At a time when most businesses are facing pressures beyond their control it can be easy to lose sight of what we can control. I hear it on repeat: “I need to minimize risk, increase revenue, and protect customer loyalty.” My answer is always the same: double down on what you can control. Make your User Experience a competitive advantage and create business value through great design.
Research shows that great UX design has incredible potential to move the needle. According to Forrester, companies focused on great user-focused experience design benefit from greater customer loyalty, increased revenue, a higher market valuation, and better-performing stock. In fact, according to their report, on average every $1 invested into UX results in a return of $100, that’s an ROI of 10,000%.
When your business is under pressure, maximizing your return on every investment is critical. Here are three important ways you can create value by investing in UX:
1) Protecting customer retention.
Winning new customers is always more expensive than keeping loyal ones, but loyalty is earned or lost with every experience. Recent research from Zendesk shows that after just one bad experience, up to 61% of customers will take their business elsewhere. On the flip side, they’ll stick around if they perceive value. According to Pew Research, 86% of buyers are willing to pay more for a great customer experience.
Retention is one of the top KPIs (key performance indicators) of any subscription business. SaaS (software as a service) is the most popular model used by digital companies to charge for their solutions. There are many advantages to SaaS, for both the business and the customer. But there are also challenges: You must keep customers happy and drive high usage and adoption ratios, or else they can cancel the subscription at any time.
As consumers tighten spending on non-essentials, delivering user experiences that consistently put your customer’s needs first improves their perception of value. Every positive experience presents an opportunity to protect your place in their budget.
2) Improve your sales conversion rates.
As consumers ourselves we instinctively know a bad user experience won’t compel us to make a purchase. But just knowing part of your user experience is bad doesn’t solve the problem. Your design teams need to pinpoint exactly where the friction occurs in the conversion experience. When they can use real time data to simplify a checkout step or create an incentive to buy, that is when you’ll see the needle move on conversions.
As an example, let’s look at a SaaS (software as a service). SaaS-model companies often only get one chance at delivering a fantastic first experience for their users. Let’s say that a brand offers a freemium model or a free trial, and the hope is to convert free users into paying customers. I guarantee you’ll increase the conversion rate substantially if users have a great experience, measured by the ability to complete the tasks they need to do in an effective and efficient way.
3. Maximize engineering productivity and reduce product development failure
Sure, I get it: your time-to-market matters. How fast your organization can build and launch products can be the difference in surviving or thriving in a tough market. However, when design and development decisions are made with the sole purpose of being agile, it can be to the detriment of the end user. User research gets pushed aside and you realize you need to make corrections after you’ve already launched. Or worse, the product fails completely, and your team has no idea why.
A recurring theme in the some of the most famous product failures is indeed the failure to think about the end user early enough. Do you remember Sony Betamax, Google Wave, and Microsoft Vista? All great companies. All products with potential. All failed to the wisdom of end user feedback.
When your product teams collect real time user data and embed that UX research earlier in their agile development cycles, they de-risk the whole process and make data-based decisions. As a result, they make smarter, faster moves on the front end instead of cleaning up expensive mistakes and risking a failed launch. Thanks to testing automation, conducting research is now relatively easy, fast, and scalable.
As doing more with less becomes more of a mandate than a mantra, maintaining and improving exceptional UX should be at the top of your strategy. It’s one of the most powerful business levers you can control.
Originally posted on Forbes.