6 Business Concepts Designers Must Master
Max Stepanov
Product Design Lead. UXD, UXR, and HCI specialist. Experience in Product Design and Development, Design Management, and Digital Communication
Mastery of UX or visual design alone isn’t enough to make a designer truly indispensable. To have a profound impact, designers need to understand the broader business context in which they operate. Successful design doesn’t just solve user problems; it also aligns with business goals, drives revenue, and helps companies outmaneuver their competition. This requires fluency in key business concepts that might initially seem outside a designer’s purview.
Who Are Our Competitors, and How Do We Stack Up?
What
Business empathy means understanding the competitive landscape — not just who the competitors are but how they operate, their strengths, weaknesses, and strategies. It goes beyond user empathy and focuses on business dynamics.
Why
Designers often think their job is solely to meet user needs. However, understanding competitors can illuminate why certain design decisions are crucial for maintaining competitive advantages. For instance, a competitor might provide a seamless checkout process that is faster than yours. In this case, a design that merely meets user expectations might not be enough — you need to exceed them to stand out.
How
Conduct Competitive Analysis
Take the example of Spotify and its approach to business empathy in the highly competitive music streaming industry. When Spotify launched, it was entering a market dominated by services like Apple Music, Pandora, and Tidal. Each competitor had different strengths — Apple Music had the advantage of being deeply integrated into Apple’s ecosystem, while Pandora focused on personalized radio and discovery, and Tidal emphasized high-quality sound and artist-friendly royalty structures.
Spotify’s competitive empathy meant understanding not just the functional offerings of these competitors, but how their business models, brand positioning, and user experience shaped customer expectations.
While competitors provided similar music libraries, Spotify excelled by focusing heavily on personalized discovery (differentiation through personalization) through playlists like “Discover Weekly” and “Daily Mix.” This wasn’t just about offering music, but about crafting a unique experience that made users feel like the platform understood their personal tastes better than anyone else.
Spotify realized that music discovery is a social experience, so they integrated features that allowed users to share their playlists and listen to what friends were enjoying in real-time (differentiation through social integration). This empathy for user habits provided an edge over more feature-restricted platforms like Apple Music at the time.
Spotify further empathized with user reluctance to pay upfront by offering a robust free version of its product (differentiation through freemium model). By understanding that cost was a barrier for many users, they used the freemium model to engage a wider audience before converting them to paid subscribers.
By continuously evaluating what competitors were offering, understanding how customers were interacting with them, and identifying gaps, Spotify was able to carve out a competitive edge, driving innovation and user engagement in ways that the competition had overlooked. For designers working within such a company, this means staying hyper-aware of not only user needs but also competitive shifts, ensuring every feature and UI decision strengthens the company’s unique position in the market.
2. Business Strategy
What Decisions Do Companies Take to Win Markets?
What
Business strategy defines how a company plans to outperform its competitors. It involves making decisions about products, pricing, distribution, and brand positioning to achieve long-term goals and sustainable competitive advantage.
Why
Design decisions should align with broader business strategies. Whether the company is pursuing cost leadership, differentiation, or a focus strategy, your design must reflect and support that strategic choice.
How
Align Design Goals with Strategic Objectives
A prime example of strategic decision-making can be seen in Tesla’s market strategy. When Tesla entered the automotive industry, they didn’t aim to compete directly with traditional car manufacturers by creating an affordable electric vehicle (EV) for the mass market. Instead, Tesla pursued a differentiation strategy that focused on building high-end, luxury electric cars, starting with the Roadster, then the Model S.
Tesla’s strategic decisions were:
These strategic decisions allowed Tesla to first dominate the luxury EV market and gradually expand into more affordable models like the Model 3, positioning them as a leader in the electric vehicle industry. For designers at Tesla, this meant aligning the UX and product design to reflect premium quality and innovation, ensuring that even the user experience in their vehicles and mobile app reinforced their brand’s strategic position in the market.
3. Business Models
How Does a Company Generate Value and Revenue?
What
A business model describes how a company creates value, delivers it to customers, and captures revenue. It involves understanding revenue streams, cost structures, and value propositions.
Why
When you understand a company’s business model, you can design to optimize for value creation and conversion. For instance, if your product’s revenue model is based on ad impressions, your design needs to encourage more user engagement and time on the platform.
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How
Map the Business Model to Your Design
For a freemium model like Spotify, the free version encourages users to upgrade to premium by strategically using design elements such as disruptive ads and limited features in the free tier. Every design choice, from the player interface to the settings menu, reinforces the freemium-to-premium funnel.
4. Prototyping with Numbers
How to Estimate & Validate a Design’s Potential?
What
Prototyping with numbers refers to incorporating quantitative thinking into the design process. This means using data and metrics to estimate how design changes will impact business goals and user behavior.
Why
Prototyping with numbers allows designers to validate ideas before they are fully built. It ensures that design is driven not just by creativity but also by measurable outcomes.
How
Use A/B Testing to Validate Assumptions
Example: Consider an e-commerce website redesign. Before implementing a complete overhaul, designers can test whether changes in CTA button color or placement increase conversions. If a prototype of a new checkout design results in a 15% increase in transaction completions during testing, it can be greenlit for development with data to support its potential.
5. Business & Design Metrics
How to Use Metrics Without Losing Empathy?
What
Business and design metrics provide quantitative insights into how a product is performing. They include user engagement, conversion rates, customer acquisition costs (CAC), customer lifetime value (CLV), etc.
Why
Metrics can validate design decisions and prove the ROI of design initiatives. However, focusing solely on numbers can lead to design decisions that neglect the human aspect of user experience. The goal is to balance empathy with measurable success.
How
Pair Business Metrics with UX Metrics
A financial services app might optimize its onboarding process, reducing the time to sign up by 30%. However, if users feel overwhelmed by the speed and don’t feel informed, churn rates might increase. Combining metrics like onboarding completion time and NPS (Net Promoter Score) ensures you’re not sacrificing user experience for efficiency.
6. Impact Design & Design Impact
How to Become a Company’s Favorite Designer?
What
Designing your impact is about making yourself indispensable to the organization by demonstrating how your design decisions contribute to the company’s overall success. This means consistently aligning design work with both user needs and business goals.
Why
Designers who understand their business’s goals, can prototype with numbers, and navigate business strategy are invaluable assets. You become not just a designer but a strategic partner in driving business success.
How
Showcase Design’s direct impact on Business Goals. For every project, clearly articulate how your design decisions have impacted metrics like user retention, conversion rates, or customer satisfaction. Being able to present tangible results makes your contribution unmistakable.
For example, a designer at a subscription-based SaaS company could measure and present how improving the onboarding UX flow increased trial-to-paid conversion rates by 20%. This shows the designer’s direct contribution to business revenue and strategic success.
Afterwords
Whether you align your design with business strategy or use prototyping and metrics to validate decisions, integrating business thinking into your design process will elevate your role within the organization. Your ability to influence not just the user experience but also business outcomes will make you a more effective, indispensable designer in any competitive market. 🤷🏽