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UX ROI: How to measure business value of UX research​

November 15, 2021 ・10 min read

Digital channels are an important pillar of any companies’ overall brand awareness and customer acquisition, but most of them tend to run away from UX research because they don’t find it “important enough” in order to allocate sufficient budget and/or time for it.

 

While they wonder why their digital products are not driving enough conversion, they often think it is the fault of wrong marketing or not enough marketing dollars spent. But the problem is, marketing can only bring people to the product, without the right design and content, prospects will not become customers. 

 

After years of working in UX Research, I witness a great number of cases where understanding user needs, finding out what caused the usability issues they encounter, is the best way to build products and services that actually meet those “real” needs. And my mental dialogue goes on as something like this: 

 

“Why stakeholders are not investing in UX Research?"

"Why don’t they understand the importance of it for the people who will use their products and services?"

"Why do they think they should take these UX risks in such a competitive world?”

To understand where the gap is, I went on to talk to a few business leaders and team leads. Putting my “UX Research” hat on, I want to understand what they think UX Research is, and what are the challenges they have in adopting it into their product development process. 

 

To conclude, leaders shy away from UX Research because:

1. They can’t measure the business value of UX Research

UX Research costs money, so the decision-makers need to justify the value of the cost. Compared to marketing, product development and customer support that are familiar cost items to a business and their value can be quantified by well-developed models, it is a new cost so the model is yet to be defined.

 

But in fact, the cost of UX Research can be modelled from two aspects: 

1.1 UX Research brings useful data that improve business KPI

Data-driven decision making is the trend for modern business as numbers are factual and actionable. UX Research gives you the data needed to make these decisions. How about I tell you that after we revamped Plantos onboarding journey based on the UX Research insights, we are able to improve the drop-off rate from 62% to 55% (7% improvement) and this means 7% increase in sales and 15% increase in net profit?

1.2 UX Research brings cost-benefits to development

Another way to look at it is by assessing the cost-benefit of UX Research. By digging to find out the real problem to solve, businesses can validate or disprove hypotheses early on in a product/service development. This allows us to make decisions that are backed by real-life data. The cost of this would be much less than developing something which no one wants to use after.

 

We can use the same case of Planto to do a business case: if it had used UX Research and to start with the right onboarding experience, it would have the 7% increase in the pocket from Day 1. And adding the engineering resource needed to build the previous onboarding feature (which is about 1 month time for this case), the opportunity cost is quite significant.

2. They are under the pressure to bring the product to market fast

There are quite a few who started the project with UX Research planned but decided to skip the step and jump into start development right away. When I asked them what made them change their mind, the word “time” appears quite often.

 

Recently, a client wanted to build a mobile application to strengthen its relationship with its influencer community by offering curated content that helps them to sell better on its platform, share tips and enjoy exclusive deals. Prior to the start of the development, we conducted user research with a group of future users. The results showed that only ½ of the features we planned are useful to the influencers but we have missed a few important ones they would really need to grow their business. 

 

Not only we help the client save a fair amount of budget, but we also provided her with useful insights on the experience, which will be used on her current mobile application redesign. The cost of UX Research? Less than one-third of the estimated costs of the mobile application. Planned investments have now been redirected to the set of features that actually brings business value and new designs that users actually need.

 

Interestingly, business leaders in companies with the best financial returns have fully embraced the benefit of UX Research. In “The Business Value of Design” studies conducted by McKinsey & Company, they found that best design performers increase their revenues and shareholder returns at nearly 200% the rate of their industry counterparts (4.6% average revenue v.s. 10% average revenue). 

3. Things you can do to bring UX Research into your product development process

UX Research shall be a natural step of the product design and development process. For this reason, we at UXlicious never do design without research. 

 

In some cases, we do provide UX Research only. In every project we work on, we constantly remind stakeholders of the users’ underlying needs and motivation to drive back every single design decision to that context. Treating the customer experience as an integrated entity instead of separated instances provides great opportunities for businesses to create more value. Truly design-driven companies should consider stepping out of their own ecosystems and partner with different services from different backgrounds.

 

There are a few things you can do to start harvesting the business value of UX Research:

1. Conduct a UX Audit

UX audit is a good starting point if you have an existing product or service. It allows companies to identify usability issues and their solutions. Its goal is to locate areas in the user’s journey that cause unnecessary friction. 

 

This is especially important for startups because they are generally creating innovations. To ensure that their differentiated products gather a broader consumer recognition, they need to be usable and intuitive. 

 

UX Audits are an inexpensive solution to a costly problem. A study published by Forrester indicates that businesses that invest in UX enjoy a broad spectrum of benefits. They have lower customer acquisition costs, greater retention rates, and higher market shares. 

2. Make Usability Test A Regular Practice

Nielson Norman defines usability testing as “In a usability-testing session, a researcher (called a “facilitator” or a “moderator”) asks a participant to perform tasks, usually using one or more specific user interfaces. While the participant completes each task, the researcher observes the participant’s behavior and listens for feedback.”

 

This is extremely suitable for understanding the issues users encounter when they are interacting with your products and services. The tasks in a usability test are realistic activities that the participant might perform in real life. 

 

We suggest you start your usability testing with the key tasks that are directly linked to your business KPI: onboarding, checkout, consume contents are a few that we often focus on for a new project. Based on your activation, engagement and monetization models, the key tasks vary for each product and service.

3. Start with UX Research in Your Next Iterations

To understand the target user’s pain point and their view on the competitor products, the business needs to start the product design process with UX Research. Using a mix of user research methods (e.g. interview, card sort, participative design etc), we can make sure that we are solving the right issue and creating the solution that has a great customer experience. 

 

The cost and time of UX Research vary based on the scope of the work, so it is important that we start with a plan that layout what are the steps that UX Research needs when are the results needed and the best way to make it actionable to the product and business team. Often the requirement for UX Research changes through the lifecycle of the product, from qualitative in the inception stage to quantitative after product launch. 

Conclusion

To make the transformation smooth, we advise starting small on a single project. Use that as a pilot and then gradually bring the whole product development process into the same structure. Our experience with working with clients that do not have a UX Research and development process in place suggest that the organization will benefit from the learning generated from the pilot project and it also makes stakeholders’ buy-in easier once the benefit of the pilot becomes apparent. 

 

If you want to understand how to choose the best pilot program, how to design the project scope and what are the tools and resources that need to be in place to make sure the transformation is a success. Message us to book a consultation with us. We will walk you through our design processes and suggest the next steps!  Our experts would be happy to assist with the UX strategy, product and user research, UX/UI design, etc.

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