Measuring the ROI of Hiring a Design Agency: Is It Worth It?

Competitive advantage in continuously growing and improving in the technical field and startups and it’s more about the brand or logo as it is about the products or services you or your company present. That’s why not hiring a good design agency is a big mistake. Because the buzz around design and branding is undeniably strong, one question often comes in the minds of business owners and decision-makers: 

What are the ways of determining ROI every time you hire an outside design team? Is the associated cost reasonable, or could the money be utilized in other more productive and beneficial ways?

In this article, we will describe the factors that determine the amount of return on investment after hiring a design agency. This article will cover how professional design agencies affect your brand, which stats you should monitor, and why choosing the right agency can be your business’s catalyst.

The Effects of Design on the Success of Business Ventures

Before jumping into the specifics of ROI 

Let us insist on the fact that design is a critical factor for business performance. People nowadays are so used to watching brands online, thus making the brand image the first point of connection business prospects have with your brand. 

From your site to your social media streams to your posters and flyers, the design is the style of your brand and speaks to your unique selling proposition.

1. Brand Perception and Trust

A brand with a professional look makes a positive impact to the extent that it will establish credibility.

If a customer views them and there is a professional-looking logo and relevant color themes, then it already gives a notion that the business is legitimate. 

On the other hand, poor design does the opposite—creates doubt about the legitimacy of the products advertised on the site.

In the tech industry alone, competition is very high and a market brand identity can very well position a company among hundreds of other players. 

A well-recognized brand agency uses this and comes up with designs that help appeal to the target group of clients to improve brand image and reputation.

2. Customer Experience and Engagement

User experience, also known as UX, is another important aspect whereby design has a significant input. 

To be precise, a reputed design agency will create UX design that looks into the aesthetics of your website or app and also how it can be best navigated in order to be as functional as possible. 

This has the effect of improving the level of satisfaction of consumers, their involvement, and their chances of purchase.

For example, an e-commerce business will benefit from an easy-to-understand design that will help increase its sales. In this industry, where often the products and services are not basic and simple a perfect, comprehensible design will help to decrease the time that customers require to get acquainted with your products and services and thus turn them into a liking.

Here are some of the methodologies that can be used to measure the ROI of design

Design ROI is not as cut and dried as simple profit margin calculations, but achieving design ROI is very feasible and possible. The agency-client relationship and overall value are clear when concentrating on a limited set of KPIs that demonstrate what a design agency can do for your business.

1. Customer Lifetime Value (CLV)

Customer lifetime value or CLV, is the total of potential revenues that one can attain from a customer over the period that he will be getting it on a particular business. 

It has also been seen that good design helps in increasing the CLV by making the customers loyal and often returning to it.

For instance, suppose the app developers take their time and create carefully designed applications that users find attractive and effortless to operate; then, such applications are most likely going to have higher levels of retention than those complex applications that users find it hard to navigate through or find interesting. 

2. Website Metrics: Time on Site, Bounce Rate and Traffic

There is another significant sphere that can demonstrate design contribution—it is the performance of your website. If you have just hired a design agency to redesign your site, pay attention to shifts in the traffic rate, bounce rate, and average time per visit.

A good design should therefore be expected to help in improving the organic traffic since the search engines would rank well-designed and easy-to-use websites.

Websites with a lower percentage bounce rate imply the visitor finds what they are searching for and spend more time on your website, which is often caused by better interface design and non-boring visuals.

If the above metrics are on the increase after a redesign, then it is likely that the money being put into the design agency is well spent.

3. Brand Awareness and Recognition

Brand awareness is somewhat more important in the long term. A good exercise in rebranding or market campaigns can significantly impact your brand’s visibility. These efforts play a crucial role in defining how distinguishable your brand is. They help you stand out within your niche market. By focusing on rebranding or targeted campaigns, you can enhance your brand’s distinctiveness and recognition.

Using questionnaires and market research, you can assess brand awareness. This helps determine the state of brand awareness before working with a design agency. After collaborating with the agency, you can evaluate any changes.
If your brand receives more recognition, it’s a positive sign. This indicates that your design investment is yielding results. When people associate your brand positively, it shows that your efforts are paying off. This positive linkage shows that your brand is experiencing growth.

Some Case Studies: Real-World Examples

Before diving into the ROI of hiring a design agency. First, we examine how various businesses have benefited from their design investment. We’ll explore real examples of companies that saw significant gains. These insights will help illustrate the value that a design agency can bring.

Case 1: Rebranding of Airbnb

Airbnb is one of the best examples of how design can be powerful and effective, especially when we look at the rebranding that the company underwent in 2014. 

Royal Mail, one of the leading branding agencies worked on designing a new logo and underlying image that would be more appropriate for Air BnB. 

The result? 

They have unreasonably raised its brand awareness, boosted its sales and also facilitated the company’s diversification into new segments. The rebranding process was an important aspect of Airbnb’s evolution, proving that there was ROI on the concept of design.

Case Study 2: Case of Mailchimp Company’s website redesign

Another real-life example is a popular email marketing platform called Mailchimp; an update of the website’s design resulted in increased users activity and improved levels of customer satisfaction. 

In the new design of the site, UX became the major concern as steps were taken to improve the site navigation and looks. 
This did not only mean that the website conversion rates were much better but also that support queries were lowered, thus showing that good website design brings clear results to the business.

There are hidden costs of poor design

Of course, it’s a good idea to speak about positive outcomes and potential profits from good design.

Because it is more pleasant to discuss the lighter side of the coin. Brand building on a poor logo or website design leads to lost opportunities. It also increases customer acquisition costs. Over time, it can result in a decline in your business reputation.

If your website is complex, users may struggle to find a particular product. When that happens, they can quickly become frustrated. As a result, they might abandon your website altogether. This leaves you at risk of losing them to your competitors.

An old, nonsensical logo can label your business as unprofessional. This can hurt your brand image. Ultimately, it leads to a loss of sales.

Conclusion: Is it worth it?

Is it advantageous to hire a design agency? 

The answer is Yes 

As long as you do it with some level of sophistication. Measuring the ROI on specific design investments can be done by analyzing key indicators. These include bounce rate, revenue, cost of customer acquisition, and website traffic rates. Each metric provides valuable insights into the effectiveness of your design investments.

In many markets, like the tech market, which is filled with a high number of competitors, branding is a necessity. Working with the best design agency is one of the determinants of success that must be pursued by any organization that is serious about its operations and growth.