The economic impacts of user-centered design (UCD) in digital product businesses
A detailed analysis of the catalytic role of user-centered design methodologies in influencing financial outcomes in digital businesses.
The continuous advancement of technology has not only influenced the patterns of our everyday lives but has also brought about a significant transformation in consumer behaviour, constantly adapting to the process of evolution. In previous eras, the dominant ideology around consumerism was centred around the material domain, characterized by the attainment of usefulness through the ownership of tangible commodities. Nevertheless, in the context of current dynamics, a significant transformation may be observed as digital items effortlessly integrate into the complex consumption fabric. Digital products refer to entities that are transferred and utilized through electronic methods. These entities include software, websites, and mobile applications that provide users with inherent value. Digital products are merging with traditional consumables, which signifies a significant shift in the prevailing paradigm.
The taxonomy proposed by Hui and Chau (2002) provides a comprehensive framework for classifying digital products, encompassing three primary categories: tools and utilities, content-based digital products, and the ever-expanding realm of online services. The taxonomic clarification establishes a foundation for thoroughly examining the complex domain in which digital products intersect with economic considerations.
The present cultural climate is characterized by a remarkable inclination towards utilizing digital items as the central driver of profit generation. This has sparked the curiosity and engagement of insightful company leaders and knowledgeable scholars. The current increase in interest aligns with the necessity to comprehend the complex web of effective economic methods inherent in the marketing framework that governs these digital entities.
Within the ongoing digital transformation process, the convergence of user experience design and a steadfast dedication to a user-centric philosophy is an indispensable requirement for developing financially sustainable digital goods. The necessity to promote smooth contact and collaboration among different user groups and businesses highlights the undeniable importance of integrating User-Centered Design (UCD) principles into the core of digital product organizations. In light of this context, this article aims to clarify, examine, and examine in detail the economic consequences that arise from the mutually beneficial incorporation of User-Centered Design into the operational structure of digital product firms.
Within the ongoing digital transformation process, the convergence of user experience design and a steadfast dedication to a user-centric philosophy emerge as essential in developing financially sustainable digital goods. The necessity to promote smooth contact and collaboration among diverse user groups and businesses highlights the undeniable importance of integrating User-Centered Design (UCD) principles into the core of digital product organizations. In light of this context, this article aims to clarify, examine, and scrutinize the economic consequences that arise from the mutually beneficial incorporation of User-Centered Design into the operational structure of digital product firms.
User-centred design (UCD)
In recent years, there has been a growing focus on implementing a user-centric approach in the design of digital products, as seen by the efforts of researchers from several backgrounds. Several studies have proposed guidelines and recommendations concerning the user-centred design process (For example, glimpse- Abras et al., 2004; Andrews et al., 2012; Wong et al., 2012; Göransson et al., 2003; Still & Crane, 2017). Simply put, User-centered design (UCD) is a design process that emerged from Human-Computer Interaction (HCI). Designers and developers have used it to create digital products that prioritize the needs and preferences of the end users. Human-computer interaction (HCI) is primarily grounded in usability, yet its key focus is examining how humans establish connections with computing technologies. Usability, sometimes known as human factors, pertains to examining the interaction between individuals and various products. Usability practices can be utilized in a wide range of contexts. Finally, we will look at the user experience (UX). Concept The term “UX” is frequently employed to encapsulate the comprehensive experience associated with a digital product. The scope of digital product evaluation extends beyond mere functionality, encompassing aspects such as user engagement and satisfaction (Lowdermilk, 2013). Figure 01 depicts a diagram which helps understand the relationship among these concepts.
However, the technical standards of the user-centered design approach were effectively established by the International Organization for Standardization (ISO). ISO 9241–210 (2019) assert that adopting a user-centric design approach in the design and development of systems is intended to enhance the usability of interactive systems. This approach emphasizes considering user behaviour and applying principles from human factors, ergonomics, and usability knowledge and techniques. Based on an extensive analysis of case studies and empirical economic data, it is evident that implementing user-centered design on digital interfaces is associated with higher user adoption rates, enhanced customer satisfaction, and, ultimately, significant revenue growth for digital businesses. Prior to delving into the subject matter, we must get a more comprehensive comprehension of the terminologies above.
