Packaging is an integral part of the investment a company makes in its attempt to sell products and services successfully. Packaging design helps create a brand identity, which isn’t only important for businesses that sell a physical product, but also for those offering services in a competitive marketplace.
Successful packaging design has a significant impact on marketing ROI, or Return on Investment, in both tangible and intangible ways. Not only does a great design concept help companies attract new customers and increase their visibility, but it can also help retain existing customers and build more brand loyalty.
Of course, packaging design needs to be in line with other brand assets, marketing initiatives and strategies for it to be truly successful.
How Does Measuring ROI Help with Successful Packaging Design?
By understanding and estimating how various packaging-related investments will affect returns, companies can reduce risk and maximize value. The benefits to be gained from each investment need to be understood, evaluated and compared against other options to ensure they are indeed the best choice.
For instance, investing in a new style of packaging scales could help cut down the time and cost of operations, as well as improving workplace safety. Or, working with a new packaging material or design may offer better efficiency and reduce waste over the long term.
This is one aspect that needs to be taken into consideration while planning investments and allocating budgets, especially when it comes to approaching financiers. Convincing them to release funds for design and development projects becomes easier with empirical ROI measures and effective data!
ROI in Packaging: What is the “Investment”?
In the packaging sector, investment may be defined as any fees, charges or expenses involved in design, equipment or setup at every stage of the packaging process. These are not limited to packaging design alone, but also account for spreading awareness through marketing or sales strategies.
Here are some examples of common investments: • Cost of goods and raw materials • Cost of equipment, such as packaging scales • Costs involved in changes to the production process • Fees and charges for a design company • Tooling, engineering and distribution costs • Costs of manpower, labor and staff • Depreciation or write-offs for older products and material • Costs of promotional, sales and marketing activities
Packaging design will affect most of these costs in one way or another, but successful packaging design also has a significant impact on the returns.
ROI in Packaging: What is the “Return”?
Increased footfall, sales, market performance and other hard, quantifiable impacts are usually considered while calculating returns on any investment. However, you should also look at soft or less-easily defined returns such as increased brand awareness, reputation and employee satisfaction. Today, ROI is usually defined as a combination of the two.
Here are some typical examples of returns in packaging: • An increase in footfall or visitors • An increase in dwell time • An increase in market share or sales • Lower carbon footprint and greater use of sustainable materials • New conceptual research or innovations for potentially extending the product line • A decrease in calls to customer helplines, as a result of clearer information on packaging • Changing perceptions or competing with rival products/services through rebranding shifts
Compared to hard returns, soft returns seem more difficult to define, but their impact can be measured using a variety of different research methods.
Why Should Packaging Design Be Treated as an Investment?
The time and effort a company puts into packaging design rarely goes to waste. In fact, consistent and effective design can become the entire backbone of a brand’s marketing efforts.
At the same time, it’s crucial to retain a focus on quality as well, whether in terms of packaging material or weighing scales and other equipment used to handle a product. Remember, if a certain investment may lead to higher ‘hard’ or ‘soft’ returns, it’s definitely worth exploring! Kevin Hill is the content editor and online marketing manager at Quality Scales Unlimited. Always an early adopter and fast learner; Kevin combines his technical knowledge with content marketing in creative ways to give Quality Scales Unlimited a competitive edge.
Editorial Note: This post was shared by a member of the BXP community and edited by our editorial staff. Do you have news to share with our readers or a package design project that you are especially proud of? Click here to learn how you can become a contributing member of the BXP Magazine online community.