The Business Value of Design: What the Research Says

Good design is not decoration. It is one of the few business investments with long-term, independently measured returns. McKinsey tracked 300 public companies for five years and found that the strongest design performers grew revenue 32 percentage points faster than their industry peers and delivered 56 points higher shareholder returns. Other studies, from the Design Management Institute and the IPA, point the same way. This article walks through what that research found, why design creates value, and how a growing business can put it to work without a corporate budget.

What the research says

McKinsey: design leaders grow faster

In The Business Value of Design (2018), McKinsey followed 300 listed companies across medical technology, consumer goods and retail banking. The team gathered more than two million pieces of financial data and logged over 100,000 design actions. They then scored every company on a McKinsey Design Index (MDI).

The companies in the top quarter of the index did far better than their industry peers over the five years. Their revenue growth was 32 percentage points higher, and their total returns to shareholders were 56 points higher. The pattern held in all three industries, for products, services and digital alike.

The study's sharpest point is that the gains are concentrated. Moving from average to top-quartile design pays off much more than small steps in the middle of the pack. Design rewards companies that commit to it, not companies that treat it as a finishing touch.

Design Management Institute: a decade of outperformance

The Design Management Institute (DMI) built a Design Value Index: a portfolio of publicly traded US companies that met strict criteria for how deeply design is embedded in their leadership and operations. In its 2015 results, the design-led group outperformed the S&P 500 by 211% over ten years.

The index is small and tracks companies that also do many other things well, so treat it as strong evidence of a pattern, not proof that design alone caused the returns. Still, it lines up with McKinsey's finding: companies that take design seriously tend to be the companies that win.

The IPA: brand building pays over the long run

Les Binet and Peter Field analysed decades of campaigns in the IPA Effectiveness Databank. Their report The Long and the Short of It showed that sales activation (promotions, performance ads) produces quick spikes that fade. Brand building, by contrast, produces growth that compounds over months and years. As a general guide, they found the best results came from putting roughly 60% of effort into brand and 40% into activation. The right split varies by category, but the principle is clear: a recognisable brand makes every future sale cheaper to win.

Consistency is where value leaks

Marq (formerly Lucidpress) surveyed more than 450 brand and marketing professionals for its State of Brand Consistency report (2021). Respondents estimated that consistent branding would lift revenue by 10–20%. Yet 60% said their company regularly deals with off-brand content. This is the everyday gap between having a brand and actually using it.

Why design creates value

The research describes outcomes. The reasons behind them are practical:

• Recognition lowers the cost of every sale. When people already know and trust how you look, each ad, post and package works harder. That is the compounding effect Binet and Field measured — and why a distinctive mark like the one we designed for Spiral Coffee Roastery keeps working on every street corner, cup and bag.
• Clarity converts. A well-designed website, menu or box helps people understand the offer faster, so fewer of them drop off before buying.
• Perceived quality supports price. Customers judge quality from what they see. Considered design is one of the few levers that lets a business charge more without changing the product.
• Systems save time and money. A brand system (logo set, colours, type, templates, rules) means new material does not start from zero. Teams move faster and stay on-brand.

What design leaders do differently

McKinsey grouped the habits of top-quartile companies into four themes. Each one can be scaled down for a small or growing business:

1. Measure design like revenue. Leaders track design with the same rigour as sales and costs. For you: pick two or three numbers (website conversion rate, repeat purchase rate, enquiry quality) and check them before and after design changes.
2. Design the whole experience. Top performers remove the walls between product, digital and service. For you: walk through your customer's journey from first ad to unboxing or invoice, and make sure it feels like one brand at every step.
3. Make design everyone's job. Design is shared across teams, not left to one department. For you: give staff and freelancers clear brand guidelines and ready-made templates, so everything they produce looks right by default.
4. Test and iterate. Leaders keep learning from real users before and after launch. For you: show early concepts to a handful of real customers, and treat your website and packaging as things to improve, not finished artefacts.

Where to start: a practical checklist

• Audit what exists. Gather your website, social posts, packaging, decks and printed material on one table or screen. Note where they disagree.
• Fix the system before the pieces. If the inconsistency is everywhere, the problem is a missing visual system, not one bad flyer. See logo vs. brand identity for what a full system includes.
• Prioritise the highest-traffic touchpoint. For most businesses that is the website or the product packaging. Improve that first and measure the change.
• Write it down. Short, practical brand guidelines are what keep the value from leaking away as more people create content.
• Commit long-term. The research rewards consistency over years, not one-off campaigns.

Frequently asked questions

Is there real evidence that design increases revenue?

Yes. McKinsey's five-year study of 300 companies found that top-quartile design performers grew revenue 32 percentage points faster than industry peers. The DMI and IPA research points the same way. No study can isolate design perfectly, but the pattern is consistent across independent sources.

Does this apply to small businesses, or only to large companies?

The studies measured larger companies because their data is public. The mechanisms (recognition, clarity, perceived quality and efficient systems) work at any size. Smaller brands often feel the effect sooner, because every customer interaction matters more.

How should I measure the return on design?

Choose metrics linked to the touchpoint you changed: conversion rate for a website, sell-through or shelf pick-up for packaging, enquiry volume and quality for a brand refresh. Record a baseline before you change anything, then compare over the following months.

What is the best first design investment?

For most growing businesses it is a coherent brand identity system, because every later website, package and campaign builds on it. If you already have one, the next step is usually the touchpoint most customers see first.

Want to turn design into a measurable advantage for your business? Explore our brand strategy and identity service or tell us about your project.

Sources

• McKinsey & Company, The business value of design (McKinsey Quarterly, October 2018).
• Design Management Institute, Design Value Index results (2015).
• IPA, Les Binet & Peter Field, The Long and the Short of It.
• Marq (Lucidpress), The State of Brand Consistency (2021).