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The UX Impact: Understanding How User Experience Impacts ROI

In this article, we’re going to be exploring the inextricable relationship that UX has with the bottom line. To do this, we’ll be unpacking the component parts of UX and examining how each of them play a role in contributing to more streamlined and more profitable businesses. 

UX, or ‘User Experience’, has become the go-to term used to describe the end-to-end interaction that a consumer has with a product or service. 


Prior to the advent of modern computing, UX didn’t really exist as a discipline. While there have always been categorical methods of addressing different aspects of customer interaction—branding, product design, market research, and customer retention to name a few—today, UX unifies them all. 


After reading this, you’ll have a better understanding of why UX is so crucial to optimizing ROI, and you’ll be able to make more informed decisions about which UX partners you choose for your enterprise. 

UX, Defined


According to Nielsen Norman, a dedicated UX research organization, UX “encompasses all aspects of the end-user's interaction with the company, its services, and its products.”


This means nothing is off the table. When we talk about UX, we talk about quite literally every single factor that plays into the holistic customer experience (hence the ‘X’ in UX). 


This may seem overwhelming at first, which is why it’s helpful to break UX down into more bite-sized pieces. There are numerous ways to do this, and almost all of them include at least the following subdisciplines: 



Let’s delve into each of these on their own. 


Customer Personas

Customer personas—also termed ‘buyer personas’—are fabricated models of a company’s ideal customer. They’re demographically accurate, behaviorally precise depictions of the person who is most likely to purchase and/or use a specific product or service. 

Customer personas are incredibly powerful in helping to shape the rest of UX. Many would suggest they’re necessary. A recent HubSpot report revealed that making use of accurate customer personas helps to increase website effectiveness and ease-of-use by 100-400% (2-5x).  


Developing customer personas is a bit of an art form. It requires equal parts psychology, market research, user analytics, competitive analysis, and more. Once customer personas are developed, however, the road is paved for progress elsewhere within UX. 


Branding

Logos. Typefaces. Color. Voice. Tone.


A company’s brand is its face to the world. Branding provides a consistent, pervasive promise to the consumer—the promise to make them feel a certain way. For Coca-Cola, this feeling might be energetic or excited. For Pepsi, the feeling might be refreshed or rejuvenated. 


It is often said that “branding can inform UX, and UX can define branding”. In this way, it’s common for there to be an ongoing ‘dialog’ between branding and other component parts of UX, resulting in an ever-evolving approach to connecting with a customer base. 


Experience Maps

Experience maps can sometimes be called ‘customer journey maps’, because they detail the narrative the customer engages in from the moment they interact with your company all the way through the UX lifecycle. 


It’s a kind of story: First, the user does this. Then this happens. Then, their needs are met in this way. Then, a problem arises. It is dealt with in this way. Etc., etc. 


Mapping the user experience has enormous impacts on the bottom line, yielding as much as a 54% increase in marketing ROI and 3.5x greater revenue from customer referrals


Messaging and Content

Using words to educate, inform, or entertain your customers is what messaging and content is all about. 


Content strategy is, at its core, an investment in and of itself. It can be costly at the outset as resources are needed to create intelligent, high-quality content. However, once you’ve established your brand as a thought leader in your industry, you’ll gain credibility in your market. Over time, credibility breeds trust. And, when your customers trust you, they’ll leap to spend their hard-earned money with you.  


White papers, blogs, case studies, and newsletters all qualify as messaging and content platforms that serve your customers digestible, actionable information they can use to improve their lives. 


Research shows that content as a strategic part of UX has immense impacts on Key Performance Indicators (KPIs). 


For example, in 2017, the popular graphics website Shutterstock invested heavily in generating data-packed reports showing the effectiveness of using high-impact graphics on websites. 


These reports resulted in mentions in over 100 articles, over 6 billion unique site visits, and nearly 20,000 social media engagements


Website and Product Utility

Does your website, app, or software solve a problem quickly, efficiently, and easily? Can your customers get what they want when they want it, without having to navigate a labyrinthian maze or being forced to sort through useless clutter, red tape, or other such noise?


These are the questions to ask when addressing website and product utility. Improving utility marries the solution with the problem it solves faster. This results in more elated customers, increased market share, and sustainable profits over the long term. 



Usability

It’s not enough for an app, website, or software title to be useful. It also needs to be usable. What good is the most powerful, effective SaaS solution—just as an example—if the average user can’t intuitively use it?


