The economic value of design

Digital creativity blog by Flow Bohl, 30.9.2010

What is the value of a good design or designer? How can you find out? Markets naturally create prices for products and services depending on demand and supply but prices vary drastically for design services. There are no requirements to start working as a designer professionally, no exam or license is needed, as there is to become a hairdresser or school teacher, no membership of a guild or the like. With no entry barriers anyone can become a designer at any time, leading to an inflation in supply. And yet, good designers continuously do well, whilst the low end of the market struggles. Low entry barriers also foster entrepreneurship and creativity.

The value of design is not understood very well in the marketplace at large. In order to shed some light on the issue one needs to look at the value adding elements.

Money as value

How does the weather in Ghana influence the share-price of cocoa? A mathematical equation or trading software will be able to calculate a rise or fall in price and volatility. There is however no equation for calculating the impact of good or bad design. The price for design seems rather subjective and irrational.

A t-shirt at Uniqlo is available for £3, a t-shirt at the Affair for £27. The £24 difference is the added value of design. It also heavily depends on perceived quality which is influenced by marketing and advertising. A branded and well known product is almost always preferred compared to an unknown product with the same price and quality. Therefore the quality of design by itself is almost worthless if it cannot be sold convincingly.

A designer's task shouldn't be purely functional and aesthetic but most importantly it should be about understanding consumers' thoughts and emotions in order to motivate behavior change and create economic value.

Emotional value

Design isn't superficial cosmetics, it isn't purely style. Design affects how people experience products. Walking into a building designed by Frank Gehry will undeniably leave a different memory than walking up a council estate in Pekham, East London. Intimidating architecture will have an effect on the people different to architecture that's light and open like Gehry's.

These experiences are personal, they are unique and add emotional value which people are willing to pay a premium for. Luxury brands live on the promise of such an experience. A promise of exclusivity that expresses someone's individuality. A ring; for some it's only worth the price in gold plus some hours from the goldsmith, to others it's irreplaceable memories to a loved one.

Experiences remind of the past and enforce associations and recall. They tell a story and every story has a plot that ties events together. Brands also tell a story. A story written by copywriters in advertising agencies, like Mad Men's Sterling Cooper without the cigarettes.

Marketing tries to capitalize on the customer experience to create memorable user-journeys on a website, visits to restaurants or shopping malls. Good designers are good storytellers who focus on creating branded experiences that are remembered. This is ultimately driving sales, the economic value of design.

There are things money can't buy, just like these nice free articles on the topic: Value of design, PlacesMatter, International Journal of Design.

blog comments powered by Disqus
Talk to Flow