The value of investing in UX extends far beyond financial revenue and well into brand loyalty, customer satisfaction, and much more.
And on the flip side, neglecting UX can damage your business and risk decreasing revenue, poor user experiences, and a decline in brand reputation.
But many companies don't dedicate much budget to user experience and design work. That’s often because senior management doesn’t fully appreciate how much UX improves their bottom line.
However, statistics revealed that, on average, for every $1 invested in UX, there was a return of $100 - an ROI of 9,990%.
The goal in getting investment from management is to quantify the true impact of UX on ROI for your business.
But how do you show the business impact of UX, when leadership wants to see the financial return? What metrics, outside of cash flow, can you show to support investment if your organisation is sceptical about the benefits of UX & Design? Or, if there is willingness to invest, how do you prove the on-going ROI of your UX efforts?
In our webinar, 383’s Head of Design, Karl Randay, discusses the impact and ROI of UX in depth, from quantifying financial benefits, to understanding other tangible impacts that investment in the discipline can bring to a business.
Learn how you can make the strongest case for UX investment for your business.
Watch on demand now, or scroll for the full transcript:
Transcript:
Today, I'm going to talk about a much debated subject that continues to divide the people making products and services from the people who own and run a business.
Poorly designed experiences can cost your company lost revenue, decreased engagement and high audience drop off. But many companies don't dedicate much budget to experience design and design work in general. That's often because senior management doesn't fully appreciate how much UX improves their bottom line.
However, statistics revealed that on average, for every dollar invested in UX, there was a return of $100. That's an ROI of 9, 900%. Ultimately, the goal in getting investment from management is to quantify the impact of UX and design on the ROI for your business. But how do you do that if your organisation is sceptical about investing?
Or, if there's a willingness to invest, how can you prove the impact of your UX efforts? In this session, we're going to look at a definition of what design actually is, and the variety of ways it can be seen and utilised. We'll briefly discuss the topic of ROI itself, and the different ways impact can be seen, before breaking it down to look at the different benefits and value of it in play.
We'll then look at some of the ways you can start thinking about how best to measure what we're trying to achieve through the implementation of this discipline in your business, before briefly touching upon the impact of not implementing design at all.
Now, starting from scratch, design can be a hard thing to measure and justify, especially when you're talking about the design of complex platforms, applications, or even new services, or when there's a lot of human psychology and behavioural modelling required.
But for a business or service of any kind, it's really important to understand how effective it can be and the kinds of effect it will have, not just on the people using the product, but to the very financial bottom line that pays for it to be there in the first place. Now before we get too deep into some of the detail, it's worth noting that I said design was hard to measure.
That's not to say it's impossible, just that there's one fundamental but simple principle you need to be completely aware of and super clear on right up front, and that's clarity.
Clarity is critical when it comes to understanding and defining the impact of design work, so before any pixel herding happens, there needs to be a shared definition of where the work is going, what we hope to achieve, and the vision for success.
So the first principle to take away from this is clarity, and a simplified shared vision comes before all else.
Now, beyond merely providing well crafted, easy to use, and genuinely helpful products and services, we need to be able to pinpoint what those needles are we're aiming to push, making sure that everybody involved, from the stakeholder all the way down to the folks making the thing, all speak the same language, all agree on the goals and what we're going to actually try and deliver.
Without this initial alignment, everything else would invariably follow very different directions and result in a completely fractured product. So now let's dig in.
Let's kick things off with a closer look at what we mean by design. At its core, design is invariably human centred. It puts the needs of the audience within the experience first, and aims to create solutions that are ultimately useful, Usable and desirable. When we talk about design, it's crucial to broaden our perspective.
It's not just limited to the visual appeal of a product or service, it's also about understanding people's needs, identifying their pain points, and crafting experiences that seamlessly integrate into people's lives. Things like accessibility ensures that everybody, regardless of their ability, can interact with, and benefit from, the design solutions.
There's also the topic of sustainability within design, ensuring that our work has a positive, long-lasting impact on both society and the environment we live in.
It's also not just about the problems people have right now. It's also about looking much more broadly at the potential for something to grow and evolve.
Learning from different industries and experiences to build a vision and understand how it can be more innovative in the future.
Design then has many different applications, including traditional print and branding executions, digital experience and service design, as well as industrial product design, sharing a great deal of similar methodologies with each other, as well as universal considerations for things like accessibility and sustainability. As we've just mentioned.
Focusing just on our area of product experience for a moment, there's a series of different stages where our expertise in design would be expected to perform any one of a number of different tasks. These range from being involved in organisational strategy right up front, research and the insights, all the way to service design, defining the product vision and designing various iterative releases of the products and services that we've developed.
Each with their own impacts, cascading out from the work itself. So, as we explore these impacts, keep in mind this comprehensive breadth, acknowledging that it extends beyond pixels on a screen, ink on a page, or the physical form of a product. It involves deep rooted research, empathetic understanding, strategic thinking, and the ability to synthesise information into innovative solutions.
Ultimately, simplifying it as much as possible.
So, why is ROI and impact important? What's the point in mapping out the effect of the discipline? Well, I'm hoping that all of this is actually rather obvious. Before we delve into the detail of design impact, let's clarify what we mean by ROI, which again, I'm hoping you all know, stands for return on investment.
