13. How Do You See a Return on the Investment in Packaging Design?

Let’s break down why the investment in packaging design for a product business feels a little scary. It’s expensive, another expense, and you don’t always know the outcome. So how do you know if investing in packaging will get you a good return on your investment?

• Why investing when you have a product business is unique

• Considering both the expense of packaging design and producing the packaging

• How most product businesses default to DIY and home printing

• How business goals connect to packaging ROI

• 3 ideas for measuring the return on investment of packaging design

Hi, and welcome to Product Packaging and Profit, where we help product-based businesses turn packaging design into a competitive edge to attract customers, grow sales, and boost profits.

I'm Kelley Kempel, After 20 years of designing packaging for national retailers, I founded Hidden Path Creative, a graphic design studio that supports entrepreneurs with branding and packaging to get their products seen and sold. I'm sharing the secrets that launched big brands so your products can stand out.  Let's get started.

Intro

 Welcome back to Product Packaging and Profit. I'm so happy to be here with you today and this week I want to talk about a problem that you might be facing in your product business, and this might not be the typical problem that you think about, although you may think about it if you're wondering if you should be upgrading your packaging or not, but it's the problem of.

how do I see a return on the investment in packaging design? So I know that you are faced with so many different investments in your product business when it comes to running your business. You have to invest in the product itself. Running a product-based business. It can be a really scary feat because you are buying the inventory and holding it before you sell it, and that means that you have a lot of cash and resources tied up in your product.

Episode Transcript

So the thought of perhaps putting more. Into your product that you're not sure you're gonna see back or you're not sure that is the right investment can be a roadblock to leveling up. Other parts of your business, whether it's packaging your website your marketing, your messaging, or your branding, you already have to invest in so many other things.

You have to invest in the materials. You have to invest in making the product, whether it is spending the time personally to make the product or paying somebody else to help you make the product. And so you do have to think critically about where. Spend those dollars in your business above and beyond the product itself.

And one of the things that I talk to clients and potential clients about when we first get started is, what are your goals? What is the next step in your product business? Are you looking to? , whether it's volume or are you looking to scale by adding additional income streams, aka adding additional sales channels, whether that is adding your product to Amazon, getting more wholesale accounts and listing your product on Fair or Juniper market, or one of the other great wholesale marketplaces that connect you with lots of.

boutiques and stores, and taking a critical look at what your goals are, whether it's to increase your sales by a certain percentage, or increase the number of people that you attract to your website or to your table. Having a really good idea of how you view that success for your product business will be one factor.

that will help you validate how good of an investment packaging design would be in your business. Because I get it, packaging design is expensive, and it's not just the design itself, it's the production of that packaging because you need to order that packaging from somewhere. So let's say you work with a designer like myself and you get a beautifully designed one.

Custom box in the material you want, in the size you want with your colors and beautiful graphics, and you just, you see this render from a designer and you're like, oh, this looks amazing. I know my customers are going to love this. It's gonna be beautiful. It's gonna be shareable. And then you go to find a printer and you find out what the cost for this package is.

a lot more than you thought, and I never wanna see my clients in that position, but, that sometimes happens. So you have to think about not just what it costs to get your package design, but what is it gonna cost to produce the package. And I know that for a lot of product businesses that are just starting up, you kind of wonder.

what is the right cost for that? Not just whether or not I'm gonna see this return on investment, but what should I be paying a designer? What should I be paying to get my box printed and delivered to me, or my tag or my label, and, oh, this is just, it's too much. It's a lot. I can just do it myself. I can do it myself.

I can print it at home, I can do all of that. And then you wind up investing. Time into that design, which is totally, totally okay. But I know that that's one of those roadblocks is how much should it cost. How much should I budget for this, and then how do I see the return on that investment? It's so very nebulous.

It's so very intangible and, I can see that that's a major challenge for product businesses across the board. When you're looking at where to invest your money, invest in your business. The question is, why should I invest in packaging over something like getting great e-commerce product graphics?

You know, I could spend that money on getting the packaging designed, or I could spend that money on getting graphics done for my Etsy listing, for my Amazon listing that incorporates photos of my product and messaging about my product and tell that story. And don't get me wrong, I think that that is actually great.

Having really amazing product graphics on an e-commerce site that show and tell about your product can help make. Sale. So you might be choosing between those two different investments in marketing your product. And I also understand that there's a risk involved in hiring a designer to custom-design your packaging means that the risk is higher.

