Return on Investment in User Experience (UX)

Usability and User Experience (UX) are familiar terms for anyone who has developed a digital project. While user-centered design is part of the DNA for many of us, sometimes we have to "convince" our superiors or colleagues when analyzing the convenience of investing in user experience. Therefore, it's always a good idea to review some concepts and figures to understand why it's so profitable.

We will also discuss the importance of design in building a company, a topic that has been debated in business circles in recent years, while organizations like Google are already successfully demonstrating that it is the essence of innovation and the development of new products and services.

Brief conceptual review

What do we mean by usability? Simply put, it's about making the design of a service, website, or object as easy and comfortable as possible for users with an average level of knowledge to use.

For Jakob Nielsen, considered the guru of usability, it is a "quality attribute" that measures the ease of web interfaces and is based on three fundamental pillars: ease of learning, ease of use, and flexibility. This translates into the naturalness and degree of intuition offered by the service so that the user can deduce interaction with the system; the effectiveness and efficiency in its use; and the possibilities of information exchange [1].

Specifically, if a website is well designed, the user interacting with it will be able to successfully achieve their goal: find information, sign up to receive a benefit, or buy a product online. If this goal is met, those who invested in that website will also be very satisfied, as the conversion rate will be as expected.

When we talk about User Experience (UX), although there are attempts to define or conceptual frameworks to explain what UX is, there is still a lack of consensus on the definition in both academia and industry. The truth is that interfaces and digital services have become not only useful and usable, but they must also be interesting and evoke "something more" in the end user. Hassenzahl and Tractinsky [2] refer to these emotional, affective, and experiential attributes that complement instrumental aspects, which are closely related to a specific need.

In this sense, UX is a consequence of something, and as some authors mention, designers cannot design THE experience ([3], [4]) – since it is individual, unique, and personal – but rather FOR a certain experience. When designing for an experience, it is fundamental to define objectives, and the source of these objectives lies in user studies, a theoretical basis, standards, best practices, and common sense [3].

What does my business gain?

Returning to the initial question – how to sell UX internally – estimates of the profitability of investing in Usability and User Experience projects vary from a return of $2 to $100 for every $1 invested. This is stated in the study "The Business Value of User Experience," asserting that if users have a good experience, this "translates into savings, while a bad user experience can have a serious impact on sales, satisfaction, and costs" [5].

In terms of metrics and business impact, this means:

• Increased sales or conversions, because your goal and the user's goal are met (for example, successfully completing a purchase or subscription), after navigating without difficulty through all the necessary steps to the goal. In other words, a product or service where the customer has a good user experience will sell better, and unlike products that are experienced long after purchase, websites are experienced immediately. Currently, ease of use and design quality are sales strategies for leading companies like Google, Apple, and Amazon.
• Greater customer satisfaction and loyalty, because if a website is meeting its objectives, customers decide to return, and it is much less likely that you will experience high churn or subscription cancellation rates. According to an Avaya survey, more than 75% of consumers stated that they would likely continue making purchases if their customer experience with a company was exceptional, while 82% would stop spending money where their experience was poor [5].

Investing in usability and user experience also impacts web traffic and usage behavior metrics, such as some KPIs that are easily measured with tools like Google Analytics:

• Decreased bounce rate, which means getting users to spend more time browsing the different pages and flows of your website. Another sign of increased satisfaction with the services you are offering.
• Increased conversion rate in transactional flows related to objectives such as lead generation or sales prospects, sales, transaction completion, and others.
• Improved findability or brand positioning in search engines like Google. By applying SEO techniques for your website and each of its pages, you will gain positions in the results generated when someone performs a search associated with your business, and your brand will gain awareness among users. With this, all the other benefits we have mentioned will be possible, because if your site is indexed in search engines, it will be easier for users who don't know you to find you.

What the studies say

In "Designing for Success: Creating Business Value with Mobile User Experience (UX)," the authors start from the premise that optimized websites "are likely to have a greater positive impact on a company's ROI" [6].

This was measured using Google Analytics on a real e-commerce website, comparing consumer behavior one year before and one year after the website was optimized for mobile devices.

