Design - good design - contributes to the bottom line in two ways:
- the happy customer
- the repeat customer

A well-designed product will please people, whether through aesthetic appreciation or the fit of function to need, or by delightful surprise at the forethought that design embeds into the way that functions are performed.

Pleased customers are (finally being recognized as) extremely valuable business assets. They tell people about their experiences and spread knowledge and reputation. Pleased customers want to share their pleasure so they encourage their friends to try and buy the product.
“Viral marketing” is a dreadful buzzphrase but it points to a very real phenomenon. Conversely, bad buzz can kill a product, no matter how technically superior it may be.

Second, and in some cases more important, customers who experience good design tend to come back to the source of that design for the new version, for the upgrade, or for the next product they’re going to buy. In all businesses there is a “cost of acquisition” - what you have to pay to get that new person to make that first purchase. In some businesses the cost of acquisition is so high that the company pretty much loses money on the first sale. It’s only on second and subsequent sales that a company starts to realize real profit because all those “sunk” costs of acquisition are already paid.

If the business produces badly designed products that give lousy user experience then people will go elsewhere for their next purchase and the business will forever be paying acquisition costs for every one-time customer.

How do you measure it? The equivalent question is how do you measure the value of marketing. Mostly you don’t. You can measure the value of specific ad campaigns via various tracking techniques; likewise, you can measure the value of specific design decisions by things like user testing. But measuring the overall value of quality design isn’t really possible because you can’t set up comparable situations (product A was crap; we put all the designers on product B).
Likewise, you can’t really measure the value of specific economic strategies, education strategies, and so on. You look at aggregates and overall trends and in particular you look at what happens if you neglect it. From a business perspective neglecting quality user-centered design is like neglecting marketing.

But in all your frustration and eye-rolling, you didn’t answer his question. What *does* is contribute to the bottom line? How do you quantify the value?

One thing that I recognize for myself is that I don’t make purchasing decisions (or simply software use decisions, in terms of freeware and shareware to try) in a vacuum. I rely *heavily* on formal reviews and informal blog reviews and sometimes on personal interactions. If “design” has properly gone into a product, that will echo its way through those reviews, and in reverse, if design is lacking, I will either never hear about the product to start with, or everything I hear will be coated with “This product has some good strengths, but it’s handicapped by poor design. Wait for the next version, or try something else.”

So there’s one answer: good design affects who will talk about your product and how they will talk it up, and *that* affect the bottom line, both for the good and for the bad.

People make decisions based on emotion, then come up with logical reasons to support their choices. If your design appeals to emotion, you’ve got a leg up; you just have to demonstrate that you have the features to support their choice.

If your design is ugly, you have to hope that the more attractive competition is missing something that you supply, or the customer may never get around to evaluating your product.

From the software domain, some research indicates that aesthetics and usability affect the perception of each other (Ben-Bassat 2006). From a different domain, consider the research showing that attractive people are, on average, liked more by their peers and paid more by their bosses. (Andreoni and Petrie 2005). Functionality and usability are important, but aesthetics matter too.

Yet it was successful.

It was successful because those feature checklists actually DO matter. Our product solved technical problems that no one else could solve. Sure, it required a class and a troop of on-site support to get the thing to work… but that was still better than not solving the problem at all. So customers paid for it.

And the customers never stopped asking for the next set of new features they wanted. They complained about complexity, of course, but it didn’t seem to impact their buying behavior.

So why spend time and money on making the design better? And if you do, how do you show that it’s time and money well spent? Especially if you know that inertia will allow the product to continue to make money, which makes it even more difficult to tease out cause and effect.

Those are tough and legitimate questions. And would take more than a blog comment to answer. But IMO here are the “teaser” answers (which I’ll try to answer more fully later):
1. People care less about features and more about ease of use as a technology matures - differentiating based on features becomes increasingly more difficult.
2. You begin to self-select your customer base to be “people who can consume my product’s complexity” and pretty soon that becomes “my existing customers are the only ones I can sell to.”
3. Your support costs scale evenly with your customer base size, and you realize that there’s a ceiling to how much you can spend supporting each customer.
4. Complexity and utility can increase together for a time before they begin to have a negative relationship. It’s easy to miss the shift.
5. Your customers start to realize that going with the simpler “good enough” product that doesn’t solve all their problems is actually cheaper than going with your product, which solves all their problems but requires a bunch of staff to keep it running.

Actual Case which I’m working on:
Large Enterprise SW Application Suite, (more then 700 k users), which is now being redesigned:
1. Graphically,
2. Organizational
3. Interactively

The reason for the redesign is to “Sell” the app to more organizations, (get more $$$ = better bottom line).

Why do people buy better “designed SW”, with design being from a UI perspective…

People are emotional creatures, bosses like to buy good looking SW, (this is no joke, contracts are coming in quicker for us with the better look then they did with the old look, and the basic functionality is virtually the same). As well when end users get a say in the purchase process, they seem to appreciate aesthetics a lot, (it actually makes them happy/smile on first look of the app).

This is basic business theory “products that appeal emotionally tend to have greater success”, your friend is asking less then top notch business questions if this is a big surprise to him.

