Understanding the value of UX

In tough economic times budgets are closely reviewed, and investments need to be scrutinised – so it’s natural to ask what value does UX bring?

ROI estimates help business cases for UX

Figures often speak volumes when making business decisions. Budget holders want to get the best value out of any money they spend and so return on investment (ROI) can quickly become a measuring stick to compare their options.

Often as UXers, we can be guilty of arguing our case based on the fact that it’s best for people and that surely has to be best for business. And yes, it usually is however there are ways we can demonstrate this and influence decisions more effectively.

Measuring ROI may seem daunting, after all determining what’s affected by design changes can be never ending.

Simple estimates are better than complicated predictions

It’s hard to accurately predict ROI figures since the figures used are a snapshot of that time – in reality, they’re unlikely to remain constant. However, well-considered estimates are often enough to illustrate the point.

Let’s imagine that a business is overwhelmed with support calls from customers. Most of these are from customers who can’t find answers on the website and say it’s easier to call.

The business plans a project to improve the website to help customers self-serve, in the hope that this will reduce the number of calls. This metric is the key performance indicator (KPI) in this example.

To understand how much the company could save, we need an average cost per call and a benchmark of call volume. If each call costs £5, and there’s an average of 100 low-value calls a day, then these cost the company £500 per day. Over a year, this adds up to £130,000.

Net return divided by cost of investment gives us a simple ROI ratio, the answer can be multiplied by 100 to give a percentage. For this example, we’d divide the expected savings by the cost of the UX project. For the sake of simplicity, let’s say this project costs £13,000. This means for every £1 spent on the project, the company can expect a saving of £10.

However, these numbers don’t tell the full story – reasons to not reach the maximum expected savings could include:

• People may choose to phone as they like to talk to someone
• People may not have the digital literacy or access to suitable devices to use the website

However, these figures also don’t show secondary benefits. Call centre staff may have improved job satisfaction as they get to answer more interesting questions, and spend more time with customers as the overall call volume decreases. These factors could lead to reduced churn of staff and associated costs.

While this example may be overly simplistic, it demonstrates how high-level estimates and context can be persuasive.

Begin with a benchmark

To get to a ROI figure, we need to measure the difference between the outcomes before and after a project.

We need to understand the business problem, and the desired outcomes. Then we can agree measurable KPIs that should be benchmarked before the project.

Non-financial metrics for UX measurement

The measurements need to align with the business problem and be easily understood by key stakeholders. We looked at a monetary value for the example but not every UX metric has a clearly defined financial impact. This may feel challenging as it’s convenient thinking if I spend £1, I’m likely to see £10 back from my investment.

ROI can be determined using non-financial factors. For example, we can use customer satisfaction scores as we know there’s a correlation between higher scores and healthier businesses. What’s most important is knowing which metrics are valuable to the decision makers.