The results were as follows:

• Unique views increased by about 40%
• Bounce rate decreased by 50%
• Sales of the tested product increased by more than 30%
• The number of all products sold through the mobile-optimized site increased by 70%

Internet browsing through mobile devices grows every year worldwide because they provide a quick and easy way to access the Internet. But this study states that "while designing websites for various screen sizes has been one of the main topics in web development circles, little work has been done to look at the mobile user experience from a business perspective" [6].

Ultimately, making the customer experience easy and satisfying with clear messages and intuitive flows, from the moment they start their search until they decide to make a purchase, can only bring positive results for your company.

The role of design in business success

For professionals dedicated to designing digital services, the term "UX" may fall short, as the boundary between one contact channel and another is becoming less evident every day. For this reason, we are increasingly seeing the use of a framework focused on design in general and service design in particular.

But why is design important? According to "The Future of Design in Start-Ups," among businesses that report significant profitability, there is already a strong conviction that including design in the company's building strategy had a direct impact on its success, led to increased sales, and contributed to its valuation [7].

The responses of more than 400 participants, including startups, agencies, and independent companies from around the world, were analyzed. 87% of respondents stated that design was important or very important, and 85% of companies have founders or C-level executives who influence design decisions. And almost a third had a designer as part of their founding team.

The most interesting part of the study's introductory article is the mention of the concepts that the respondents themselves are applying in their businesses. Let's review some:

Design adds value to the consumer and the company: these companies' efforts are equally invested in hiring designers and committing to design as part of their strategy. This is how a large number of their founders are designers, "which bodes well for the current and next wave of delightful-to-use, user-centered products to help them win in the market" [7].

Key characteristics of a design-centric organization: all agreed on six, in this order of importance:

1. Design integrated across multiple areas
2. User-centered
3. Dedicated design team
4. Designers as part of the C-level or executive team
5. A founder who is a designer
6. Equal ratio of designers to engineers

The authors of the study highlight that these companies believe that "design should not only have a seat at the table, but it should be functionally integrated, which is a key point and a concrete action that teams can execute as they build the product, and much more specific than just saying there should be 'Design Culture'" [7].

The war for design talent will continue: most companies reported that they will increase their design teams by 50% at all stages of growth. Furthermore, product designers are so in demand that 70% of more mature companies are looking for them.

The authors of the study state that the importance of design in building a company is being discussed worldwide, and leading companies like Google, which achieved success by embracing design, are being observed. However, they warn that there is still very little data on why, when, and how to integrate it into company operations.

We will be attentive to continue disseminating advances in this trend.

If you are a professional leading UX projects or simply think that your organization should put the user at the center of its decisions, we also recommend reading:

• How to convince your boss to invest in usability and user experience
• Usability: what it is and why it should matter to us
• 15 common mistakes in a usability test with users

 

References

[1] Usability 101: Definition and Fundamentals – What, Why, How (Jakob Nielsen’s Alertbox). 

[2] Marc Hassenzahl & Noam Tractinsky (2006): User experience – a research agenda, Behaviour & Information Technology, 25:2, 91-97.

[3] Eija Kaasinen, Virpi Roto, Jaakko Hakulinen, Tomi Heimonen, Jussi P. P. Jokinen, Hannu Karvonen, Tuuli Keskinen, Hanna Koskinen, Yichen Lu, Pertti Saariluoma, Helena Tokkonen & Markku Turunen (2015): Defining user experience goals to guide the design of industrial systems, Behaviour & Information Technology, 34:10, 976-991.

[4] Virpi Roto, Heli Väätäjä, Effie Law, Rachel Powers (2016): Experience Design for Multiple Customer Touchpoints. NordiCHI ’16. Proceedings of the 9th Nordic Conference on Human-Computer Interaction. New York, NY, USA : ACM, 2016. 146.

[5] The Business Value of User Experience (Jim Ross, D3 Infragistics Services).

[6] Designing for Success: Creating Business Value with Mobile User Experience (UX) (Soussan Djamasbi, Dan McAuliffe, Wilmann Gomez, Georgi Kardzhaliyski, Wan Liu, Frank Oglesby).

[7] The Future of Design in Start-Ups Survey: 2016 Results (New Enterprise Associates).