This is a question that doesn’t seem to go away: “How do I convince my company that good design is worth investing in?” It’s frustrating to work in an industry where you have to spend so much time showing the value of what you do.
At first I placed all the blame on (big) companies who are too cheap to pay for good design because they don’t think it’s necessary. But then I started to wonder… maybe some of it is our own fault? Maybe we just haven’t yet proven, within our industry and the companies we work at, that good design will result in positive ROI?
If I remember one thing from Marketing 101, it’s this obvious (but often forgotten) truth: Businesses exist to make money. Companies work so hard to make us happy for one reason only: so that we will buy more of their stuff. This seems obvious, but it’s important to remember. Because when you talk to the management teams of your organization/clients, telling them how beautiful their site will be once you’re done with it is just not going to cut it.
To prove the value of user experience design, you have to prove that by investing in it, the business will make more money. It’s as simple as that. Well, the concept is simple. The execution is… complicated. In this post I’d like to propose some ways to help us prove the value of design, so that we can spend more of our time building great experiences and less time telling people why they should build great experiences.
Design = Money
Proving that good design will make your organization/client more money is not something you can apply a formula to and do overnight. It involves some hard work and clever thinking (time well spent) to figure out what works best for the context you’re designing in. In some cases, like designing a Checkout process, it is relatively easy to define success metrics, benchmark, and show that a redesign resulted in more money – because checkout is where the money is.
In other cases, for flows that are further removed from direct revenue generation, it can be much harder to find the money link. In those cases, a conversion model is often the right way to go:
In most online user flows you can make a strong case that an improved conversion rate (or reduced drop-off rate) will result in increased revenue. Once that link is made, what remains is to prove that an improved user experience results in improved conversion rates. But there are immediately two challenges with this approach:
- How do you buy the time you need to prove that UX works?
- How do you find the right conversion rate model to link UX to conversion rates (and ultimately revenue)
So let’s dive into that.
Buying time to do the right thing
Getting an organization or client to invest in UX can be quite tricky in the beginning. Without real data, it’s hard to show the value. But without the time to do the process right, it’s hard to get real data. And so the vicious circle continues.
One way to buy some time is to show case studies where an investment in UX design has resulted in significant revenue lifts. One of these case studies is Jared Spool’s The $300 Million Button, where a simple design change resulted in an enormous revenue lift. Spool writes:
When the team contacted us, they’d already pretty much decided what the problem was and how they were going to fix it, even though they had never watched any shoppers make purchases. And they were dead wrong. Not only was their fix not going to help, our research showed that it was going to increase abandonment. Two weeks of usability testing on the live site (and on competitors’ sites), followed by two weeks of iterative paper prototype testing produced a streamlined checkout process, which, once implemented, showed a dramatic increase in revenues. It’s amazing what you’ll learn when you actually watch your users.
Obviously not all UX changes are going to have this much of an impact. But sharing cases like this with senior management or clients should help in making the case for investing in a proper user-centered design process. I know this is easier said than done, but mountains can be moved with some solid data and stubborn persistance.
So, let’s assume you’ve shown that a good UX can increase revenue quite significantly. How do you go about proving it for one of your own projects?
The three A’s
One of the marketing principles that are quite useful for user experience design is looking at the source of revenue as coming from one or more of three sources:
- Acquisition. Getting new users to sign up for your site/service
- Activation. Getting those new users to make their first purchase
- Activity. Getting those first-time purchasers to come back for more
If you can tie a UX project to one or more of these sources of revenue by showing that you increased conversion rates in those areas, you’ll have what you need. You’d have shown that design=money. Here are some hypothetical examples:
- A registration flow redesign can be shown to improve conversion from sign-up landing page to signed-up users. This ties into Acquisition.
- Improvements to a search results page can be shown to improve conversions from search –> items placed in a shopping cart. This ties into Activation and Activity.
- Home page layout and content changes can be shown to improve click-through rates on merchandising offers specific to new users. This ties into Activation.
And this list can go on and on. It won’t always be easy, but every UX project should be measurable in terms of its impact on the business, and tying it to one of the three A’s is a good structured way of anchoring all design changes in business goals (and ultimately, revenue).
Define your success metrics, benchmark those metrics before any changes are made, and then measure the (hopefully improved) increase in metrics.
As designers, we need to assume some of the blame of working in an industry that often has to fight very hard for appropriate resources to do our jobs. We need to understand why businesses exist, and follow a strategic approach to proving the ROI of design:
- Show historical case studies to buy some time and resources to follow a proper UX design process on one or more of your projects.
- Start on a project where changes can be measured by an improvement in one of the three A’s of revenue generation: Acquisition, Activation, or Activity
- Benchmark well before the start of the project, follow through on the UX design commitment, and measure your results – see this post on Six Revisions for some tips on which measurement tools to use. (What to do if the results are negative is a topic for a whole different post).
There is no perfect way to prove the ROI on design – this is just one proposal. Another side that I didn’t explore in this post is the many ways that UX can result in cost/resource savings. That’s deliberate since I wanted to focus specifically on the positive side of the revenue equation (for a discussion of some of the savings benefits of UX, see this great video by Susan Weinschenk from HFI).
I’d love to hear your thoughts on this important issue. How else can we prove the value of design?