How Does Good Product Design Impact Business Value (With Examples)

What is product design? Is it just how a product looks, or does it have a much more significant impact? Find everything you need to know about product design and how it can influence the commercial success of your products.

Product design, by definition, is the design of any product sold by a business to its customers. Sounds simple? Don't be deceived.

Products include anything from everyday household items and digital products such as apps. So, the answer to the question "what is product design" is not as straightforward as it seems.

Before we can understand its importance, let's dive into the topic and understand what product design entails.

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What is product design?

Are physical products might be the first thing you think of when the term "product design" is mentioned? This is only one area of product design called industrial design.

However, product design nowadays refers to user experience (UX) and user interface design (UI) for digital products.

Although the process differs for different types of product design, a professional product designer always needs to consider crucial aspects such as:

• Business strategy: what is the point of creating this product, and how should it be marketed.
• User experience: how will users/customers interact with the product.
• User interface: the actual “design” part, where a product designer creates the look of a product.

So you can see how product design is not a one-person job. It involves several stakeholders with different expertise. Product design involves three focus areas, which are:

• Appearance: what does a product look and feel like;
• Functionality: what does it do:
• Quality: how well the product performs its intended purpose.

Before we can answer how design can impact a product's business value, we must briefly discuss the product design process. Although digital and physical products have vastly different design processes, there are some universal steps on how to design a product.

How to design a product?

Where do you even begin with designing a product? Much earlier than creating a mockup or first sketch. Here are some of the basic steps in product design.

Brainstorming & problem definition

Ever had a "million-dollar idea" in the shower? Me too. Still, despite how brilliant it might sound in the moment, successful products always solve problems. If something is merely a "cool idea," any investor or business strategist will tell you that it has little commercial prospect.

So before you have a whole team of people working days and nights to develop a product, you must ensure that you're dealing with a real and significant problem. Organize a brainstorming session or, better yet, a focus group. Listen to your target audience and try to define a problem you can solve. The problem should:

• Not have an existing solution or a solution that lacks quality.
• Be measurable: how much time or money are users wasting because of the problem
• Have a broader impact: beyond metrics, how else does the problem negatively affect your users' lives.

Once you've defined the problem, you can deep-dive into how it affects your target audience. That's the next step.  

User research

Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.”

If you've ever conducted any type of public survey or user research, you've likely experienced a common issue. What people say they want isn't always viable or even accurate.

Developing a product requires extensive user research, combining qualitative and quantitative methods. After your usual desk research (compiling demographic data of your target market), you must dig a bit deeper. Run tests, organize focus groups, and try to understand the reality of people's problems and wants.

With this information, you'll be able to polish your initial ideas and move on to the sketching phase.

Sketching/Wireframing

After all the research and brainstorming, it's time to put some "ideas on paper." Sketching or developing the first concept differs vastly depending on the type of product you're dealing with.

For digital UX/UI design sketches are called wireframes. They show the layout and information architecture of a digital product.

The primary purpose of a sketch or wireframe is to establish whether a product has the possibility of fulfilling a specific purpose. A prototype helps establish whether the possibility is viable or not.

Prototypes & testing

A prototype is the sample model of a project. It should have all the functionalities of the finished project, but it may lack a polished look. Depending on the product, prototypes can be vastly different, from a simple drawing to sophisticated prototypes created with special equipment.

Prototypes are used for testing the product and detecting issues or weak points. Although you can test the prototype yourself, getting together a focus group of users and collecting reliable data from them is always advisable.

Product design and development

If your prototypes have passed all the tests, it's time to start designing the high-fidelity product. At this stage, all the design aspects of the product are also going to be implemented.

The result of this process is usually a mockup. Before launching your product, it's good to do one final test run with your mockup. This is especially true since prototypes might be missing certain design aspects. Say you have a terrific product, but now it's up to the product packaging designer to create the perfect packaging. You may want to try out a few variations of color/design with a small number of samples before you launch into a fully-fledged production.

Quality assurance

Getting a second opinion before launching a product with your name is never a bad idea. Quality assurance is the process of approving a product that fulfills predefined criteria, and it can be internal or external.

How does design impact the business value of a product?

Now that we have a decent overview of all the complexities of product design, it's time to answer our initial question: how does product design impact commercial value?

Let's look at some of the main reasons for that, with examples of physical and digital products that prove it.

It improves usability

Remember that functionality always trumps aesthetics with product design. Far from being that aesthetics are unimportant (more on that in the next section); however, if a product isn't easy-to-use, there's no way it can generate a sizable profit for your company.

Design is a powerful ally in making a product user-friendly. To demonstrate the point, let's look at a couple of examples.

