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UX design offers great return on investments

Sharan Grandigae
14th Jan 2019
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“Investment in UX is often the difference between businesses that grow and those that sputter.” - Roman Nurik, designer and design advocate, Google

When it comes to investing in UX for an organisation’s service or product, the question that comes up often is whether it is worth the investment or not. While the added value is not completely quantifiable, the results of great UX are very measurable and real. A study by Forrester showed that companies that invest in UX see lowered costs of customer acquisition, lowered support cost, increased customer retention and increased market share. Furthermore, statistics show that every $1 invested in UX brings $100 in return, which brings the ROI to a staggering 1,000 per cent.

There is enough documented evidence of software that integrates UX bringing in quantifiable returns. Multinational retail giant Walmart redesigned their ecommerce site, which alone resulted in a 214 percent increase in visitors. Bank of America increased its online banking registration by 45 percent after a UX redesign of the process. IBM’s report on user-centred design supports this claim noting that “every dollar invested in ease of use returns $10 to $100”.

Here’s a look at some of the benefits of implementing UX in apps, software, products and websites.

An uptick in revenue and conversions

The immediate result of great UX is an increase in revenues and conversions. If a user experiences a smooth journey with the product, website or app, it is more likely that they will make a purchase. Eliminating blocks that cause frustration, confusion and wasted time for users brings them to the point of purchase quickly. Ultimately, this increases sales, and chances of the user being a repeat customer, referrals and revenue for the company. On the other hand, bad UX is expensive – research by the Baymard Institute shows that millions of customers abandon goods at the checkout because of poor user experience. The UX School’s report on the ROI of UX design concludes that the ecommerce industry could have saved $1.42 trillion just by implementing better checkout flow and design, which would result in a 25 percent improvement in conversion rates. Billions of dollars can be saved by design fixes that can be carried out easily by a good UX design agency.

Reduced longterm operational costs

In his book on software development, Robert Pressman found that for every dollar spent to fix a problem during design, the cost during development would be $10 and $100 to fix the problem after release. When integrated into the process right from the beginning, UX reduces overall costs and money spent on referral rates, sales and marketing. Furthermore, it ensures that the organisation does not spend money on expensive system overhauls and fixes in the future.

But the biggest savings in costs for a company comes from the reduced efforts in customer service afforded by great UX. If your UX is good, the size of your customer service team will be reduced proportionally. One assumes that every product needs customer service but there are products that have huge customer bases with very small to no customer support teams like WhatsApp, Facebook and QuickBooks. Imagine their savings!

Increased productivity

Investing in UX is also a great way to save valuable employee time. Dr Susan Weinschenk, author and behavioural psychologist in the field of design and user experience, shares some astonishing results in the ROI of user experience. She says that the time spent by developers reworking a project with avoidable faults is 50 percent. For an organisation, investing in UX goes beyond the obvious. It can minimise time spent reworking features, reduce unnecessary work, and save employee time, leaving them free to engage in business generation and other important projects. These companies that invest in UX design can, therefore, innovate and release their products faster.

Builds a Loyal Customer Base

Satisfied customers are at the core of any business and there is nothing that users appreciate more than design that meets and anticipates their needs. Simple and intuitive UX works to create loyal users and they can go on to become the biggest source of referrals as well as the foundation of long-term revenue for an organisation. Especially interesting is a decade-long study that began in 2006 testing a company’s ability to make money for shareholders in relation to the user experience that its customers had. The UX Fund accurately predicted profitability and stock performance based on user experience. Another study by Bain & Company found that just a 10 percent increase in user retention increases a business’ value by an average of 30 percent. An Experience Dynamics report found that an ecommerce site where product pages were specifically optimised for customers using mobile saw a 30 percent growth in sales and a 50 percent decrease in bounce rate. The higher the customer retention and customer engagement, the faster they can be moved through their product cycles. This occurs only when UX design, and most importantly, the user, is at the very core of the business.

UX offers a great ROI that goes well beyond the most immediate benefit to the user. In an age where attention is a precious commodity, great UX can be that distinguishing factor that ensures that an organisation’s product or service isn’t lost to competition. The long-term benefits of investing in UX is indisputable, making it a clear financial win for organisations of all sizes and across industries.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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Authors
Sharan Grandigae
Sharan Grandigae is the Founder and CEO of Redd Experience Design, a specialised user experience (UX) design company established in 2015 and based out of Indiranagar, Bangalore. Sharan started his first company in 2000 when taking part in a business-plan competition organised by an incubator at Drexel University, Philadelphia where he was studying business. He is a self-trained software developer and ran a company with partners building custom software for small- and medium-sized businesses in Philadelphia and the Tri-state region. While developing software, Sharan’s focus in all these years, remained on developing beautiful and usable software.

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