The value of design

The costs and benefits of a design partner in new product development

When you invest money, the return on your invest is the most important variable. When you invest in Product design during new product development you want to know what you are getting for it. Here is an outline.

We understand design as a strategic approach to transforming an idea into a compelling value proposition to enrich the customer experience. But why is this approach or service valuable and what is the reasoning behind the costs of design? In order to answer this, we put together some sources who tackled these questions and summarized the most relevant hypothesis:

1.   A design partner isn’t as costly as you might think!

The costs for design correlate with the complexity of the project and its industry, the importance of risk management, the level of innovativeness and the desired ease of use of the solution. The higher these are, the more expensive it gets. Fun fact: The same reasoning applies to your chances in these kinds of projects though.

But more important about your expenses for a design service is what you get for it, right? At this point we are still focussing on the costs of product development. You need to differentiate between direct costs of design and the costs that design can spare you. Besides of the bill for the design services…

  • You will get a smooth, consistent and structured project process, due to the designer’s experience in project management and developing products.
  • You will free up time for your own staff, who would otherwise focus on the work you hired the designer for.
  • You will get a solution which is designed for manufacturing. This will cut down time to market, reduce complexity and lower unit costs.

“Together with Noto, we developed a compelling design language for the brands within the Vaillant Group. The result is a brand-specific vision for all product categories. In addition, we managed to improve acceptance amongst our customers while simultaneously optimising production costs. This shows that design can be more than just an aesthetic solution.”

Dr. Andree GroosManaging Director of the Vaillant Group

Depending on the project setting (industry, complexity, goals, project scope) the design partner is able to compensate his own royalties…in some settings savings might even over-compensate the up-front design spending. The aspect of the cost of product development is one side of the coin. But design has a far more important implication which is focusing on the revenue site of the development process.

“With the PFA quick release tensioning system, Noto developed a patentable unique selling proposition for us in the saturated avalanche probe market. After the comprehensive implementation of the solution in our avalanche probes, we were able to raise our market share from 18% to 24%. The Noto approach of generating value for our users as well as our company is enough of a reason to further develop this cooperation.”

Dieter KotlabaHead of Hardware, Ortovox

2.   Design is a fundamental influencer of a products success!

You might think designers primarily focus on creating and crafting a solution. But they also connect the right dots in the entire solution-space and communicate possible ideas or solutions. This includes not only understanding the user. It includes understanding your customers, your business and the constraints in the world. It is a holistic approach to shape every designable aspect of a solution and ensure a strategic fit.

But what do you explicitly get, when you invest in a designed solution? You will get a higher product quality, which leads to a higher product value and to a price premium you can get from your customers. We believeso, because…

  • Your solution will be developed based on deeper customer insight centering their needs and desires, enhancing customer loyalty. Read through our project with Vaillant to get an idea.
  • Your solution will therefor also have a better usability and experience. Read through a project we work on with Schwank.
  • Your solution will differentiate itself from your competitors and attract new customers. We helped a medium-sized company to maintain market leadership through differentiation.
  • Your solution will seamlessly reflect your brand and make you more visible in competitive markets. Read through our projects with Swisscom to create a cohesive design language.

These reasons increase your perceived product value and therefor the likelihood that your new product or service will be successful in the market. Once the higher product value outperforms the additional cost, you will get a positive return on your design investment.

3. Take design to a strategic level

By integrating design into your strategy you can embrace the full spectrum of the possibilities it provides. Even beyond developing a new product or service. Design can help alter your companie’s perspective to a more user-centric approach on solving problems. It helps creating integrated ecosystems of different products and services, provide creative directions in developing your product portfolio or identifying new business opportunities.

Have a look at our partnerships with Heimplanet or Kapten & Son to get a feeling what strategic design can achieve.

Starting with a single project will help you understand the value design can provide and might open up a new perspective on developing a new product or service.

„The more strategic business’s make use of design, the greater the benefit.“

British Design Council

List of sources:

The British design council frequently demonstrates the Value of Design:

McKinsey is centering the creativity as a key asset for success.

Short Video-Clip about “The value of Design”

VDID explored several aspects of the impact of design.

Read through this short article focussing on designing experience.