The Value and ROI of UX
Companies know the value of great user experiences. They see customers signing up, joining, doing a free trial, or entering the funnel. They want customers to be satisfied, if not delighted. They see customers staying and being loyal.
The outcomes and results our company wants happen when teams create great customer and user experiences that naturally make people want to join and stay. These achievements can be quantitatively measured and compared to past or future numbers.
But do UX practitioners get credit for wins and improvements? Rarely. Why are other teammates thanked and credited, and UX is treated like they had nothing to do with great user experiences that brought our company success?
We did a live webinar with Cindy Brummer from Standard Beagle to talk more about the ROI of UX. Here are some key takeaways from that session.
Common UX issues that impact ROI:
- Lack of accessibility features alienates users with disabilities, which is 26% of US adults. This can result in lawsuits and lost customers.
- Beautiful designs that don’t function well frustrate users. Based on aesthetics, 75% of people will determine your credibility in under 4 seconds. But they still expect your system to work well.
- Poorly designed interfaces like forms can lead to lost sales. Small changes like requiring registration early in the flow can increase sales by 45%.
Benefits of investing in better customer and user experiences:
- Increased revenue. Better user experiences can lead to the actions we hope users will take, leading to achieving business goals.
- Increased conversions and customer loyalty. 79% of users will likely leave if they can’t complete their task.
- Reduced costs. Great user experience work cuts development time and costs by 33–50% by fixing issues earlier (or never creating negative user issues). By researching and testing earlier, we avoid wasting time on unused features and experiments destined to fail.
- Competitive advantage. There are many reports about the value of good UX, CX, and design. Time after time, big consulting companies report higher growth and performance statistics for companies that invest more in great user experiences.
- Good UX reduces Customer Support costs. Users are less likely to contact or need Support due to confusion, frustration, dead ends, and other negative experiences.
- Bad research wastes money. Cindy told a story about a survey that Walmart ran. Walmart’s decisions — based on the survey responses — created a $1.85B loss. We can tell when we lack the right evidence for a good decision. We fight over opinions because we don’t know what would work best for users. Our A/B tests, experiments, and product launches fail because we guessed incorrectly what would work best for users.
- CX and UX work helps us find and mitigate risk and waste. Evidence and knowledge around customer behaviors, needs, and tasks help us avoid risky decisions that can alienate users. Consider the high costs of delayed projects, failures, figuring out what went wrong, attempting quick fixes or larger redesigns, and customers leaving or downgrading because we suck.
How can we calculate the ROI of UX?
- Identify metrics to improve, such as conversion rate.
- Estimate increased profit from better UX.
- Subtract the cost of UX work.
- Give UX credit for their great work.
Tell data-based stories to showcase value.
“Thanks to UX research, we saved two sprints of work, which is worth $XX,XXX.” Calculate or estimate what the cross-functional team is paid. This is the money the company saved.
“Customer Support tickets about this issue cost us $X per month. Once we understood the root causes, redesigned the experience, and released that, we now spent only $Y on Support tickets related to this issue each month. We are saving $Z annually.”
Conclusion
CX and UX specialists and their work provide ROI that we can calculate and showcase. At some companies, we must fight to get some credit for these wins.
Connect with us or learn more:
- CustomerCentricity.com — our website
- youtube.com/@cx-cc — YouTube channel
- patreon.com/cxcc — online community and free mailing list
- cxcc.to/ckys — “Customers Know You Suck,” my recent book on improving customer adoption, satisfaction, and retention
