Design is the most important part of your product if you are not creating a new market because that's the only way you can differentiate your product. Everybody is going to have the same features and what you are really selling is your design.

When you launch a new product into a new market, the features (i.e. what it actually does) end up being slightly more important than the design. The design is obviously still important, but probably not the most important part of your product.

P.s. I really like the retro-beach lifeguard metaphor for customer service.