By Ian Whitworth
Here let me read you this thing. 8 minute listen.
It’s more than a little ironic that design has an image problem.
Business people don’t really believe in design’s mystical powers, because it comes from people like this. Who ask you what sort of animal your brand would be. People who you just know have no clue about where money comes from.
“It’s all about the brarnd values marn.”
But as a business owner, I want to make piles of sweet cash. Sure I was a creative director in a past life. I love words, ideas and designs like oxygen itself.
But if I thought I could get significantly higher ROI by dropping every shred of design and creative from our business and putting the lot in a plain white wrapper, I’d do it in a heartbeat. Because business is business. Creative without a commercial result is art, the natural companion of the word ‘starvation’. I’ll do art on my own time.
Just trying to meet payroll for platoons of staff each month will turn the most right-brained aesthete into a cold-eyed, soulless merchant in a couple of quarters.
As luck would have it, design has ferocious powers to ratchet up your ROI, particularly long term. Here’s why.
1. It Stops You Having To Be The Cheapest of Six Quotes
When I was a creative director, I spent a lot of time having ideas spiked because they made clients feel uncomfortable. These weren’t indulgent ideas. They were based on clear commercial thinking. “We really love it! It’s just a little … creative … at the moment, maybe next year.”
When we set up Scene Change it became a test lab for that sort of campaign. “Hmm here’s an idea… “ – waits three seconds in an empty room – “… client says yes!”
We still have to hustle on price. That’s business reality. But we will never be the cheapest option, because we don’t have to be. People know what we stand for.
We’ve grown an average 30% a year since startup a decade ago. That compounds out quite nicely.
This isn’t a business where growth is just adding staff. It’s a brutal level of capex. Yet we did that with no external finance. All from retained earnings. You can’t do that being the cheapest.
2. Design Signifies That You’re Across The Details
It works at a subconscious level. If you’re particular about making everything look just right, customers assume that you’re also across all the other micro-details of service that add up to a great experience.
That means clients who stick with you, which is exponentially more profitable than churning through new ones all the time.
3. Design Slashes Staff Turnover Costs
We would still do every bit of marketing and design we do if we never got a single new customer out of it. Because our staff dig it. Let’s pick just one example: vehicles.
Our first six staff joined us on the same day. They all worked somewhere else. They did it mainly to get away from a rebrand they didn’t like, with words and colours that made them feel … less technical.
We showed them a picture of the black, badass “Audiovisual Response Unit” vans like the A-Team. Technical people like to feel like part of a secret dark international organisation. They’re the ones in the movies inside the van with a laptop, guiding the action heroes through the aircon vents.
Our prospective staff team didn’t ask about salaries or working conditions. They asked if the vans could have chrome rims.
It sealed the deal. We let them pick their own numbers. Among the earliest were 86 and 99, a tribute to their love of Get Smart.
Staff want to feel proud to work at the cool place. When our techs arrive on site in the 8-Ton Black Roadcase of The Apocalypse, with its show production in-joke “TRUCK – must travel on wheels”, they feel really good about it. That mood shows up in every detail of how they work with our clients.
That means long-term clients, and long-term staff.
Pic: Steve Farrugia
So our voluntary staff turnover is under 2%. That easily adds a six-figure amount onto our bottom line that would otherwise go in recruitment, training and staff doing an average job as they get up to speed.
(Side note – the additional costs of high staff turnover are well documented in the HR books. But nobody ever mentions the even-more-hidden cost: the surviving staff having to shell out their own cash every other week for farewell gifts and drinks. It’s really expensive and tiresome for them.)
4. The Incremental Cost Is Trivial
We have about 20 vehicles around the country. The big ones cost about $200K. For that you get an anonymous white truck like everyone else. The design, print and paint job is under $4K.
You’re paying an extra 2% for a powerful weapon of staff motivation and customer awareness that will last ten years.
What sort of shortsighted cheapskate wouldn’t do that?
5. Design Delivers The Atom-Bomb Sized Idea
From a thousand meetings with big brand clients, rule #1 is: you are not allowed to mess around with our sacred brand. So I bow down to Caltex and whoever had the genius idea to mess with the design manual and rebrand entire stores as Cahilltex for the World Cup.
(Note for our international readers: Tim Cahill is the beloved goal machine of the Australian World Cup team, lining up at age 38 to be the fourth player in the world to score a goal in four World Cups. The current three includes the likes of Pele. Your teams will be powerless to stop him.)
Obviously I don’t know what numbers it’s doing for Caltex, but I posted the shots last week and it’s up to 15K views so clearly it’s striking some kind of happy note.
Work like that can instantly reposition a brand as just nicer than your average inflexible colossal fuel brand. Today’s football kids will feel good about Caltex for decades.
6. OK Maybe I Believe You But Can You Show Me Some Stock Analysis?
Sure I can. When I had my marketing agency, I did a lot of digital work with Breville, the small appliance maker. They were one of the clients that let the interesting ideas happen. I spent a lot of time with their design department, which operated at an Apple level of obsession. And their work was supported by the highest levels of management.
The Breville designers were forensic on every detail of the experience. Just pushing a button on their espresso machines felt like closing the door on a tiny Mercedes Benz S-Class limo. Last time I bought one of their machines, the purchase price included sending a hipster to my house for fine-tuning. We spent a joyous hour nerding out over extraction temperatures and the like.
They make a world-beating appliance. So now they’re selling all around the world.
The core design team leadership has been there since about 2006. How’s it gone for them? Their market value is up 644% since 2006. The overall market index is up … 26%.
It’s not some digital stock on a valuation with no relationship to earnings. That valuation is via genuine cash flows from making great machines that people want to buy.
There’s some ROI for you, finance folk. So respect those hipsters. Or you’ll be the poorer for it.
If you liked this, you might also enjoy How To Get A Better Logo Than Your Cheap-Ass Competitors.
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