Design Is Your Most Critical IP

If your business developed a new business method that increased efficiency by 50 percent and grew your total revenue by 15 percent, would you invest in it? Of course, you would.

Not only that, you’d patent the method and treat it as one of your most closely guarded competitive secrets. It would become a critical part of your business operations and plans for growth. You’d obsess over ways to get even more out of it.

That’s the same obsession your business should be bringing to your digital strategy. If you’re not, you’re getting left behind.

We know that personalized digital experiences can reduce your customer acquisition cost by 50 percent, increase the efficiency of your marketing spending by 30 percent and, yes, increase total revenue by 15 percent — but only when it’s well-designed.

Ron Conway, a Silicon Valley angel investor, recognized this truth as early as 2011. While speaking at the Y Combinator “Startup School,” he said, “Design and user experience is the new IP. Entrepreneurs who own their user’s mind succeed.”

Design is the new IP. It’s a notion that’s shaped my thinking since I first heard it because it so succinctly captures the central role design and digital experiences play in the success of every business.

Today, I would take it one step further — design is actually your most critical IP. The most valuable brands in the world are not being built with technology patents or manufacturing secrets alone, but rather through great design.

Make experience your business

Of course, getting business value out of great design is not a new idea. There have always been brands that have leveraged design as a way to differentiate themselves from the competition, or charge a premium. What’s changed is that design has evolved beyond being a mere differentiator. In the digital era, it’s a basic requirement to reach and engage your audience in the first place.

So, if you’re still thinking about design as the way something looks, you’re getting it wrong. Today, design is about the way you engage with your customers at every step of a never-ending customer journey. It touches every single part of your business.

The Starbucks brand is a great example. In a pre-digital era, the Starbucks experience was shaped by a distinctive logo, color palette, and consistent in-store experience. Together, they created a recognizable and positive brand perception.

But, so much more important today is their well-designed digital experience. Take my morning coffee routine, I used to make coffee at home because I didn’t have time to stand in a long line to get my latte. But, with the Starbucks new mobile app, I can easily order and pay online, and my latte is ready on my way to work.

The Starbucks mobile app for iPhone and Android puts a rich brand experience inside the pocket of every customer.

For its efforts, Starbucks has been rewarded with increased sales, greater loyalty, and a detailed understanding of each customer. With eleven million customers participating, more than 20 percent of Starbucks sales are conducted through the app, and they are aggressively pursuing strategies to increase sales by each individual user up to 50 percent.

Of course, none of it would be possible without integrating the core functions of their business alongside the design of their digital experience. Think about it — their app has to work seamlessly with point-of-sale systems, store expansion, marketing, customer service, and more.

Starbucks designed an experience that became the heart of their business.

Design is power

Unfortunately, making design a core part of your business strategy — treating it as the business-critical IP it is — is easier said than done. It’s a complex undertaking, and there are several challenges every business and brand needs to consider as they make the shift. Here are the four key areas to start with:

Create a strategic plan that considers the new processes, new workflows, and new technologies you’ll need to supercharge your business — creation, iteration, delivery, testing and measurement of complete experiences. Include all parts of your organization. When design is a strategic part of your business, you need to be able to change the way people reach and interact with each of your core business capabilities just as quickly as you can update your website.
Consider how you will manage the challenges of content velocity and delivering personalized experiences at scale. All digital experiences require content, and content has to be delivered across more channels and devices than ever before. It’s easy to be overwhelmed by the amount of exceptional, personalized, and targeted content it takes to engage your audience. Identify the tools, services, and strategic partners that can help you in advance.
Speaking of strategic partners, rethink your traditional brand and agency relationship. Designing truly powerful experiences requires an in-depth understanding of the customer and processes that only exist inside the business. You’ll need to develop in-house design expertise to support your core business functions while working hand-in-hand with creative agencies to leverage the creativity, cultural expertise, and increased scale they excel at. It will require new levels of long-term partnership, collaboration, and shared knowledge-building to be successful.
Make sure you are investing in new roles and skill development. Leveraging the power of great design demands that new roles and new types of expertise have a seat at the boardroom table. You may find that new roles — like Customer Journey Manager, Chief Design Officer or Chief Content Officer — are necessary to be successful.

In the digital era, design is power. It’s the power to reach more customers than ever before and understand them in brand new ways. It’s the power to transform your business and develop new services, new offerings, and new revenue streams.

Successful brands must treat design with the same strategic importance as engineering, manufacturing, business operations or customer support. In other words, treat design as your most critical IP.

Article originally appeared on PSFK.