The Value of User Experience Design

N.B. : In this piece, User Experience Design, User Experience and Experience Design will be used interchangeably due to their overlapping nature and references.

In a world saturated with digital products and fierce business competition, User Experience Design has become the most critical factor in determining an organization’s success in market share, customer satisfaction and customer retention.

Organizations who have established User Experience Design (UX Design) as a pivotal element of their business strategy have succeeded in transforming followers into ardent fans who ultimately promote their products and services. It is no wonder, Airbnb attributed User Experience for taking them from near-failure to being valued at a whopping $10 Billion¹. Amazon’s founder, Jeff Bezos, invested 100 times more into Customer Experience than traditional advertising in the first year of Amazon launching.²

There were countless smartphones before Apple’s iPhone burst onto the scene. There were taxis before Uber and social networks before Facebook. There were plenty of vacuum cleaners before Dyson… All of these companies share one thing. It is their relentless focus on the customer and delivering the best user experience possible.
Miklos Phillips, Head of User Experience Design at Toptal ³

Despite this current wave in today’s industry landscape, many organizations remain skeptical in regards to the value of investing in User Experience Design. Over 40 percent of the companies surveyed for Mckinsey’s Report; The Business Value of Design, still aren’t talking to their end-users during project development and 50 percent of the companies surveyed for this report didn’t conduct user research before generating their first design concepts or specifications.⁴

Still questioning that User Experience design can provide value to your organization? Consider that by 2020, it is predicted that e-commerce sales will grow to a global total of about $4.0658 trillion⁵. In spite of this whopping figure, a study by Baynard Institute found that conversion rates for e-commerce could be improved by 35% through better digital checkout design and flow.⁶

WHAT IS USER EXPERIENCE DESIGN?

Over the years, the term User Experience has undergone various definitions. Don Norman, who popularized the term in his book The Design of Everyday Things, defined “User Experience” as encompassing all aspects of the end user’s interaction with the company, its services, and its products.

There is a common misconception that User Experience is solely related to digital screen design; however, Norman’s definition allows room for Experience Design to be a prominent component of any organization’s business strategy.

I invented the term User Experience because I thought ‘human interface’ and ‘usability’ were too narrow. I wanted to cover all aspects of the person’s experience with the system including industrial design, graphics, the interface, the physical interaction, and the manual.
Don Norman

In addition to traditional business interactions, the emerging rise of new digital platforms such as Augmented Reality, Virtual Reality, and Voice Assistant Devices, will create even more opportunities for brands to enhance their overall experience with end-users.

At Odell Keller, we like to define User Experience as how a person feels about using a system or product. In our case, the system or product might be customer-facing websites, web applications, mobile applications or digital services. The goal of User Experience design should be to create systems and products that leave people feeling satisfied and engaged while removing anything that may be frustrating or confusing.

THE DANGERS AND OPPORTUNITIES

People are beginning to expect significantly more out of their products and services. They desire seamless experiences, from in-person to digital, without friction or fuss. Organizations who underestimate the importance of these experiences have seen significantly adverse effects. Online consumers are 88% less likely⁷ to return to a site after a bad experience and, even worse, 40% turn to the competition afterwards.⁸

Case study: Wrong decisions in design might have cost an eCommerce organization 300 million dollars (link).

User Experience design can also be used to disrupt existing business models significantly. A favourite example includes the global digital media streaming service, Netflix, who continuously leverages best practices in User Experience Design to exceed the expectations of their members. The organization’s constant experimentation and mission to provide the best possible User Experience has led to 100 million loyal members worldwide and counting⁹. Netflix’s former competitor, Shomi, which shut down in 2014, found it difficult to compete with an organization that spends upwards of 300 million dollars (U.S) a year on research and development purposes to improve the experience of its members.¹⁰

[we’re] making sure, again, that the product continues to be really, really effective at evolving to respond to the new needs of the consumers, the next 100 million, 200 million members that we’ll have. So we make sure we keep an eye to that shifting global set of use cases and requirements.¹¹
Greg Peters, Chief Product Officer At Netflix

While the danger is that organizations can leverage User Experience design to outpace the competition, the opportunity is that companies can work to improve their level of UX Design Maturity and incorporate best practices into project strategy and project delivery.

FIVE REASONS FOR ORGANIZATIONS TO VALUE USER EXPERIENCE DESIGN

To help with showcasing the value of investing in User Experience Design, we have put together this summary of the five most significant benefits for organizations that invest in this, now critical, industry.

Increase to Bottom Line Sales
Customer Satisfaction
Increase in Brand Perception and Customer Loyalty
Decreased Digital Development Costs
Employee Collaboration and Retention

1. INCREASE TO BOTTOM LINE SALES

The number one rule of Google’s internal “Ten Things” philosophy is “Focus on the user, and all else will follow”. Organizations that have genuine empathy towards satisfying user needs will ultimately see an organic increase in sales of their products and services.

