Return on investment (ROI) is a well-known term in the business world. However, the relationship between UX and ROI may not be as familiar.
In the realm of business leadership, where strategic decisions shape the future, User Experience (UX) design often raises important questions for leaders. This article is custom-crafted by our expert, Deepraj Kalsekar Managing Consultant at Knack Systems, for business leaders. It addresses the practicality and financial implications of UX design service investments.
The ROI Puzzle
As top-level decision-makers, you understandably scrutinize investments, including those in UI/UX design services. While considering new investments, you may want to know:
- How will UX design impact your financial performance and profitability?
- Can you expect a measurable ROI from this investment, and will it justify the associated costs?
- Will prioritizing UX design help you differentiate yourselves, attract and retain customers, and outshine competitors?
How UX Design Impacts Your eCommerce Performance and Profitability?
Businesses across industries are witnessing a growing trend towards improving their user experience. Stressing upon the importance of improved customer experience, Jeff Bezos at Amazon says, “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”
Investing in UI/UX design and consulting services is a proven strategy for enhancing business profitability. One of the biggest benefits of UX designs that has emerged during the last decade is the ability to see and create design from a customer’s point of view.
A well-designed user interface could raise your website’s conversion rate by up to a 200%, and a better UX design could yield conversion rates up to 400% - Forrester
Use cases of profitability and performance improvement by UX designs are many. Jared Spool, the inventor of User Interface Engineering said, a simple change to Amazon's user interface reportedly added approximately $2.7 billion in revenue. Virgin America, by reinventing its digital travel experience, gained a 14% spike in conversion rate, faster bookings (almost in ½ time) and 20% reduced customer calls. Hubspot doubled its conversion rate by changing its user experience. Continental Office increased its website traffic by 103% YOY and increased their net new contacts by 645%.
[Source: Think with Google - What Users Want Most from Mobile Sites Today]
For every dollar spent to resolve a problem during product design, $10 would be spent on the same problem during development, and multiply to $100 or more if the problem had to be solved after the product’s release.-Robert Pressman in his book Software Engineering: A Practitioner’s Approach
Can You Expect a Measurable ROI From UX Investment, and Will it Justify the Costs?
Yes!
Forrester Research provides concrete data, revealing that, on average, every dollar invested in UX design services brings a staggering $100 in return. This translates to an extraordinary ROI of 9,900 percent. For businesses, this means that for every $10 invested in UX design, there's a $100 return. It may sound modest, but for companies like Master Control, who invests about 1.2 million USD in UX design a year, that's an over $10,000,00 increase in profits in less than one year.
Meghan Hartman, a senior UX designer and strategist behind Crafting Creative, says, “User experience can improve ROI in six different areas; revenue, customer retention, team productivity, support costs, development costs, and development time”.
[Source: Think with Google - What Users Want Most from Mobile Sites Today]
A study by Toptal divided the UX design attributes into usability, workflow, consistency and brand perception and found ROI from improving usability (discoverability, UI standards, navigation) to be $300,000/year in cost savings and from workflow (user flow, interaction design, efficiency) $312,000/year in cost savings.
Can UX Design Services Help You Differentiate Yourselves, Attract and Retain Customers, and Outshine Competitors?
Yes!
The rapidly evolving landscape of technology has transformed traditional UX design processes. Designers now employ iterative approaches, often following the agile methodology, to validate features and adapt to changing user needs.
Differentiation:
- Unique Brand Identity: A distinct and enjoyable UX design can help you create a unique and memorable brand identity.
- Competitive Advantage: An engaging UX can be a powerful differentiator, enticing potential customers to choose your product or service over others.
- Innovative Features: You can introduce innovative features or functionalities that competitors may not offer, gaining a competitive edge.
Attraction:
- Positive First Impressions: A user-friendly and visually appealing interface creates a positive first impression. Users are more likely to engage with your product or services.
- Enhanced User Onboarding: When customers can easily understand and navigate your platform, they are more likely to sign up and explore further.
- Word-of-Mouth Recommendations: Satisfied users are more likely to recommend your product or service to others.
Customer Retention:
- Positive User Experiences: A smooth and enjoyable user experience keeps customers coming back.
- Reduced Churn: Prioritizing UX design can reduce churn rates by addressing pain points and enhancing customer satisfaction.
- Customer Loyalty: Consistently delivering a high-quality UX builds trust and loyalty. Loyal customers are more likely to spend more with your brand over time.
Outshining Competitors:
- Continuous Improvement: By constantly improving the user experience, you can stay ahead of competitors who may be less focused on UX.
- Adaptation to User Needs: By staying attuned to changing user needs and preferences and adapting your UX design, you can maintain a competitive edge.
- Data-Driven Decision-Making: Leveraging user data and feedback allows you to make informed decisions that outshine competitors who may lack such insights.
How Knack Systems Helps Leaders Gain Highest ROIs on UX Design Service Investments
UX and UI go hand-in-hand: ecommerce UX design is about creating easy and enjoyable interactions, which UI elements help you achieve.
Over the years, based on our industry experience and rigorous interactions with the leaders from different industry verticals, Knack Systems has arrived at a standard process for implementing UX. This tried and tested approach ascertains the success of our projects.
Our UX designers have the technical skills to build custom features and interfaces that deliver focused and expansive user options, but more importantly, we work with your IT teams and stakeholders throughout the development process.
Our process includes four steps:
STEP 1: Our team conducts qualitative and quantitative research, which is followed by interactive interviews with stakeholders. This helps us in building user stories and personas and understand the core pain points of your business.
STEP 2: For us stepping into your users’ shoes is very important. We think back to your user. What do they want and need from your site? We brainstorm with you to filter our ideas. Then, consider the best, fastest, and clearest path to get them there.
STEP 3: This is the most engaging step in our design process. With the insight our team receives from deep-dive research, we create rough wireframes and draft interactions. There’s a lot of two-way communication between stakeholders, developers and clients. Until we arrive at the best solution. Our recommendations are data-driven and we think through each element of the UI design to improve the UX.
STEP 4: We conduct High fidelity design mockups and follow them up by continuous (couple) feedback loop. We test, collect feedback, and make changes based on suggestions received from team members.
To keep your site fresh and updated with the latest features, we do periodic improvements.
Time and again this process has helped us in enhancing customer satisfaction and ensuring profitable growth for our clients.
Should You or Should You Not Invest in UX and UI Design and Consulting Services
Prioritizing UX design is a crucial strategy in today's customer-centric business landscape. It can set you apart, attract new customers, retain existing ones, and position you as a leader in your industry. It makes the ecommerce experience simple and satisfying for your users. It is an investment in your long-term success and competitiveness.
Our own experience at Knack Systems indicates that UX design services increase sales, lower cost of customer acquisition, spreads market share, increases customer retention, and reduces training costs.
As more and more consumers switch from the real-world to the digital world, creating equivalently vivid, if not better, experiences becomes crucial for digital businesses.
Note: When considering ROI calculations for UX, it's essential to treat them as estimations rather than predictions. ROI calculations provide valuable insights into potential benefits, but they should not be viewed as precise financial forecasts.
