The One Area Where Brands Can’t Afford to Cut Costs

Failed investment conditions, loss of money and costs, cutbacks, businessman holding scissors and cutting banknotes in his hands. stock illustration

By  Aaron Shapiro, Chairman and Founder, Product

Google and Microsoft just announced plans to lay off 10,000+ workers and they’re not alone.

Brands from virtually every segment – tech, banking, auto, media, CPG and more – have been hard hit by the economic downturn, which has led to layoffs, hiring freezes and budget cuts.

Virtually no departments have been spared from the belt-tightening, including HR, operations, engineering, marketing and even sales.

But as they look at their 2023 budgets, there’s one (somewhat unexpected) area brands shouldn’t cut: Design.

Whether it’s customer experience or product design, seamless and intuitive design has the power to transform a brand. Afterall, the most valuable company in the world – Apple – built its entire identity around great design.

Ironically enough, when surveying costs across their businesses, design may be on many brands’ lists of where to scale back.

Here’s why they shouldn’t cut design:

1. It’s your customer engagement roadmap; without it, you’re driving blind.  

One of the reasons many brands may look to slash design costs is because they have a poor understanding of what it is in the first place. Indeed, two-thirds of brand leaders say they don’t understand what their designers do.

Design is more than how an object looks and feels or the layout of an ad. Design serves as the plan for the entire experience a person has with a company or product—whether its customers (customer experience design), employee (employee experience) or other stakeholders.

Take customer experience for example. Design in this case covers every brand interaction a customer has. Every touch point must be perfectly tuned to the individual’s needs. Expectations must be anticipated and met. Every step of the way should be an effortless delight.

The end result is an experience that people love rationally, because it solves their problems and emotionally, because it surprises and delights.

2. It can be the north star for all other areas of the business. 

Companies that prioritize design benefit from a clear vision for the future – a north star for the target customer experience that everyone’s working toward. It’s an idealized future state that purposely ignores all of today’s technical, financial and organizational constraints.

This vision doesn’t have to come from a Jony Ives-esque design genius. It can be a simple, unifying statement or idea that captures what an organization is trying to achieve.

A clear design vision makes day-to-day decisions easier because everyone knows what they’re working towards. This can be incredibly helpful as brands decide where to cut costs. Areas that don’t make progress against the larger vision are the safest bet for near-term savings.

3. It can be an immediate differentiator in a competitive market.

Experience design is an iterative process – due in part to the fact that the consumer is trained by the best companies to expect more.

Imagine, for example, if every streaming platform took a few minutes to load. Customers will tolerate the inconvenience if it’s ubiquitous.  But the minute a platform reduces its loading time, it’s game over for everyone else. The consumer’s expectations have recalibrated and lesser experiences will no longer be tolerated.

Companies that have excelled in design understand that the best experience is worth 10x the second-best experience in their industry. They also know that good design can be difficult to achieve. But because the magic of perfect design is so rare, it can be a powerful brand differentiator. Customers will even tell the world about it (think Disneyworld).

4. Design drives short-term ROI.

Design isn’t just about long-term success. The best design iteratively improves every detail of the customer experience, all in service of driving more revenue and profitability.

Let’s say you are running a subscription business.  How much is a 10% improvement in conversion worth to your business? Conversion improvement like this is only possible with designers working to test different messages and conversion flows to see what moves the needle.

By setting clear KPIs and pointing designers towards improving those metrics, customer experience can be improved to produce numbers that will make a big difference, especially in a more difficult economy.

The bottom line

Brands are navigating the most challenging market they’ve experienced in a long time – if not since the start of their companies. They’re rushing to right-size their organizations and they’re focusing precious budget dollars on the areas that deliver the biggest ROI. The one area they simply can’t afford to cut during this time is design.

Those that make the mistake of doing so, risk weakening their customer experience, damaging their reputation and losing their competitive edge.

What’s the upside of maintaining a strong commitment to design?

Perhaps the best proof of the value of design is a study that found that design-driven companies outperformed the S&P 500…by more than 200% over a 10-year period.

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