The return of investment in User Experience Design is 100 dollars for every $1 invested.
Robert Pressman, Software Engineering: A Practitioner’s Approach, 2010

A 2016 design study of 408 different companies observed that companies who invested more in User Experience Design saw significantly higher sales. The highest investors in User Experience saw their sales increase by 75%, however, even those companies who did not invest as heavily, but were still design-centric, saw their sales increase by 60%.¹²

Sun Microsystems has shown how spending about $20,000 on user-centred design could yield a savings of $152 million¹³. Even ESPN.com revenues jumped 35 percent after they listened to their community and incorporated suggestions into their homepage redesign.¹⁴

“When we first started using UX design as a business practice, we grew revenues by 895% in the first three months. By making UX a focus in everything we do, we have fostered a highly-engaged user community and internal workforce.”
Raffaela Rein, founder, The UX School

2. CUSTOMER SATISFACTION

Customer satisfaction is essential to the overall success of a business and marries well with the goal of User Experience Design – designing experiences that satisfy customers. The biggest challenge for modern business is that, due to rising expectations, customers can be very fickle. They are 74% more likely to switch brands if they find their purchasing process to be too complicated and just one negative experience means that up to 51% of customers would never do business with that company again.¹⁵

A focus on User Experience Design can produce significant business value. After a user-centred redesign of Bank of America’s registration process, Bank of America increased online banking registration by 45%¹⁶. In a 1992 Gartner Group study, usability methods raised user satisfaction ratings for a system by 40%.¹⁷ In addition, a study from Forrester Research found that a well-designed user interface could raise a website’s conversion rate by up to 200%, and a better User Experience Design could yield conversion rates up to 400%.¹⁸

User Experience Design can also help with Customer Retention. It is anywhere from 5 to 25 times more expensive to acquire a new customer¹⁹ than it is to keep a current one. Co-founder of Nielsen Norman Group, a global User Experience Design and Research company, Jacob Nielsen found that when User Experience improves the customer experience, it raises a company’s KPIs (Key Performance Indicators) up to 83% in conversion.²⁰

Taking the time to understand an organization’s current user experience and satisfaction levels also provide intelligence that could aid future decisions.

3. INCREASE IN BRAND PERCEPTION AND LOYALTY

Industry experts consider Branding and User Experience to be two sides of the same coin.²¹ By 2020, the experience of the consumer will overtake price and product as the number one brand differentiator.²²

An organization creates brand perception when people interact with their digital assets. Research by Harvard Business Review found that satisfied customers are much more likely to recommend a product to their friends via word of mouth. In fact, 23% of customers who had a positive experience told at least 10 people about it.²³ When customers are satisfied, they become advocates of a business’s products or services since referrals and personal recommendations carry more weight than any other form of marketing.

“User experience or design is what really drives desirability.”
Michelle Morrison, Design Program Manager, Facebook (UX school)

4. DECREASED DIGITAL DEVELOPMENT COSTS

In an article published by IEEE²⁴, the world’s largest technical professional organization, it was estimated that up to 50% of development time is spent reworking a project with avoidable faults. In addition, they estimate the cost of fixing a User Experience error after development is 100 times that of correcting it before development.

When you consider that the amount spent on IT projects worldwide is over $1 trillion²⁵ a year, the cost of wasted development time is staggering.

“The value of UX is not wasting time and money developing the wrong solution.”
Jeff Humble, lead UX designer, CareerFoundry ²⁶

According to Experience Dynamics, an award-winning User Experience (UX) consulting firm, following best practices in User Experience design can recoup lost development time by clearly and more effectively defining user requirements.²⁷ Well-defined requirements enable quicker decision making and prioritization of user needs. The avoidance of re-work saves an organization the trouble of making changes after the project budget or delivery timeline is running out.

Another study conducted in 1998 by Forrester, an American market research company, concluded that usability techniques allowed a high-tech company to reduce 40% of their time²⁸ spent on tedious development tasks; at another company, usability techniques helped cut development time by 33–50%.²⁹

5. EMPLOYEE COLLABORATION AND RETENTION

IEEE identified that poor communication between customers and developers, as well as stakeholder politics, were some of the leading reasons why software projects fail³⁰. An example of this occurred in 2013 when Avon Products Inc. gave up on a four year, $125 million software overhaul after a test of the system in Canada revealed that the system was so burdensome and difficult to use that many salespeople quit the company.³¹

User Experience requires collaboration between diverse departments to meet user needs. It requires a team effort. A worldwide management consulting firm, McKinsey & Company, published a report³² which showed that top-quartile companies make user-centric design a shared responsibility, not a siloed organizational function. Their research suggests that overcoming isolationist tendencies when planning and producing projects is extremely valuable. Not only can collaboration between diverse teams resulting in higher productivity, but it also significantly increases the chances of successful project delivery. Collaboration around increased User Experience also enhances the Employee Experience by increasing staff feelings of customer empathy, excitement, shared bonds and trust.

Having an organizational standard around User Experience principles can even be considered an employee-retention strategy. Alex Khurgin, Director of Learning and Creative at Grovo said “Learning serves performance, development, and engagement. If you focus on alignment with the employee’s goals and the organization’s goals, you create opportunities for growth.”³³

Finally, Government agencies often have the best argument for improving usability due to their nature of being large, complex organizations with many employees. By enhancing the usability of their internal intranet systems, employees can experience significant time-savings and the agency itself can experience a significant financial benefit³⁴. The U.S. Defense Finance and Accounting Service saved an estimated 200 “staff years” by improving its intranet usability. Another example, the U.K. Department for Transportation, saved £130,000 through design changes.³⁵

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September 14, 2020 at 1:00 pm

[…] The biggest use of funds was on fixing bad decisions after the launch. Fixing these bad decisions during the development phase could make them 100 times cheaper to mend, as opposed to doing it after real-world customers have started using the product. (The value of UX design) […]