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When Williams Murray Hamm designed packs of Hovis bread covered in baked beans, many branded them as gimmicky. But Hovis had the last laugh, with the packs generating £30m worth of increased retail sales.

Articulating the value of design to clients who are only interested in the cost is an age-old problem for designers. Calculating the value of design can be even trickier.

Formally assessing the return on design investment (RODI) is something seven out of eight businesses don’t do, according to the Design Council’s Value of Design Factfinder. And 88% think: ‘Why should we bother?’

Rob Wallace is an advisor to the US-based Design Management Insititute, for which he regularly speaks about RODI. He has asked hundreds of companies whether they track the financial value of brand and packaging design, compared to advertising, sales promotion or marketing, and found that, by and large, they don’t. When it came to packaging design, he discovered most companies see it as a cost, not investment.

But Wallace says packaging design’s effectiveness in generating profit is proven regularly. The UK’s Design Business Association (DBA) Design Effectiveness Awards use commercial sales data as a key judging criterion and their high number of packaging design winners attest to its power.

He adds, though, that returns should be measured by the companies investing in design, not just awarding bodies. We need to stop talking about process and about driving costs down. In addressing an audience that believes, ‘If you can’t measure it, you can’t manage it’, we need to start speaking about return on investment. To do this, we need a tool that empirically quantifies the value of package/brand identity design in terms of dollars and, in their minds, sense.

Finding a methodology for measuring RODI is more difficult, but a look through some recent DBA award-winning pack designs shows that it’s not just money made that you can use to quantify RODI.

For Champagne Pol Roger, it was refreshed business, as much as new business, that proved the value of its investment in a range of new pack designs in March 2003. Hilary Boys, strategic planning director at Lewis Moberly, the design agency that produced the new work, says: The redesigned packaging provided Pol Roger’s sales team with a powerful reason to hold fresh talks with distributors. The latter loved the new designs and the fresh momentum it brought to the brand. As a result, distribution increased. The brand gained 50 new stockists in the first year alone and has continued to gain more. In December 2003, Pol Roger gained a listing with Waitrose – a retailer it had been trying to get for years.

Bill Gunn, managing director of Pol Roger at the time of the redesign, said: Sommeliers in traditional restaurants were familiar with Pol Roger and had it on their lists, but were not really trying to sell it. The new packaging has provided a jump-start and created enthusiasm.

Pol Roger also found the new designs saved it money. Boys says: Since the redesign, there has been a reduction in marketing costs. An unexpected bonus for Pol Roger is that sales have been so successful that the annual marketing spend per bottle has come down and sales promotions have been cancelled.
Gunn put it more succinctly. Thanks to the new pack, he said: The champagne is selling itself.

Bread winner
In 2001, British Bakeries wanted to be number one in the overall bread market, but its white bread sales weren’t up to scratch. It knew what it wanted from a design project: to reposition the Hovis brand, get rid of the nostalgic imagery used for so long and to assert its popular appeal. The designs by Williams Murray Hamm, which featured piles of baked beans or slices of cucumber all over the poly-bags, have been variously described as eccentric, entertaining and brave, but there’s no doubt they made the company money and market leaders. Although the budget for the redesign has never been revealed, there’s no doubt it was considerably less than the £30m worth of increased retail sales it brought in the first six months after the launch.

The new packs also generated lots of publicity from national newspapers and determined the creative concepts for the PR and marketing campaigns that followed, saving money.

The brand value of Hovis also increased. The colourful packs instantly communicated variety, which the brand knew was central to its future, and after the redesign Hovis was tracked as the fastest growing food brand.

If money made and money saved are relatively easy ways to assess the financial effects of a design project, how can you quantify the value of being in the right place at the right time?

Research shows that well over two-thirds of consumer product purchase decisions are made at the point of sale, and here it is brand identity and packaging design – as well as sales promotions – that drive this dynamic. Once a pack hits the supermarket shelf, the effects of a one-off investment in design are likely to be sustained over months or years. It’s not a 20-second blast from a TV ad that’s more easily forgotten.

When the packs for Miracle-Gro fertiliser were redesigned by John Smith Design, in 2004, sales of one particular product encouraged consumers to buy into other products from the same brand. We have had a fantastic response with one of the new products, Miracle-Gro Ericaceous, says Jane Hartley, product manager of brand owner The Scotts Company. The use of colour coding and strong visual images throughout the pack has generated significant growth in this area. This growth manifested itself in a sales increase of 40%.

But how do you know what the right pack design looks like and how much should you invest in testing new designs? Neil Hurst, design director at Seymourpowell, says: A lot of what we do is foresight. Understanding the consumer is fundamental to designing things and getting them right.

Seymourpowell’s clients often already know how to go about testing ideas, but they are scared of investing in the creative part of the process, says Hurst. People are more willing to invest in research and the front end, than in the crafting. Research is closer to the marketing world. The language is more familiar.

Boys, from Lewis Moberly, agrees that consumer research can yield valuable insights and that it can be worth paying for, but understands that smaller firms may find it’s outside their budget. Consumer research is often used by larger companies. Smaller ones may show 3D mock-ups to their distributors/trade customers, she adds. This is what Will Bomer, managing director of Kingsdown Water, did with its new bottle designs. There was no research with end consumers, but Bomer showed the new design to some of his trade customers and received positive feedback, so continued with the design process.

When it comes to getting value for money from a packaging design project, each has the potential to pay back investment in a variety of different ways.

No client goes into a packaging project without thinking they’ll get payback, but some need more persuading than others and some paybacks take longer than others, says Boys. Obviously, brand owners and their designers need to bear in mind any capital expenditure or increased unit costs when they are considering design, as well as the design fees. But design is a very cost-effective way of improving profits.

RODI: THE NUMBER

46%
Of design-alert businesses have had turnover increase by more than the amount spent on design

£602,000
Average increase in turnover of businesses that have invested in design

20
Average number of months it takes for design projects to pay back the investments

3.3
Design is 3.3 times more likely to contribute to turnover growth if it guides new product development processes

DOVE REJUVENATED

Seymourpowell’s foresight department has worked closely with Unilever on its Dove brand products and packs. Design director Neil Hurst says that conducting ethnographic research, and visiting users at home to see them using Dove products in everyday life, was crucial in helping Unilever find out some of those ‘unknown unknowns’ it is famous for wanting to get to know.

It paid dividends. While researchers watched people use Dove soaps, they realised they kept them tucked away in a cupboard with the cleaning products, rather than with other beauty products, says Hurst. The realisation that we had to show consumers they were dealing with a beauty product was unprecedented. What we saw with the ethnography was that Dove soap as a beauty product was not the same as people were living with it day to day.

Seymourpowell felt the low status of Dove soaps in customer homes was exacerbated by poor multipack packaging and that having to open these with a knife was a low-value solution that made the product feel utilitarian.

So, the firm designed a treasure chest multipack that ‘presents’ the content to the consumer and makes it seem more valuable. While the pack made the soaps stand out at the point of sale, as well as changing how consumers behaved with the product, it was also easy to produce on existing machinery, without major modification.

Seymourpowell didn’t stop there. It again helped Unilever tap the unknown potential of its manufacturing processes with the design for a new deodorant pack. The Petal actuator won a Gold Award at the 2007 Starpack Awards because it emphasises the feminine and premium position the product occupies, according to judge Jim Dale of RPC