ROI is a metric that gauges the profitability of an investment relative to its cost. In the discipline of design, this includes the resources utilised in the design process, and the subsequent benefits from performing the work itself. Traditionally, ROI has been seen as a single figure, derived from mathematically comparing the time, investment and resources required against the financial return projected out over a period of time.
Appreciating the value of design, however, is much more nuanced than just how it affects your revenue and bottom line. This is where we get, more broadly, into understanding the ROI of design as a bigger, more detailed view of its impact. Not just the business consuming the design services, but also for the audience beyond, and even the brand itself.
It goes beyond financial metrics to encompass changes in audience behaviour, brand perception, and overall organisational success, as well as efficiencies and a multitude of other areas.
Now, to understand the value and ultimately the impact of design, we need to break down where this impact can be felt across the whole experience from end to end.
So let's continue. By looking at the different ways and areas in a business that design can have a positive effect. Beyond the visible, tangible outputs, such as visually appealing products, seamless and fluid experiences, and clarity, design fosters a deeper level of both innovation and problem solving.
Where it greatly inherences audience satisfaction, this can be most easily evidenced and seen in growing loyalty and trust. Factors which are critical to ensuring that your audience are engaged and continue to use the products and services you provide for them. This also has a natural effect on acquisition, so new adoptions through people just wanting to get in on the positive experience they may be hearing about from their friends.
Now, a well designed product or service can also streamline processes within a business. It's not just about the exterior experience, but reducing costs and ultimately contributing to the organisation's growing revenue. Beyond all this though, the iterative nature of design allows for continuous improvement, aligning your offerings with evolving audience needs and market trends.
To put it simply, design is not just a one time investment, but a strategic asset that continues to develop and create benefit over time. Breaking down the different areas we can have an impact on gives us three distinct focal points. Business impact. Audience impact. Business impact can be seen through a variety of different aspects.
Well designed products and services can attract more customers, as well as being able to charge progressively more, leading to increased sales. Streamlined processes and improved operational efficiencies through design can result in significant cost savings for the business. Design can differentiate a business from its competitors, helping it gain a larger market share.
Investing in design gives a business a competitive edge in the market, contributing to its long term success and growth.
Now, audience impact is also fairly tangible. Designing products and services that are user friendly, enjoyable and accessible enhances customer satisfaction. Thoughtful design fosters loyalty and trust among customers, as we've already said, leading to increased retention and repeat business.
Design shapes the perception of a brand, which we'll go into in a little bit more detail in a second, creating recognition and positive associations in the minds of its audience. A positive user experience, driven by design, can attract new customers and drive adoption through word of mouth recommendations.
Brand impact, while less tangible than the others, sits much higher and can be far more wide reaching. With aspects like design helping shape and communicate a brand's identity, establishing a unique and recognisable visual language and personality. Consistent and thoughtful design building trust and recognition among customers, enhancing the brand's reputation, not just loyalty.
Well designed products and experiences. Fostering brand loyalty, encouraging customers to choose the brand over their competitors. Ultimately, they'll go and talk to their friends about it and then further fuel acquisition.
Design plays a crucial role in creating a positive brand image, influencing how customers perceive and interact with the brand, driving its popularity and its visibility.
So, thinking like a chemist, there's a fair chunk of elements and places that will show some kind of change, positively or negatively, when exposed to good design. But how do you measure them? Let's get into the maths bit.
So, Congrats on making it this far. Now we've got the concept of design out of the way, as well as what ROI is and elements of impact, where can we create that impact?
How do we go about measuring it as well? As mentioned before, it begins with clearly defined objectives and a shared understanding. What are the specific goals your design is intending to achieve? Well, we've just talked about a range of different things you can focus on and use to set your operational goals.
Whether it's increasing conversion rates, improving user retention, or enhancing brand loyalty. These specific details will guide your measurement efforts. And then these can be measured using a combination of quantitative and qualitative methods and formulas. Looking at factors such as revenue growth rate, cost saving percentages, customer satisfaction scores, brand recognition surveys, customer retention rates, and market share analysis.
By analysing these metrics, businesses can assess the effectiveness of a design and its contribution to their overall success. It just needs some maths and a good old rummage inside your financial performance data to figure out your projections over time. Auto incorporating tools like A/B testing or MVT testing can help assess the effectiveness of design variations, hypotheses, hypothesis, experiments in flight while not forgetting to incorporate analytics to track audience behaviour.
By combining quantitative and qualitative data, you can build a pretty comprehensive picture of the impact of your design efforts.
So, hopefully that's given you a few ideas of how to go about understanding the impact of design in your business and get started calculating the ROI. What happens when design is overlooked or neglected? The consequences can be profound. There's user dissatisfaction, increased support costs and a diminished brand reputation, just being the tip of the iceberg.
Without thoughtful design, products may fail to meet audience expectations, resulting in a loss of market share and ultimately your revenue going south. Furthermore, neglecting accessibility and sustainability can lead to exclusionary practices, alienating a portion of your audience and tarnishing the organisation's image.
The impact of not implementing design is not merely a missed opportunity, but a potential detriment to the very core of your business and its brand. One that's very hard to come back from. So that's it. A fairly dense but hopefully informative drive through things to consider and how design can broadly influence your business performance.
At 383, we've been fortunate enough to work across a wide variety of different industries and with a multitude of different audiences. So we've got a great deal of experience in how to adapt our view of both design and business impact. So if you need a hand in articulating and analysing the value of design, come and have a chat.
Thank you for your time and I look forward to talking to you in the future.