I understand that. You have to decide who to work with, and then you have to pay them and you're not quite sure what you're getting back. You've contracted for a box, a label, whatever format you're looking for, but you don't know what that end result is gonna look like because it's a process, right? It's a creative process, and your designer is bringing in expertise and you are providing some information, and it's like this.

Alchemy that happens behind the curtain, and can that really be worth it? Or she or should it, does it just seem too hard? So we stop and say again I, I don't wanna do it that way. Or I don't wanna spend money to get something that I don't like or I don't love. Or how do I know that people will? And then also how do you know which designer to pick?

How do you know what to spend? What's a fair price? I talked about that a little bit earlier. Like what's the fair price for printing? What's the fair price for the package itself, but also what's a fair price for that design? It's so interesting to me that a lot of times on first calls with.

Potential clients. I'll ask about a budget and I'd say over 50% of the time, the answer is, I'm not sure what this costs. So I'm, I don't have anything budgeted for this, or, I don't know what my budget should be for this, and I get it, but I, it's also your business and I want you to take control of your finances rather than being at the mercy of.

Your service providers, I want you to have an idea of what you're willing to spend to invest. So this is all to say, I get where you're at, you are. You got into your business to make a product, whether it was to bring a product to life that you weren't seeing on the market that you needed, or whether you are a maker and you have a passion for your art and other people love it too.

So you are producing your craft and you wanna get it into the hands of others. I have seen it. so much that packaging can really present your product to the world. Take what you have and give a spin on it that connects with others, but you also have to feel comfortable with what you are investing. So before we can really break down what the true return on investment, Is investing in packaging design.

I think it's really important that you as a business owner, take stock of what your business goals are. Are you looking to increase sales? Are you looking to get into stores or create more wholesale accounts? Are you looking to increase your reach and visibility by having customers share? Product. These are all things we can measure.

These are outcomes that we can identify at the beginning of your packaging design product. And then once we've launched your new packaging, and over the course of a month, three months, six months, we can look at those factors and that. and see how your investment in packaging has paid off. Because if your goal is to just increase sales, not, not create new sales channels, that's pretty straightforward.

You can see those numbers. Now, maybe not all of those numbers can be attributed to the packaging, however, If you see a pretty significant jump after you've redesigned your packaging, that's a pretty telltale sign that it at least impacted your sales. If you see things being flat, pretty much status quo, then it didn't help so much.

It's an experiment just like everything else you're doing in your business. If the goal was to increase your sales channels, to get new wholesale accounts. That again, is going to be a measurement that we can look at. We can look at how many wholesale accounts you had before your packaging update. And again, one month, three months, six months, we can look at how many wholesale accounts you have there, and I love updating packing.

with the goal of getting into more stores because not just your product, but your packaging really helps stores to sell your product. So when you, when your packaging is designed to look great on a shelf, attract attention and brag about the benefits of your product, that means that store owners. Don't have to stand there and talk about your product, and that means that's a win for them.

They want products that are gonna be in their store that look great, that attract attention and that sell without them having to do much else. Then put it on the shelf and make sure that the display looks great. Visibility is just such an exciting metric to look at as well. So if you are. . If one of your goals is around how to or expanding your reach, expanding your audience for your brand, and you update your packaging design, you incorporate a call to action or you incorporate a specific hashtag that you want customers to share your product using, and you include that on the packing.

That makes it really easy to see that return on investment. It makes it really easy to see how many shares you are getting off of that design, off of that call to action. Those are just three ways that we can measure the return on your investment when it comes to investing in packaging and packaging. I hope that that was helpful to you in terms of thinking about how you might really assess, the value of that investment for your business.

This is by no means and ask to say, go do it right away, but I just wanted to open up the conversation in terms of how we know it's working. How do we know our packaging design is working? and we have plenty of ways to look at the metrics. They just might be a little indirect. So we have to get a little creative in terms of how we establish those goals and then, and then when and where we measure them.

In Closing

Thank you so much for joining me today. I really appreciate you listening to Product, Packaging, and Profit, a podcast for product entrepreneurs looking to level up with packaging. I hope you'll join me next time to hear more about how packaging can help propel profitable product businesses. If you enjoyed the show, please rate and review us wherever you're listening and be sure to come back next.

Until then, this is Kelly Kempel of Hidden Path Creative. And don't forget what's on the outside matters too.