Want to decrease your marketing spend and increase profits? Invest in Design.

According to the most recent CMO survey, in 2023 the average marketing budget accounted for 12.3% of overall budgets and 10.9% of revenues. As a result, it’s not surprising that Chief Marketing Officers are under growing pressure to account for the impact of marketing efforts. But is the current spend on marketing needed or justifiable?

Even in a world where some companies (e.g., Tesla) claim to have no need to market their products, it seems unlikely that marketing will ever completely disappear. That said, it doesn’t mean that companies have no choice but to continue investing more than a tenth of their annual budgets and revenues in marketing. 

Products and services that respond to established needs and do so successfully rarely require a high marketing spend to be brought to market, and the reason why is simple. If your target market already needs your solution, it works, and it is affordable and sustainable, there is little or no need to convince anyone that they should adopt the solution. But this doesn’t mean that companies can or should simply reallocate their existing marketing budgets to design. In fact, investing in design can also greatly reduce the overall cost of successfully bringing a product to market, but in order to leverage this benefit, it is important to understand why and how to invest in design. 

Here are three ways brands can effectively invest in design: 

1. Appreciate Design as a Science, Not Simply Aesthetics
   
   Design is all too often viewed purely in terms of aesthetics. In fact, great design has little to do with ornamentation or packaging. Design isn’t about making pre-existing products or services look or feel better. The best design (i.e., science-based design) is about building products, services, and even systems that deliver urgently needed solutions to humanity at the lowest cost and with the least negative side effects on individuals, communities, and the environment. 
   
2. Embrace Design to Transform Your Business, Not Just a Product or Service
   
   Design isn’t just about building better products or services. The best design aims to transform the conditions under which new solutions are identified, nurtured, and developed. In a sense, design is about transforming your entire business and not simply a specific product or solution. When companies understand and embrace this orientation to design, they not only create the potential to tackle one-time projects but to transform their entire business model.
   
3. The Right Designer in the Right Role Matters More Than the Size of Your Design Team
   
   A 2022 McKinsey study on the impact of design reached a surprising conclusion. Contrary to what one might assume, there is no correlation between the number of designers in a department and the department’s financial performance. Instead, the position of the designer and their ability to engage stakeholders across an organization seems to play a far more significant role in driving profits than the size of one’s design team. For organizations thinking about investing in design, this insight is critical.