Calculating the ROI & ROE of Design

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I have been doing extensive research how we can calculate an intangible things which have so much impact on tangible and intangible things, some points you may has come across and some would be new to it, but an amalgamation of measured proportion would help you not only measure your ROI but also would help you decide creatively how you can use this to your optimum use. Hold Tight folks, this will be a longer article than normal, so just bookmark it if you aren’t ready to stumble into it quite yet.


Measuring ROI & ROE


In today’s fast-paced world where consumers have the option to ‘dump’ you for the competitor, brands are working overtime to ensure audience retention. Even if one isn’t a customer, ‘following’ a brand on social media means that I trust them, that they interest me.

This is where design comes in – holding the attention. As attention spans decrease from 3 seconds to a mere second, the onus is on the brand to create the impact. And, this is where Return on Investment and Return on Experience come in.

It seems like a mammoth task, to quantify the ROI and ROE on ‘design’. You may not have heard of this concept till now either. But as businesses grapple with the reality of hiring designers to create their presence, it’s all the more important for designers to hold their ground and quantify their work.

“Design is rooted in empathy more than in technicality”, says Pravanjan, co-founder of Palette69. While it may seem design is subjective, here’s a truth bomb – it really isn’t. Good design speaks to one and all. Humans are wired to be attracted to certain things. The magnitude of attraction and attention may differ, but good design always sticks.

Design isn’t just seen as aesthetics and vanity anymore, but instead as an incredibly powerful way to attract customers. With everyone living, breathing, and eating social media, there is no option but to hop on the bandwagon. The right plans and strategy can prove to be a boon as a way of staying connected with customers. When you invest in good design and when the world sees drastic change, your audience senses that you care. They see your brand making an effort to be better, and serve the customer better.


Understand your stakeholders

The key to understanding HOW you calculate the ROI & ROE on your design is to crack the code on your stakeholders.

  • Who’s going to be using these metrics to define the outcomes of design?
  • How do they perceive design, social media, or other ‘new’ concepts?
  • What can they do if they are not satisfied with the Returns?

When you put yourself into the Stakeholder’s shoes, many things become clear – they only see what is shown to them.

Focus on goals, not data

Answer the question: What are we trying to achieve here?

Define the metrics that will help you ascertain your distance from reaching your goal. Define them clearly and be as specific as possible, so as to get a clear picture of what kind of result is expected from different kinds of work. They should convey meaning, be linked to outcomes of business, and most importantly – you should be able to quantify them.

Now, for example – while ‘followers’ on social media have no quantifiable value per se, what you can focus on are conversions. Say, a Personal Branding Expert spent Rs. 500 on targeted advertisements for two weeks, which brought in 5 new clients in the following month. Clearly, the image and text conveyed the right message and got people to appreciate your product/service.

Hence, Rs. 500 + Rs. 500 (Designer’s fee) + Rs. 200 (Writer’s fee) = Rs. 1200, raking in profits above Rs. 10,000.

Context Prompt Vs Action Prompt

Social scientist from Stanford University BJ Fogg predicted the future of marketing and content would be more based on prompting the ‘action’ rather than establishing ‘context’. Context prompts are where we prompt or bombard the customer via social media, emails, cold calls, etc. This technique is slowly declining – as the timing of the context may not be right and because the customer has the liberty to skip this, like an unpleasant ad while you watch your favourite TV series (Much like Netflix)

So, what is an Action prompt?

Say, you’re trying to get patients to measure their Blood Pressure once a day. Rather than relying on context prompts (a reminder from someone, or even notifications through an app), you find the 3 most frequent times when patients check their BP. You then use these Anchor points to tell the patients that most of those who are effective in checking their BP daily usually do it at these times. The patients can then select a time frame that fits easily into their daily schedule.

Identify where you need to start implementing more Action Prompts by assessing leads generated through various channels and comparing with industry standards and competitors.

Measuring Consumer Sentiment

Net Promoter Score (NPS) and Customer Satisfaction (CSAT) are two common measures of consumer sentiment.

CSAT targets direct satisfaction with the question, “Overall, was I satisfied with the product/service?”,.

NPS measures loyalty and promotion with the question, “How likely are you to recommend our product/service to your friends and colleagues?”

This shows a clear difference between HOW you ask a question, and WHAT you ask. Both the HOW & WHAT need to align to get you a high NPS. Hence, if your questions target the two extremes of the spectrum, the audience in the middle will automatically react as desired thanks to the strong message.

Consumption Vocabulary

“The answer you get depends on the question you ask”. Behavioural Science helps us guide the respondent by making it easy to answer, whether it be by providing options, or by using visual elements. This makes the task more appealing and economizes on time. Consider the example below:

Such consumption vocabulary can not only help you in understanding the NPS (Net Promoter Score), but also help you reach a wide range of customers.

Use your design superpowers to bring the numbers to life.

Use storytelling to communicate your results instead of plain numbers. More often than not, it may seem underwhelming – to have put in so much time, energy, and money only to get meager results. The value of design is entwined with everything – especially goodwill. Just as you value goodwill in your Financial books, we’ve got to add a value to design too.

Bring these results to life by guiding stakeholders into shifting from the conventional mindset. Go beyond just telling these stories: Show them. Live them.

Convert metrics into the KPI

Calculating ROI & ROE is basically converting units. You’re taking one unit (for example, the average number of leads generated through a social media post) and turning it into another (monetary cost savings in terms of travel, pitch, etc).

The question is to be approached with the idea of logically converting a traditionally ‘non-numerical’ area into measurable figures.

Hypothesizing with numbers to predict the Impact

Examples of KPIs:

  • Profit
  • Cost
  • Customer Lifetime Value (CLV)
  • Employee-Turnover Rate (ETR)
  • Employee productivity
  • Donors & donor growth

Alen Faljic (Founder & CEO, d.MBA) quantified certain KPIs into metrics as an example. This real time data on the increase/decrease in resources like time and costs, and the amount saved.

While it seems daunting and (maybe) too much of a hassle, give it a try. Let it challenge you. ROI & ROE estimates help you understand where your designs excel, and where they can improve. These measures also give you real-time data on which designs work for which kinds of audiences. As a designer, these metrics should be secondary. The primary focus is and should be the user experience, brand and empathy. Using data and numericals will only help in accentuating your knowledge and expertise.

Writing credit – Avni. K

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