Physical example: Anglepoise lamp

So simple, yet so effective. The iconic lamp designed in 1931 is still one of the most brilliant examples of product design there ever was.

This lamp didn't precisely reinvent electricity or offer a significant update in our power-consuming habits (such as LED light bulbs). Still, with a simple change in design, this lamp reduced the need for more lighting (and therefore more power) by simply having the option to direct the light where you need it.

Digital example: Dropbox

The following product design example delivers a vital lesson: when it comes to usability, even the slightest details can make a difference.

Dropbox didn't have a terrible UI to start with - after all, how badly can you mess up an online storage system (in the end, it's up to the user to organize it how they like). Still, with the app's redesign, the website got more whitespace and a cleaner look that is easier to navigate.

Adding colorful buttons and different icon designs all help improve the user experience without being overwhelming or straying away from the company brand.

Design impacts purchase decisions

Did you know that color influences 85% of shoppers' purchase decisions? Furthermore, a staggering 93% rely on visual appearance when choosing products to buy.

We could go on, but even if you think about your personal experience, it's pretty evident that design has a major impact on purchasing decisions. Here are a couple of examples that prove it.

Physical example: Coca-Cola

How can you make a company like Coca-Cola even more successful? Turns out that even the simplest marketing ideas, with the help of a skilled product packaging designer, can make wonders.

Over ten years ago, Coke launched a campaign called "Share a Coke." The premise was simple: change the product packaging to include the name, nickname, or title of someone you could share a Coke with. Nothing else changed: the iconic red color and cursive typography stayed the same.

But the results were there. Over 76,000 virtual cans were shared on social media, and Facebook traffic skyrocketed by 870%. Most importantly, Coke sales went up by 3%.

Now you may not think 3% is all that impressive. However, considering the company's size, even the slightest increase in revenue is reflected in millions of dollars. More importantly, it was the first significant increase in sales that the company had had in decades.

It's hard to improve a product that's near perfect (sorry, Pepsi). Still, don't forget just how much of an impact a skilled product packaging designer can make.

Digital example: Fitbit

Ok, this one is a bit of a cheat because it encompasses a digital as well as a physical product. Still, Fitbit is a worthwhile mention since the digital UX is precisely what makes this product so popular in the first place.

It increases the perceived value of a product

Remember all that talk about how vital usability is for a product? That's absolutely true, but regarding product design and development, the cover can be just as important as the book.

Great design increases the perceived value of a product, which can have a direct impact on your sales and brand equity. Here are a couple of examples to demonstrate that.

Physical example: Kitchenaid

Is holding a mixer truly such a tremendous waste of time that we needed a stand-alone mixer? Well… kind of.

Kitchenaid does save time (even if it's often measured in seconds), and it's a lot more powerful than most regular mixers you need to hold yourself. But, at the end of the day, this is an excellent type of industrial product design that highlights how design can increase perceived value.

At the end of the day, it's just a few minutes of your time (unless you're over 80, I don't think holding a mixer is much of a physical imposition) and a lot more money than a regular mixer. And yet, I, for one, have had Kitchenaid on my Christmas wish list for years.

Digital example: Airbnb

Not only is it user-friendly, but it's also beautiful to look at. I could spend hours browsing through holiday homes (I can't afford), which isn't something I'd ever use some other similar sites for.

So, why do I have an issue with it? Well, this beautiful design is part of why Airbnb has a much greater perceived value than some of its competitors. As such, it can also afford to have higher fees and, therefore, higher prices for the same listing found on a different website.

Think great design is purely about aesthetics? Think again!

Strengthens your brand image

If you design products that aren’t just useful and beautiful, but also reflect your brand identity, you’ve hit the bullseye.

Digital & physical example: Apple products

Since we're in a roll, here's another confession I will make here. I'm a lifelong Microsoft user, and I never miss an opportunity to scoff at pretentious Apple users that brag about how superior these products are.

And yet, there's no denying that few brands are as design-oriented as Apple. There's no way you'd mistake an Apple product for another one on the market, whether we're talking about digital or physical products.

Personally, I'm still not 100%convinced that the design fully justifies the higher price tag of Apple products. But the brand equity certainly does. Apple has become a powerful and lasting brand by focusing on one thing and one thing only: product design.

Did it work? Since Apple is the most valuable brand in the world (ahead of Amazon, Google, and Microsoft), I think it's fair to say yes.

Final remarks

Whether you're a product designer or a business owner, it's helpful to remember just how vital the design of products is to their commercial success.

This is definitely not something you should do haphazardly: product design and development are always better left to the pros.