How understanding business leads to effective and valuable design
🗓 27th March, 2020
Great design is great business
Businesses all over the world exist to serve customers, hoping that their offering will be valuable enough to generate long term profits. Design is a key component in the business process, it sits at the ‘junction’ were customer needs and business objectives meet to produce the goods that customers will ultimately pay for and benefit from.
The overlap of needs and objectives at the junction necessitates careful consideration towards two dependent yet distinct entities with different needs. This makes designing products a high stakes responsibility as it gives designers the capacity to help or else negatively effect customers and the business too.
As daunting as this may sound, it is equally invigorating. The same double edged sword allows designers to create solutions which benefit both parties, becoming a massive force multiplier of positive impact on the bottom line.
If designers are to become force multipliers of success rather than mishaps, they’ve got to empathise with both parties that meet at the junction; this is a requirement for long-term success.
Design that doesn’t improve business is risky
Design that doesn’t offer anything of value to customers and the business is simply an unnecessary cost and no business can run for too long with unjustifiable costs. If an idea doesn’t produce happier and more loyal customers, if it doesn’t enhance the brand position and product attractiveness, if it doesn’t help teams work and deliver more efficiently then design can be more of a liability than an advantage.
Lots of costs go into lifting product off the ground. There’s research, planning, discussion, coordination, designing, engineering, testing, marketing, support and more — all of which cost money. Hard work and risk of failure are both guaranteed (downside), however a successful outcome which benefits both the customers and the business (upside) are never guaranteed.
Good design minimises the downside and increases the upside by coming from a place of business consideration, strategy and lean methodologies. Bad design on the other hand increases the downside and decreases the upside as it generates overhead, new problems, and doesn’t aim to make the business better off.
Simply put, when designers ignore the business aspect, their work may become dangerous to the company.
The bottom line
Everything designers produce effects the bottom line, either positively or negatively, however, designers don’t need to be business gurus to make positive contributions. They simply need to have the same curiosity around business that they have around the customer experience.
The definition of the bottom line varies from project to project but typically boils down to money in, money out and customer satisfaction. Needless to say there should be many more times money in than out and of course money comes from happy customers who’ll pay for the product.
Here are some typical questions you might have heard at some point at the office which touched on the bottom line:
- Will customers gladly pay for this?
- Which category of customers will buy this?
- How much will customers pay for this?
- How often are customers likely to buy this?
- What will it cost up front to do this?
- What will it cost to run this over the long term?
- What additional costs will be incurred due to this?
- Will the income generated from this justify the costs?
- What problems will this solve for our customers?
- Do customers value this?
- Will customers choose our product because of this?
- Will customers stay with us longer because of this?
Having insights which accurately answer the questions above is great, however often times teams cannot sit around until weeks of research shed light on matters. Moreover, detailed insights are not always a bottleneck at all.
What’s most important is to figure ways to increase the money in, decrease money out and keep customers super happy.
With this perspective, you’ll likely land on green pastures.
Understanding the business problem behind the design task
Some design projects provide little or nothing of real value for customers or the business. When companies produce too many of these projects, they voluntarily spend time and money only to run the business rat race and end up with new problems. Such tendencies not only leave dents on the bottom line, they also create desperate situations and scenarios of firefighting for teams and future hires to address.
Every problem should map back to a positive adjustment on the bottom line if it is to be worth pursuing. Sometimes the bottom line is obvious but other times, designers may have to pull it out of stakeholders’ mouths before rushing to the drawing board. Whatever the case may be, designers can uncover the bottom line by asking good questions around what matters most.
Here’s how a conversation between a designer and a stakeholder might kick off:
Stakeholder We need a landing page.
Designer OK. Why do we need this?
Stakeholder We need more people to sign up.
Designer Great. Why are more signups so critical at this time?
Stakeholder Customers aren’t sticking with us lately, so we need new ones.
Designer Really? Why not?
Stakeholder We’re not sure. Maybe our site could look more modern?
Designer How many customers are we losing and how is this effecting us?
Stakeholder Almost half our customers leave after a couple days from signing up. At this rate we are not sustainable.
The example above illustrates how designers may be handed a solution with no clear context around the business problem. Rushing to produce the solution without understanding the business problem would mean running the rat race once again.
