Written by: Brad Darby, Principal, CG Infinity Inc.
When it comes to User Experience (UX) initiatives, oftentimes, there is little buy-in from executives and even project teams. Some may say that the investment is not worth the reward or that the UX team can be brought in later in the project, where in reality, the UX team needs to be involved early during the planning & design phases. A cultural change within an organization to squash those ideas is quite the mountain to climb but is not impossible to overcome. First and foremost, the UX designer or team must fully understand any short- or long-term business goals. Once those goals are defined, then the UX team can shift its focus to preparing the return-on-investment (ROI) analysis for their initiatives.
ROI for UX
The main reason for UX design efforts is to prove its functionality is beneficial for the users, which will build credibility and retention for the organization. When providing an ROI analysis advocating any new designs, it can also highlight that it is beneficial for the business. When calculating the ROI for any project or design, it should focus on addressing the key performance indicators (KPIs) of the business goals. The KPIs will be driven by the type of business and product or application that is being analyzed. For example, if you are trying to improve a customer support application, you will likely try to reduce call times or the number of cases for support reps. Or, if it is a retail application, the KPIs could focus on retention and conversion rates. At the end of the day, ROI may not always have to be geared to a financial gain (although executives usually will focus on that); just know the audience you are presenting to.
With all that being said, these are the key components to consider while developing your ROI analysis:
- Increased Revenue
- Higher conversion rate vs. drop rate
- Increased credibility rating
- Cost Savings
- Higher retention rate vs. acquiring new customers
- Decreased wasted time by employees
Time is Money
We all know the classic saying, “time is money.” Providing a comprehensive UX design strategy is essential to grow a business and meet business goals. This will help set the business up for long-term success. If your design enhancements allow a customer support rep to handle 2-3 times as many support cases, or in an even better case that the designs reduce the actual number of cases, this will allow for better utilization of ‘saved time’ in other areas. Becoming more efficient should generally translate to money saved and potentially in money realized.
Another scenario in which designs can save time would be for a home loan sign-up process. If it took you 10 steps with company A, or 6 steps with company B…which company would you be more likely to work with again? Most likely, you would work with company B again. Company B may show a higher completion/conversion rate and should benefit from positive reviews or word of mouth (free advertising) simply by saving the customer ‘time’.
Developing an ROI proposal can be intimidating and time-consuming, depending on the level of detail you go into. I recommend focusing on the big picture and doing enough to paint your picture of what success looks like to meet the desired business goal. This will be more effective in getting your point across and getting buy-in from the appropriate parties. Many UX teams may be afraid of preparing an ROI analysis because they want it to be 100% accurate (like they believe their design goals are) or have never done it before. Always remember that there will continuously be variables externally that are out of your control (competitors or what employees do with their ‘saved time’) that could ultimately affect your estimates’ end result. However, do not let these concerns dampen your spirits. Do your homework, be confident in your analysis, and put your best foot forward when delivering your results. As long as your proposal addresses the business goals and thus improves the KPIs identified, the worst thing they can do is say no.
If you are new to ROI analysis for UX Design or would simply like a sounding board to bounce ideas off of, please reach out, and I’d be happy to dive into a conversation. Thanks for reading.