Rich Rogan
Sr. Interaction Designer
UX/UI Inc.

Regardless of whether an engineer does it, a product manager does it, or an experienced designer does it. When the widget you refer to is displayed on a screen, someone “designed” it.

So the question is not whether or not we need product design, the question is how good does your design have to be?

Do you want to deliver to market good products, good-enough products, better products, or world-class products?

Surely there are very successful business models for delivering cheaper copy-cat products. But if you want to be an industry leader, an innovator, a best-of-class product, you better invest in great design!

Too often product managers fall victim to “just bolt that feature on so we can get it out by the end of this quarter” to make sales happy and appear like the person who “got the job done”, only to ultimately create a house of cards that will never stand the test of time.

On “features as the reason why customers buy products”, well that’s just not accurate. People buy products they like and want — features are the checklist of minimal requirements the product must satisfy. True, on the surface, it’s all about “can it do this… and this…”, but underneath something much more complex is going on.

As for “prior success without great design,” — there are countless examples of this in industry, where innovation, first to market, and the absence of alternatives lead to the “hockey-stick” revenue curve. But eventually alternative products are introduced and customers’ expectations increase. And in the coming fall-out, the best-designed products are left standing.

If you want to create a business out of cheaper products that undercut the ocmpetition, don’t invest heavily in design. That would be a waste. But if you want to be the industry leader, then your only choice is to invest in great design, because if you don’t, your competition (eventually) will and you will be left behind.

Normally, I wouldn’t make the effort to respond to a message such as yours. At the request of a fellow IxDA member, however, I’ll take a minute. Perhaps you don’t intend to be demeaning, but I feel obligated to point out that, sarcasm aside, your post attempts to trivialize an entire field of extremely smart and talented people that are making the world a better place.

Allow me to tell you how design is viewed at my own company. I work at a small software development firm. We create software for industry—commercial and military. We gain customers through the efforts of our salespeople. We retain customers because of the utility and usability of our solutions.

As the sole interaction designer, I am in high demand. Practically every project requests my involvement. You see, the software engineers value my abilities. They understand that when I’m on a project, they will have clear specifications to work from. If they have a question about how a particular widget should behave, I’ll have the answer. They know that our customers come to us with requirements that don’t make sense. I turn foggy requirements into something they can build.

The salespeople know that when I am on the project, our solution has a much better chance of actually satisfying the customer’s needs, because it will satisfy the users’ needs. There is often a big difference between the customer’s requirements and the users’ requirements. Satisfying one without the other will not likely result in a successful product. I’m the key to satisfying the user requirements. I have the ability to observe users in their environments. I turn my observations into requirements, and then turn the requirements into a design specification. On every project that has followed this process, we have had satisfied customers that return to us for future work.

Have you noticed that I have not referred to color, alignment, or sex appeal yet? Yes, I do that to, and it is important, but that’s another discussion. The point is that my project involvement has a proven track record. I am an integral part of our software development teams, and I contribute to the efforts of requirements gathering and validation, design, implementation, testing, and direct communication with our customers.

If I had to prove that to management on paper, I expect I could do so. I could cite customers that we wouldn’t have now if not for my work. I could reference customers that have returned time and again, in large part due to my contributions. And I would have project leads, sales people, and software engineers to vouch for the importance of my work. The fact is, I don’t have to do that. My value-add is pretty clear to everyone who works with me directly, and word travels. I hope this helps clarify the role of design and lends some validation to its importance to the bottom line.

Sincerely,
Jack L. Moffett
Interaction Designer

Design is process, it is not result. Design does not lead with a result in mind and further if done correctly is a discipline of communication.

When people look at design this narrowly, I really just find it hard not to roll my eyes.

Luke Wroblewski has written that design is the “manifestation of your product strategy.” Everything about your product says something about your company. All designers are experts in communicating via the tangible and intangible characteristics of their chosen medium. Graphic designers are experts in communicating via the characteristics of advertising or of marketing collateral. Why do companies invest in creative services for branding? Why not just have the Photoshop production guy create your collateral without involving a graphic designer?

Other designers do the same through the media in which the products they design are realized, architects, through their buildings’ characteristics, and interior designers through the beauty and utility of their spaces. Sure, you could order up some lobby furniture and let the guys who deliver it decide how to arrange it. What difference does it make as long as people can find the card swiper? Most companies that can afford in-house software development efforts might care a little more than that what their lobbies say about them, and might therefore hire interior designers. How does that show up in the bottom line?

That said, we should consider whether it’s inevitable that design = slow. As designers, can we accept that there might be such a thing as “good enough design,” and that some software engineers are capable of it? Can we recognize that the best software engineers do care whether their applications come easily to the user’s hand? Can we trust the sales and marketing organization to make reasonable judgments about whether a feature has importance to just one customer or has the potential for a broader competitive impact?

If we make those choices, what, then, is our value? Kevin McCullagh, writing in last fall’s Design Management Review, makes a powerful argument for designers, whom he characterizes as uniquely capable of interpretation, tangibility, synthesis, and resolution. And good designers “are smart at turning knowledge into action—they solve problems, resolve tensions, draw tangible and practical conclusions, and hit deadlines.”