ROI from usability studies are often difficult to quantify. However, it’s not uncommon for usability redesign efforts to result in 100%+ reductions in the time it takes for a user to complete a specific task


When apps and websites are more usable, the user is more delighted, which brings us to…



Delight

Delighting your customers is probably the single most effective thing you can do to ensure that they remain customers for life. When a user is delighted, their very existence is enhanced. They are able to quickly solve problems in their work or personal lives, freeing them up to pursue their highest and greatest good on this planet. 


It can be said that user delight is the ‘polish’ that encapsulates all of UX. Determining if a software feature or UX element meets a need and delights the customer can go a long way in developing a product or service that your customers will bond with and never stray from. 


Linking UX with Profitability


Amazon—arguably the most successful ecommerce business, ever—learned the importance of investing in UX well before they became a multi-billion-dollar behemoth. 


Jeff Bezos, founder and CEO of Amazon, suggests that a long-term focus on UX is actually more important than a short-term focus on profitability. The data corroborates this, as well. Compared with the growth of the S&P 500 index, companies that are considered ‘UX Design-Centric’ achieve more than double the growth, amassing as much as 228% growth in a 10-year period


So, how exactly does this happen? Generally speaking, there are two main ways: increasing topline revenue and reducing operational or development costs.



UX Impact on Increasing Topline Revenue

Acquiring customers among the ever-churning sea of your competitors is no easy feat. One of the most obvious impacts that UX can have on topline revenue is during the initial sales process. 


In the Digital Marketing space, increasing user adoption and driving app or software sales has everything to do with conversion. Conversion means a site visitor, tire-kicker, or interested prospect has taken an intended action, i.e. filled out a form, signed up for a newsletter, participated in a survey, or completed a sale.


During a user’s initial encounter with your website or app, they expect to feel guided by the layout, design elements, interactivity options, and other features they find. Making small, nuanced UX changes that serve the user can yield immense improvements in Conversion Rate Optimization, or CRO. 


Here’s an example: Asos, an online clothing retailer, was struggling to reduce shopping cart abandonment on their website. Through rigorous A/B testing on their checkout page, they found that changing the phrase “Create an Account” to “New to Asos?” resulted in a whopping 50% decrease of abandonment


That’s real ROI from investment in UX. 


It might be helpful to view UX almost as a business model of its own. If two competing companies offer an identical product or service, and one of those companies has a laser-sharp focus on UX whereas the other does not, the solution with better UX is going to win in the end. 


We see this all the time in App marketplaces, where ‘me-too’ apps are constantly ousting the apps they’re imitating, all because a better user experience is provided. 


In other words, the greatest application on the planet will inevitably be toppled by competitors who have a better understanding of how to deliver a more delightful user experience. 


UX Impact on Cost Savings

In business, the leaner your operation is, the higher your chances of survival are going to be. 


For cost reduction, UX can have long-lasting, powerful impacts. Making investments in UX can result in significant cost savings in at least three key areas: 


More efficient support

Users that get what they need quicker and with less effort are going to be much less of a burden on your support team. Fewer support calls yield more optimized use of internal resources, which drives operating costs down.

Enhanced bug identification and resolution

No app or software title is perfect (not yet, at least). There will almost always be bugs and functionality missteps to resolve. Finding these and putting them to bed is easier done with a feedback-driven approach to  UX.

Reduced customer defection

When users get frustrated with a feature or they can’t find what they need, they leave. We know this. We also know that one of the surest ways to stop them from leaving is to make their overall experience delightful in every way. Every customer that leaves your company is a hard cost. Investing in UX can substantially mitigate this cost. 


When you consider the many ‘cost centers’ of your business, it’s likely that a focus on UX can help to reduce the money that goes out the door every month. While it may not be obvious which element of UX needs the most attention, it does help to know where to start looking. 


UX and ROI Are Joined at the Hip


The power of UX to increase ROI cannot be overstated. 


If you’re a decision-maker or other stakeholder in the success of a website, app, or software company, you now know just how vital UX is for your organization. 


For technology-based companies in particular, It could be said that UX is the very lifeblood of all product or service offerings. Neglecting UX is tantamount to neglecting the customer. 


Conversely, investing in UX is the single, surefire way to fortify and future-proof your enterprise. 

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