In this week's UX Power Up, Frank covers the hugely important topic of ROI of UX. Note: Many of the stats mentioned can be found in this beautiful infographic poster: Making a Strong Business Case for the ROI of UX
Frank Spillers here, founder of Experience Dynamics and it's time for this week's UX Power Up! So today's topic is the return on investment (ROI) of User Centered Design or the ROI of UCD. So just a brief recap what's known about the ROI of User Experience and User Centered Design is that for every two dollars you spend you get two hundred back...or another study found that if you spend 10% you are likely to gain 83% back. The analysis of companies themselves that are doing customer experience, user experience work compared to those who are not is interesting as well and there have been a couple of studies on this...one of the latest ones that concluded in 2012 and it was a 6-7 year study of these companies and their performance was that companies who were doing user centered design had triple the returns and their cumulative totals of the top 10 were 43% increase over that time period (and this is during the recession) and the lower 10% of companies had a cumulative negative return of minus 34%.
So from a company performance perspective we can see ROI happening across the enterprise in terms of value. But what does this mean to you down at the interface level if you are a developer or a designer, a marketer or if you work with teams that are trying to improve the bottom line- well in a world where we know that roughly 5% of features are used 95% of the time so in other words, users focus on the things that are important to them and pretty much ignore all the other bells and whistles right...that you can save between 33-50% of development time and therefore cost by employing user centered design techniques. You can reduce overall dev or rework time by 50% and the reason is you're specifying requirements up front- you are validating those with actual user needs and so that's a notoriously time consuming and over-sight in most projects go over requirements are still being defined all the way up to launch; it's something that a lot of companies struggle with, so specifying up front, and getting all your stakeholders on the same page, getting all your requirements nailed down...getting a UI style guide in place that developers can just develop to helps speed that up.
So we've seen ROI gains pretty dramatically- now the industry standard for conversion rates is something like 2%, 4% is really good- we've seen conversion rates go up as high as 83% and up to 90%, we've seen revenue on one of the eCommerce sites we worked on the revenue increase by 200%! This is a site that was generating--one of our clients 10-12 websites not really generating a lot of revenue a couple tens of thousands of dollars--and then to over 1 million dollars within a 6 month period using user centered design techniques. There are many great examples, IBM had an eCommerce site they moved the Shop button up and just moved it up the page a little bit and had a 500% increase in revenue just by increasing the visibility of that button. We've seen other cases where we've just moved a button away from a branding element, almost like a logo, and seen 150 increase in ease of use on the same design.
So the ROI of UCD is definitely proven, there's a long history of case studies and analysis of ROI even though it's not straight forward to calculate ROI I think we can see from at least some of the studies I have just mentioned here today that there is a strong ROI it is important to measure and it is important to bake that into your usability projects so that you can show the actual tangible value as well as you're going through your efforts. Happy UXing! and looking for opportunities to evaluate ROI, should be baked into the beginning, think about it, keep it in mind, and we'll see you on a future UX Power Up! Thanks a lot