roi ux intro guide

[Intro guide] The ROI of UX

Article written by Meghan Hartman as part of the Design Writing Apprenticeship.

The concept of “value” has been weighing on my mind as of late. I’ve been wrestling with some heavy questions like, how do I bring value to the world through my work? and, perhaps more importantly, how do I explain what I do in terms of the value I bring?

“User Experience” may seem like a vague, subjective, and unmeasurable concept. Perhaps you associate it with software companies and think it’s something you do when designing an app. But that thinking is all wrong. Don’t worry, though, you’re not the only one to have such a casual understanding of the benefits of user experience.

As a UX Designer, I feel like I’m constantly evangelizing my work to stakeholders and potential clients. They want to know – as any savvy business owner would – that they’re investing in something that will yield real results (usually saving money, time, or both). But, what they don’t seem to realize is that the processes used in UX design are the same processes that build a successful and sustainable business.

The reality is that great UX design can differentiate products, attract customers, and drive superior business results, so there is no inherent contradiction between investing in User Experience and a business focus on creating customers and profits. – Pabini Gabriel-Petit, UX Matters

The six areas of business that can improve ROI (return on investment) from user experience are: revenue, customer retention, team productivity, support costs, development costs, and development time.

Essentially, these boil down to two core components: money and time.

If you’re a bootstrapped entrepreneur, then understanding ROI can help you craft a product without bloat right out the gate.

If you’re a UX designer interested in selling yourself as a UX consultant, then understanding ROI can help you differentiate yourself from other designers. Let’s dive in.

ROI Component #1: Money 

roi ux intro guide increase money

You can’t run a sustainable business without cash flow. Regardless of your ideals or desire to change the world, your business needs to generate money to operate. By investing in good UX, you’re setting your business up for competitive growth.

Consider this statistic: design-centered companies have outperformed the S&P by 228% in the last 10 years. (DMI Dialog Blog)

How much revenue can you expect to see from your investment in user experience?

  • According to IBM, “every dollar invested in ease of use returns $10 to $100.”
  • Staples increased their online revenues by 500% after their UX-focused site redesign. (Human Factors International)
  • Jared Spool, the founder of User Interface Engineering, has projected that a simple tweak to the UI of Amazon has contributed roughly $2.7 billion in revenue. (UIE Articles)

Spending a bit of time and money on crafting a delightful user experience can translate to massive revenue growth. But can UX save you money too?

How can investment in user experience cut costs in other areas of business?

You probably know that it takes more money to get new customers in the door than it does to get returning customers. That’s why, increasing customer retention also saves money.

Let’s see what the numbers have to say about the correlation between UX and customer retention:

  • “88% of online consumers are less likely to return to a site after a bad user experience.” (InvisionApp Blog)
  • The Rockefeller Corporation, in a study on consumer behavior, found that 68% of consumers will switch to a company’s competitor when they don’t feel valued. (Smashing Magazine)

For companies that sell digital products, a lot of time, energy, and money goes into developing that product. But the sad truth is, without the proper user research they often fail. According to an infographic by Experience Dynamics, “70% of projects fail due to lack of user acceptance.”

By integrating proper user research and testing into your digital product development, you have the potential to save millions of dollars. In fact, one major computer company saved $6.8 million within the first year following a redesign (that savings was worth 100 times more than the initial investment). How’s that for ROI?

ROI Component #2: Time

roi ux intro guide decrease time

We all know the saying “Time is money.” One could argue the truth behind this old adage but, when it comes to business, time often comes with a monetary component. If you could decrease the amount of time employees spent in development or in handling customer service requests by having a user-first approach, wouldn’t you make that change?

What if you could increase the productivity of your team? Well, by focusing on enhancing your user experience, you can.

Paul Boag wrote about the incredible inefficiencies of just signing up for the National Trust. A 9 step process can be simplified to 5 steps or less, which in turn saves an incredible amount of time (employee labor).

Whether it’s at the local grocery store or doctor’s office, it’s obvious how small operations can save time and money through better UX practices. With businesses at a bigger scale, user experience is that much more indispensable.

UX is essential to business

The processes of user experience design are the same processes required to build a viable and sustainable business.

AirBnB attributes UX for taking them from near-failure to being valued at $10 billion. Jeff Bezos invested 100 times more into customer experience than advertising during the first year of Amazon (Forbes). Tom Proulx, co-founder of Intuit, was one of the pioneers of usability testing and emphasized ease of use in his products (Wikipedia).

UX is not just about design. It’s about a holistic strategy. You’re creating a vision and a plan that will both delight users and provide tangible business results. Better UX increases team productivity because you won’t be wasting time questioning different options or ideas.

If you’re an entrepreneur, you probably have giant to-do lists of tasks demanding your attention. By focusing on just one thing – improving the user experience of your website or product – you’ll get more time and money as a result.

If you’re a UX designer, understanding ROI can helps differentiate yourself as a designer by speaking the same language as business owners.

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