I was reading this article from InVision about estimating the ROI in design, and it reinforced that good design does have a quantifiable benefit.
Sometimes spending money on design-related products or services seems like a bonus, used when a company has extra room in the budget that allows for the splurge. It’s seen as something that doesn’t add real value but simply makes something look nicer/more professional. While to a certain degree I can understand this line of thinking and can legitimize it in a few areas (ie, I don’t choose a plumber based on how nice their website or business card looks), there’s oftentimes more cases where good design either increases profit (combined with good marketing and promotion) or saves money.
I wanted to modify InVision’s example from the article and create another hypothetical scenario. Suppose I was tasked to create a design system for a mid-sized company. This project has a three-fold purpose: (1) to reinforce their brand identity, (2) streamline their efforts when creating new visual collateral and (3) drive sales.
How a design system could decrease costs:
| STATUS QUO | IMPACT ESTIMATION | |
|---|---|---|
| Time to create one new design component | 1h | 25% reduction |
| Design hourly fee | $50 | $50 |
| Number of designers | 3 | 3 |
| Hours spent on design components per designer | 100h | 75 (100 – 25% reduction) |
| Design hours per month | 300h (100h x 3) | 225h (75h x 3) |
| Monthly cost | $15 000 (300h x $50) | $11 250 (225h x $50) |
| YEARLY COST IMPACT | -$45 000 | = ($15 000 – $11 250) |
A more streamlined desin process would save time. If this hypothesis is correct, a design system would save 25 hours per designer per month. If their in-house creative team has 3 designers, this equals $45 000 in saved time in a year.
Here’s the second hypothesis:
How a design system could increase revenue:
| STATUS QUO | IMPACT ESTIMATION | |
|---|---|---|
| Customer base | 500 000 | 500 000 |
| Monthly subscription rate | 2% | 2.5% (0.5 pp increase) |
| Paying customers (monthly) | 1 000 (2% x 0.5M) | 2500 (2.5% x 0.5M) |
| Yearly revenue per premium customers | $100 | $100 |
| Yearly revenue | $100 000 (1 000 x $100) | $250 000 (2 500 x $100) |
| YEARLY REVENUE IMPACT | +$150 000 | = (0.25M – 0.1M) |
If the design system increases the conversion rate by 0.5 percentage points, the company would stand to gain 1500 more customers and raise revenue by $150 000 in just year one.
Together, these two hypotheses conclude that implementing a design system could equate to a $195 000 opportunity.
Wonder if your company can benefit from some thoughtful design? Contact me and find out if the journey can pay for itself.