Are Design & Advertising A Waste of Money

By Jeremy Waite for NW Business Insider Magazine

YES! It is if you don’t do it properly. That’s probably why Duncan Bannatyne,  the entrepreneur and ‘dragon’, famously said “I’d rather have an impressive looking balance sheet than an impressive image ”. The thing is, most people know that they need to make their company stand out in an over-crowded market place,  but they make the mistake of thinking that simply having a marketing strategy and a prestigious advertising agency behind them will guarantee success. (It won’t).

What you should be doing is looking at design as an investment  and what the likely return on that investment will be. The Unilevers’ of the world measure their design and advertising spend and monitor the results. They regularly show a return of 400:1. That’s £400 of additional profit for every £1 that they spend on design and advertising.

Every company regardless of its size, should look at design in these terms. Design is, after all, an investment and not an expense. Only one company can ever be the cheapest, therefore everyone else must use design and their identity to stand out - across every form of communication. It is no surprise that 70% of the fastest growing companies in the UK claim that design is an integral part of their business’ success (www.designcouncil.org.uk).

So where do you start? Should you print beautiful brochures,  do a direct mail campaign,  advertise on billboards or buy some print advertising?  The response rates of all these forms or marketing are so incredibly low, that they are all a waste of time for most companies (especially SME’s). Advertising is great for building brand awareness for larger organisations, but most smaller companies need to make sales – not build brands.

Did you know that it costs on average 10 times more to find a new customer, than it does to keep an existing one? Think about it, you are lucky to get a 1% response rate from an e-marketing campaign or 3% from a direct mail campaign. Maybe even 17% if you personalise every leaflet, but we recently got a 47% return on a brochure we printed for every customer who had ever ordered from us – so we know this works! Success almost always comes from existing customers, rather than new ones.

So basically, spending money on pretty design and a new brand identity for the sake of it IS a waste of money, as is most advertising. The key is approaching creative services in the same way as you would invest in any other professional service. Be careful not to get too carried away by emotional pitches. Spend your money wisely and be careful to monitor the results. Many design companies will give you a very strange look if you ask them to qualify the money you spend on design, in terms of ROI, but the ones that can are usually the ones that will make a big difference to your company.

FACT FILE

THE MOST SUCCESSFUL COMPANIES IN 2008 WILL BE DOING THE FOLLOWING…..

• 1. KEEPING IT REAL – Communicate with real people (eg. Dove’s campaign for real women). Make genuine promises and sell with integrity.
• 2. TELLING STORIES – Case studies and testimonials from happy clients will be the driving force behind the fastest growing companies, not products and prices.
• 3. MAKING THINGS SIMPLER – Don’t try to be all things to all people. ‘Niche’ is good and simple advertising messages are much more memorable.
• 4. FEELING THE DIFFERENCE – Web advertising isn’t everything, it’s just one element of a great campaign. Customers will spend up to 35% more online, if they’ve also got a printed brochure in their hands. 
• 5. CARING FOR OUR COMMUNITIES – CSR matters. Giving a percentage of your profits to a charity related to your business really will make a difference to your clients.
• 6. DARING TO DREAM – People buy with their hearts, not with their heads. Emotions are everything, so make sure all your marketing aims to get your customers excited.
• 7. CUSTOMERS DON’T JUST WANT A GOOD DEAL ANYMORE - THEY WANT TO BE INSPIRED.