Why Smart Businesses are Focusing on User Experience

July 26, 2018 Lily L


A few weeks ago I gave a User Experience talk to a group of people representing many different backgrounds. An audience like that offers unusual challenge in terms of what to discuss, and how deep to go. I didn’t want to bore the UX professionals, and I didn’t want to swamp some folks with technical details. I opened up a new presentation and got lost for a while just looking at a blank slide. I thought this is interesting, how can I explain this!!? This is where I thought I’d put that “what is User Experience” introduction. But still, something didn’t feel right.

And then I figured: I’m not sure we need to do that any longer. UX is moving beyond a trendy buzzword into something that’s a given for any business. A business that’s truly concerned about promoting loyalty and retention. A business that is also wants to  improve their brand, and increasing sales conversions. User Experience is mainstream.
That being said, I would not want to leave anyone behind. If User Experience is truly new to you, here is a basic reading:
• It includes all the interactions a client has with a product or service.
• It’s a subset of, but separate from, customer experience (CX), which includes all the interactions a customer has with a business.
• It’s not restricted to digital. A bike has a user experience. A playing field has a user experience. A washing machine… A light switch… If it has a connecting point, it has User Experience.
• User Experience tries to make the complex simple, and more fun. If something feels easy to use, you can be sure there’s a lot of attentive design behind it.
• If you count yourself among User Experience gurus, you try every day to surpass the usefulness, and capability of interacting with a product or service.
Even though we may not need to talk a lot about what User Experience is anymore, we sometimes still need to talk about why it is very important. It’s a puzzle for User Experience professionals like me, but there are companies who haven’t yet emphasized investing in improving their UX. There are three main reasons we focus on User Experience: First, it is good for your business. Second, it is good for customers. And third, it is something that is truly expected these days!!
Let’s start with the factual benefits of User Experience investment.
What Makes User Experience Good for Business?
Significant Return on Investment (ROI)
An argument that sometimes derails User Experience conversations is around how to measure ROI. It is true that there are aspects of User Experience that are difficult to quantify, but User Experience does have significant return on investment.
• A 2012 Fast Company report about the business case for User Experience design says “Numerous industry studies have stated that every dollar spent on User Experience brings in between $2 and $100 dollars in return.”
• In the book “Cost-Justifying Usability,” Claire-Marie Karat references a research where $20,700 spent on usability resulted in a $47,700 ROI on the first day the improvements were executed.
• That same book references another case study where $68,000 spent on usability on another system resulted in $6,800,000 ROI in the first year.
• The 2014 Forrester report on the Business Impact of Customer Experience disclosed that moving from a below-average customer experience to an above average one would return $1.6 billion in additional annual revenue for wireless carriers, $1.4 billion for airlines, $572 million for retailers (up 152% from 2013), and $494 million for insurers (up 61% from 2013).

Reduced Project Price and Development Churn
Another quantifiable result is around operational organization and cost savings. Investment in User Experience has been shown to directly reduce project costs and development inefficiencies. I think it is way less expensive to prevent a problem than to fix one.
• In his book, “Software Engineering: A Practitioner’s Approach,” Robert Pressman explains that, for every dollar it costs to fix a problem during design, it costs $10 during development, and $100 after release.
• The Software Data Systems special report on User Experience Business Impacts and Return Of Investment UX investments made in the concept/design phase reduce development cycles by 33-50%.
• That same report shows that 47-66% of total project code is user interface, taking up to 40% of development effort. It’s smart business to get the user interface right the first time.

Increased Client Adoption and Loyalty
Once a product is in front of your buyers, good User Experience helps increase client loyalty and adoption. Adoption is important, but retention is where the magic happens.
• Depending on which information you read, and what industry you are in, it costs anywhere from 5 to twenty five times more to attract a new buyer or client as to keep an old one.
• Research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) shows that increasing customer retention by five percent increases profits by 25% to 95%.
• Good UX can even boost customer value perceptions. In Oracle’s 2011 Customer Experience Impact Report, 85% of users state they would pay up to 25% more for a superior experience.
• On the other side, that same report shows that 89% of clients started doing business with a competitor following a bad customer experience.

Reduced Support and Investment Costs
Some business benefits of good User Experience fall into the realm of “hidden Return of Investment,” but are no less important. Normally, long-term investment in good UX greatly reduces your support and customer acquisition costs.
• Customers who are happy with your service or product will require less help customer support and, because good User Experience promotes loyalty, they will be happy to report bugs and errors to you (instead of abandoning you).
• Usability encourages adoption. A great product will offer a relatively frictionless learning curve, which will help bond new clients as ongoing customers and, eventually, promotes.
• Good User Experience doesn’t just impact customers. If employees find a design frustrating, e.g. a salesperson trying to sell a product that is not easy to demonstrate or explain, or a call center manager trying to respond to a bad design that produces support calls, or a production manager dealing with lost employee productivity due to a sloppy internal tool, the costs associated can often be directly traced back to suboptimal User Experience.
With the appropriate investment, focus, the right UX partner and supporting processes in place, you can effectively lower development and operational costs, help reduce risks, promote loyal and happy customers, and greatly increase productivity and satisfaction among your employees.