ROI and UX Research: How can we measure it?

Published in

Aleph Publications

5 min readMay 12, 2021

This curated content is based on an Aleph Academy session by Ilker and Sophia, titled “Do We Really Need Research?”. The event was hosted by Avis and guested by Farisha and Joshua on 26 Mar 2021.

Special thanks to Benny Ong who helped to proofread and reconstructing the content. You can watch the replay of the session here.

When it comes to measuring the ROI (return on investment) of UX research, we often come across recurring questions from our clients and our internal team members.

1. How might we measure the returns of UX research efforts in product design and development?
2. How do we provide predictions of ROI before the product is released?

To help us better grasp the answers above, let’s take a step back to explore the importance of UX research.

Why do we need UX research, and how does ROI come into play?

UX research is vital to the product design and development process. It provides insights based on the users’ attitudes, behaviour, and experiences by using systematic methods to guide the product and design strategies. UX research reduces usability issues and removes negative user experiences when users interact with the product.

3 out of 5 users think that a positive experience is more influential than strong advertising. [1] Forrester Research also estimates that 50% of potential sales are missed because users are unable to find the information they require to make a purchase. [2]

That being said, there is some hesitation around UX research due to the time and costs involved in the process. A solution that we would propose is to present the estimated ROI, which can be measured both at its initial development stages and after a product’s launch.

The ROI in UX is recognised as the highest rates of return a company can realise in a business investment [3]. When UX is done right, your investment return rate can rise to as high as 301%. [2] Additionally, we can reduce the development time of a project from 33% to 50% [4].

Measuring the ROI of launched products

Firstly, we need to know the two key factors that contribute to ROI in UX research. Secondly, we need to understand the formula for measuring ROI.

The first factor is the Net Return on Investment, which is defined by the overall results behind the investment.

Here are a few things to consider when calculating net returns:

The decrease in project management and development costs to fix the problems discovered during usability testing (e.g. cost of epics to fix issues detected)
Customer service cost (hours, return payments, fees, etc.) to fix the issues
An increase in sales
Number of customers gained after fixing onboarding issues
Decrease in the number of customers churn rate after fixing issues with conversion in UX journeys
Increase in NPS (Net Promoter Score)
Avoiding the damaging brand image due to problems in UX

The second factor is the Net Cost of Investment, which is defined by the net amount of value paid for the research.

Here are a few things to consider when calculating net costs:

Salary of researchers/designers involved
Recruitment and incentives to respondent costs
Facility and equipment costs (e.g. data capture tools, space for testing and observation, remote testing tools, etc.)

The formula for measuring ROI is simple:

Estimating the ROI of future products

To better help us explain, we’ve created a sample table below that lists projects, the number of issues, and the individual ROI. This will help us to calculate the estimated ROI average of UX research.

****Key Issues****: Problems in the user journeys and critical paths, user interaction issues with certain UI elements, onboarding issues, system learnability, and problems with ease of use of design.*

We begin by measuring the average number of key issues per project. We take 36 (Total number of issues) and divide it by 3 (Number of Projects), giving us an average of 12 key issues.

Next, we define the ROI average by taking $450,000 (ROI total) and divide it by 3 (Number of projects). This gives us an ROI average of $150,000.

Finally, to get to our ROI estimated average, we take $150,000 (ROI average) and divide it by 12 (average number of key issues), giving us $12,500 (ROI per issue).

However, let’s say that you’ve undertaken a new project, Project D. Through extensive user research, you’ve determined that there are 10 key issues to be fixed. How do you estimate the ROI for this new project?

You can take $12,500 (ROI per issue) and multiply it by 10 (Issues in Project D), which will give you an ROI estimated average of $125,000.

Here’s how we break it all down:

Key Issues = Total number of major issues required to be fixed

Key Issues average = Key Issues ÷ Number of Projects

ROI average = ROI Total ÷ Number of Projects

ROI estimated average = ROI average ÷ Key Issues average

Some common ROI myths to note

Firstly, ROI isn’t meant to be financial forecasts for your projects. Do keep that in mind when calculating and presenting them.

Secondly, ROI isn’t only about increasing revenue. It is important to understand what your business goals are. For some, it might solely revolve around increasing revenue. For others, improving product impact, public perception, and user retention are equally important.

Thirdly, ROI does not have to be perfectly accurate. While we want ROI calculations to be as accurate and realistic as reasonably possible, ultimately, they are only estimates. As a consequence, they cannot be — and do not necessarily have to be — perfect.

Key takeaways

UX research is important. When done right, it can help you to save costs and time.
ROI can demonstrate business goals, which doesn’t have to be just financial. ROI can also include impact, perception, and retention.
Keep track of your past UX research findings and key UX issues for future calculations.
Remember that ROI calculations aren’t a prediction, but rather an estimate.