape customer loyalty (based on the EPSI model – European Performance Satisfaction Index):
In some situations the market may be primarily price-driven, meaning that the company with the lowest product prices will have the largest share. However, with the influx of new brands into the market, more and more consumers are making purchasing decisions based not on the product itself, but precisely on how they feel about the brand – and they are not purely rational (not maximising savings).
There is evidence of this in the soft drinks industry, where, for example, the Coca-Cola Company and PepsiCo, Inc. are able to compete with cheaper versions of carbonated drinks made using the same ingredients.
Integrated marketing and branding strategy
The most effective way to increase a company’s market share is to create an integrated marketing and branding strategy that first aims to attract new audiences and then convert them into returning customers.
How do you make a name for yourself in the minds of consumers in your target group when the market is saturated with similar products and services? You need to stand out from the competition! How do you do that? You can do it by creating coherent branding, based on a well-thought-out design, conveying the values and personality of the brand and showing the ability to evolve quickly to meet the needs of your target group.
A coherent visual identity makes the brand recognisable in many channels. Consistent branding, used on websites, on product packaging or in marketing materials, creates a stable environment around the brand, which the recipients know, like and willingly engage in interactions with. Recipients know how to find a product/service they are interested in or information about it/it and what to expect from it – without unnecessary distraction and confusion. And all this means that they don’t have to look any further – in fact, they will come back for more.
Good design and bad design
Logo, colours, typography, iconography, graphic elements, photographs, communication style. All of these will come together in materials that will form the basis of your branding and be used across multiple channels. How do we judge if the design is good and if the choices we’ve made are right for our brand?
Simply put – keep your target audience in mind. It is for them that your products are made and it is for them that you create your services. The design must suit them. It has to build positive experiences and satisfy their needs. If that’s the case, you’re on the right track.
Despite the obvious commercial benefits of designing great products and services, consistently doing so is extremely difficult and is getting harder and harder. Only the best designs are able to stand out from the crowd, given the rapid rise in consumer expectations or instant access to global information and reviews. These days, investing in good design is a must for companies.
This is borne out by research conducted by the McKinsey Company, an American strategic management consultancy. It tracked the design practices of 300 publicly listed companies over a five-year period in a range of countries and industries, and then analysed how this linked to each company’s financial performance.
A strong correlation was observed between investments in design and excellent business performance of companies, i.e. an increase in revenue of up to 32%. The results were confirmed across all analysed industries. This suggests that good design matters, whether a company focuses on physical goods, digital products, services or a combination of both.
In short, the potential for design-driven growth is huge, in both product and service sectors.
How to measure the value of design?
As mentioned earlier, design should be user-centred. Design brings value when it meets the needs of the target audience.
To eliminate the risk of poor design and costly mistakes, it is important to continually test, gauge reactions to the resulting product and listen to the end user. This approach to design requires gathering solid customer information. But it’s worth it. It has been proven that even a small design change that improves the user experience can have a huge impact on increased sales.
Measures of design
There is no one-size-fits-all key to assessing the value and effectiveness of design because every company is different. Some organisations look at user satisfaction, others at product response before and after redesign. However, experts explain that design KPIs (Key Performance Indicators) are not particularly different from business KPIs and measure what happens to be important – sometimes user experience, sometimes revenue. It’s all about context and business goals.
Design can be measured by indicators such as:
- evaluation of customer satisfaction and satisfaction after using the product/service
- customer evaluation of product/service usability
- retention – an indicator showing how many people return for a second purchase
- churn rate – shows how many customers stopped using the product or service after a certain period of time
- engagement metrics – help you understand how many people make more than one purchase
- time spent interacting with the product/service
- and many others.
The impact of design on business
There is no easy way to measure the impact of design on business. Especially as the role of design in business can vary from company to company. However, statements from experts confirm that design is an integral part of influencing a company’s performance and that if the design is good, you should be able to see how it positively affects business metrics.