The importance of design effectiveness in SMEs – why brand isn’t just for the big boys.

If you speak to people about brand, the conversation often centres on the visual identity of an organisation. But when we think about brand in a wider business sense – particularly, the impact it can have on an organisation, positive or otherwise – we start to realise that it is about far more than just a logo.

Instead, brand characterises why the organisation exists – its purpose. It clearly articulates the principles that shape how the company and the employees within it behave, through good times and bad. It gives a coherent personality that can prove a key differential in a crowded space.

It is the ‘soul’ that unites a company with its stakeholders – not least colleagues and customers. And, if authentic, it can therefore prove a catalyst for phenomenal growth.

However, shaping, defining and protecting a brand usually takes time, financial commitment and ongoing effort. In the eyes of some it is not viewed as one of the most important assets within a business, but merely a costly marketing exercise. A slow burner. An avoidable expense.

For SMEs – particularly those that have found the pandemic commercially tough – it’s understandable to not want to commit any investment, or even thinking, to a brand-related project right now. But what if such a project would prove critical to the reputation, competitive cut-through, revenue, culture, or sale value of the organisation?

Usually, if the return on an investment – however nominal – can be understood, business owners are far more likely to pursue the activity. It therefore follows that, if the design effectiveness of a project – its bottom-line impact – can be measured and optimised, more companies of all shapes and sizes will sit up and pay attention to brand, not just corporate giants with deep pockets to fund big stunts.

But where should such a measurability exercise begin?

Big brand measurements

The dmi:Design Value Index (in the USA) monitors the impact that public traded companies’ investment in design has on stock value, and interestingly, it benchmarks that strategic value against the S&P 500 stock market index. Design-centric brands including Coca-Cola, Nike, Stanley Black & Decker, and Intuit, are known to yield 10-year returns 200% greater than their counterparts. However, the days of it taking a decade to bear such results are long gone.

In terms of where to begin for non-public enterprise organisations, it’s crucial to define a starting point – the baseline from which to measure any progress and bottom-line impact moving forward. To aid this process, think about why the brand investment is being made in the first place – what it is striving to achieve. With one eye on the end goal, it is easier to monitor and measure any upturn experienced on this journey to a competitive advantage.

Defining measurement objectives

That advantage – or the effectiveness of the brand investment – will naturally show up differently from one business to the next.

If impact is to be judged on purely fiscal merit, data including an upturn in revenue and profit, market penetration, share price, and the ability to secure onward growth funding, will prove core to measurability. The ease with which new products and services can be launched, and the speed with which they can gain traction, could also enhance this picture, if relevant. Some businesses even evaluate balance sheet strength. In competitive markets saturated with SMEs, these figures really matter, so they should form as much a part of the conversation with designers, as the creative elements themselves.

Wider brand-related elements that will also ultimately impact on a company’s management accounts, include external stakeholder perceptions, ranging from customer attitudes and experience levels to employee satisfaction.

This is where things get really interesting, because some organisations don’t readily acknowledge the influence that brand can have on every customer touchpoint. But when it has the power to drive cultural change or service design, for instance, it could affect the number of complaints an organisation receives, a firm’s NPS score, or even the ability to meet SLA targets. This data is regulated in certain industries, so progress in these respects can be critical. It could better safeguard client retention too, which is particularly beneficial in overly crowded markets.

From an internal point of view, it could strengthen the organisation’s ability to attract the hottest talent, retain staff in a competitive space, and even boost the performance of employees if behaviour is positively shaped by brand work. It could go so far as to accelerate a company’s ESG (environmental, social and corporate governance) value.

Sometimes the objective for a brand investment project, is to better structure a product or service architecture, which can help to define the value of a business and its divisions if it is to be positioned for sale – wholly or in part.

In truth, the list of potential measurables could go on. The challenge isn’t necessarily to consider how brand impact can be measured, but to define what truly matters to the business concerned, and to simply start measuring! So many organisations – of varying sizes and maturity, not just SMEs or start-ups – fail to track the data that matters to them in this respect.

But if there are no analysis metrics in place – or if the only measurable is revenue uplift – it could prove extremely difficult to understand if the investment has truly been worthwhile. Worse still, a business-critical brand project could be delayed or avoided entirely, because the potential design impact remains misunderstood.

If you’re thinking of embarking on a brand project, we can help.
Call: 01484 511358 or email: hello@engineroomdesign.com to discuss your business challenges with us today.