The economics of design – learning client speak

Why don’t they teach economics in design courses?

I guess it’s because many in the design community don’t make the connection between design and economics.

In a recent newspaper article Jessica Irvine gave a very good explanation of economics as a balance between consumer and producer value. I saw this as the role that design plays in economics. Unfortunately she didn’t quite make that connection. So I will because it helps us learn client speak.

Irvine explained;

“According to economics, happiness is created via transactions that maximise both the ‘producer surplus’ and the ‘consumer surplus’. When a company can sell a product for more than it would be willing to sell it, a ‘producer surplus’ is created.

On the other side of the transaction, when a consumer buys a product for less than what they would have been willing to pay for it, a ‘consumer surplus’ is created.”

Irvine goes on to describe how the two surpluses combine to make a ‘community surplus’ of satisfaction.

So what role does design play in this community surplus?

It’s obvious to us in the industry that design can create happiness that leads to a community surplus of satisfaction. That happiness can come from the prestige that design has added or it can come from making a product easy to use.

For the client, design can deliver a product surplus without increasing prices. Clever use of design can reduce time to market and give a speedy return on investment.

Design can reduce materials and make a product more profitable to produce.

Design can increase conversion rates leading to increased sales.

Design can make a physical or digital product easier to use, giving better emotional attachment to the brand and improving customer loyalty.

Customers love well-designed products that give them what they need and want. This comes from a well honed design process.

Design can pre-empt likely user problems. This lowers support costs and makes the product more profitable.

This list could go on and on.

The takeaway

The point is we should be explaining design in economic terms when dealing with CEOs, CFOs and CIOs. This is the language they understand.

Take this information and craft it in your words for a blog post. Use it as a LinkedIn article and tag me so I can support your story.

Whatever you do push out the idea that design has a part to play in economics.

Greg Branson

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Want more?

Here’s more information on design maturity:

1. Walk a day in your clients shoes – empathy mapping
2. Understanding a client to develop new business
3. How design mature are your clients.

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