In the example, the business has a serious problem in retaining customers. The way this effects the bottom line is that the business is spending money to acquire customers but after acquiring them, they don’t stick with the product so the acquisition costs are barely recovered and additional costs must be incurred to survive. Can you see how ‘money in, money out’ relates here?
The designer may have designed a fancy landing page for sure, however the problem doesn’t appear to be around acquiring customers but around retaining them. Therefore, the designer would provide more business value by finding out why customers are abandoning the product in the first place so that something may be done to fix that. This approach would help:
- Improve customer satisfaction as the core problem would be addressed.
- Increase revenue as customers would stay longer and spend more.
- Make it more likely that future customers would stick, which would increase future revenues
The business problem behind each design task will vary and will require designers to ask good questions to uncover. On the other-hand, when it comes to brainstorming and iterating solutions, designers may think strategically by factoring in the same few things on each case.
1. Remember the business vision and strategy at all times
Every business has a vision of where it needs to go and a strategy for how to get there. Visions and strategies are not ideas that upper management pull out of nowhere one fine day; they’re based on things which need to be achieved if the business is to survive and thrive moving forward.
Understanding your company’s vision and strategy is critical, it puts things into perspective and helps you think how ‘you’ may help stir the ship forward with your next project.
As an example, let’s say your company has found product market fit years back and has reached maturity. The company now prioritises growth by expanding to new markets so it may reach new customers and increase market share. Now imagine you were asked to design a part of the product and in doing so, you made a proposal which totally changed the value proposition of the product. In your mind, you have an innovative idea which makes the product more interesting.
From a business perspective, upper management don’t see the point in becoming a startup once again by uprooting the value proposition, especially when the product works and customers are happy with it. Moreover, they realise that this new idea slows expanding to new markets down as the idea must be validated first, might fail and will cost large amounts of time and money. To top it up, investors are pressing down on management as they expect to see returns which justify their investment.
2. Increase or maintain money in, decrease or maintain money out
Every design project can make a contribution to the bottom line; at the very least, projects shouldn’t leave a dent on it. Before making a design proposal, it’s worth asking yourself if your idea will generate more revenue than costs or more costs than revenue. As you’ve already guessed, generating more costs than revenue would raise a red flag.
As an example, let’s say you proposed to offer live chat support on your landing page to be of assistance to visitors who may be considering registering an account on your product, were they may buy T-shirts. After shipping live chat, the support team report that they’re spending a considerable amount of their time chatting with visitors (many of which do not convert) and are left with less time to spend on solving problems for existing, and therefore valuable customers.
In your mind offering help could only be a positive thing but now the business is caught up with an increased downside with no worthwhile upside. In hindsight you realise that you may have provided help without the necessity of tying up a support team by launching an FAQ page instead.
3. Increase or maintain customer satisfaction
Remember that money comes from happy customers; anything which pushes customers away from using your product or which limits their ability to use it would qualify as a red flag. Designers have the tendency to think that their ideas are good ones and whilst this may be true a lot of the time, it may not always be the case.
As an example, let’s say you’ve just proposed a cleaner and minimalistic architecture for your site by removing some pages. After shipping the update, customers complain that they can no longer find some pages they used to before. In your mind you’ve simplified the architecture with aim of making the site easier to use, to the customer, you’ve taken away something of value and provided something which isn’t necessarily valuable.
The risks of ignoring the business side of design are real and they are hefty. Empathising with the business by employing strategic thinking can be the lifeguard that provides an added layer of safety and certainty.
Years back, companies relied on designers to create pretty much everything, these days however, design is being democratised which poses a few questions:
- What will designers’ role look like when technology makes it easy enough for any executive to do a fair design job in a fair amount of time?
- What role will designers play if they lack business acumen and also lose the advantage of being relied on to put product together?
If product designers are to remain relevant, they need to take ownership of their junction, ‘the junction were customer needs and business objectives meet to produce the goods that customers will ultimately pay for and benefit from’. Design may become further democratised, but it’s valuable enough for businesses to continue to depend on because when done right, design is a competitive advantage which helps businesses flourish.
In summary, here are some key takeaways I’d like to leave you with:
- Great design is great business.
- Design that doesn’t improve business is risky.
- Remember the bottom line: Money in, money out and customer satisfaction.
- Understand the business problem behind the design task.
- Remember the business vision and strategy at all times.
- Increase or maintain money in, decrease or maintain money out.
- Increase or maintain customer satisfaction.