User Adoption Rate
User adoption refers to the process by which a user initiates the utilization of a product for its intended purpose and attains a comprehensive understanding of its inherent worth. As dsh et al. (2012) discussed, obtaining new customers can be split into two essential stages. The two stages under consideration are acquisition and conversion. Acquisition refers to marketing strategies to entice a suspect, namely a potential client, to access a company’s website. After accessing the website, the visitor transforms from a suspect to a prospect. The conversion process then revolves around encouraging this prospect to engage in a desired action, ultimately leading to a successful conversion. The rate of user adoption significantly impacts the overall success of a digital product or service. When individuals consider a product to possess qualities such as intuitiveness, efficiency, and enjoyment in its usage, their tendency towards adopting and accepting the product is heightened.
User Satisfaction
The user-centred design significantly emphasizes comprehending human behaviour and preferences, leading to developing products that closely fit customers’ needs. This alignment results in increased levels of user or customer satisfaction. User satisfaction may be considered as a measure of the utility of a company’s website (digital product), serving as an indicator of the website’s usability and its influence on the end-user’s decision-making process (Muylle et al., 2004). The prioritization of user satisfaction holds significant importance since it impacts customer behavioural outcomes, including loyalty, trust, and purchase intention; the band also plays a crucial role in determining profitability (Chiou & Shen, 2006). From the point of view rooted in user-centred design, it is of utmost significance to enhance awareness in this domain, as it may facilitate the creation of more precise recommendations and guidelines that might result in heightened satisfaction for users and business profit.
Increase in Revenue
The significance of prioritizing comprehensive cultural investigation of people, including their cognitive processes, interests, and behaviours, and developing products that align with their preferences is equally noteworthy in the context of business revenue growth. Initiating the development of products by conducting an in-depth evaluation of the user needs and goals can effectively prevent businesses from embarking on unnecessary or potentially unsuccessful projects, hence mitigating the need for extensive future repairs and changes. Based on estimations, the expenditure incurred during the design thinking phase is significantly lower compared to the subsequent development and product launch stages. More precisely, for each dollar invested in addressing a problem during the design thinking stage, the expenditure increases to ten dollars during the development stage and approximately a hundred dollars following the product’s launch (Kfir, 2021). Another in-depth study on the design work of 300 public companies establishes a robust correlation between advanced design capabilities and enhanced business performance. According to their statement, the design-focused companies exhibited a revenue growth rate of 32% more than that observed in other companies (Sheppard et al., 2018).
Case Study: The Reddit Blackout
Reddit is one of the most prominent social media networks in recent years. In 2019, the platform boasted a user base of more than 430 million individuals who engage with the platform every month (Reddit, 2019). This online platform allows individuals to find out, share, and discuss various issues. The subject encompasses various topics, including current events, internet culture, personal interests, and dedicated communities. A well-known adage asserts, “There is a subreddit for every topic on earth.”
Nevertheless, a user-led protest has made this substantial portion of the internet inaccessible. The primary factor for this complaint is the substandard user experience and usability. A significant number of users express a preference for third-party Reddit apps due to their better user experience (UX) and enhanced functionality in comparison to the official version. Various indications can be utilized to gain insights into the level of popularity exhibited by these third-party apps.
One of the metrics used to assess the popularity and reception of a mobile application is the quantification of its downloads and ratings on prominent platforms such as the Apple App Store and Google Play Store. For example, Apollo has garnered over 4 million downloads and achieved 4.8 out of 5 stars on the App Store (App Store, 2023). Similarly, Relay has accumulated over 1 million downloads and achieved a rating of 4.7 out of 5 stars on the Google Play Store (Google Play, 2023). In addition, a well-known third-party application called Rif is Fun, which has garnered over 5 million downloads, has just been announced as discontinued, leading to disappointment among its user base. One user asserts, “I never thought that this one app that I downloaded in high school to read rage comics would stick with me for my entire adult life thus far. RIF is a masterclass in simple yet elegant design, and it is heartbreaking to see it go out like this” (Tech HindustanTimes, 2023).
Another key metric is the number of API requests these third-party apps make to Reddit’s server. Based on the statement of Christian Salig, the person who developed Apollo, a third-party app for Reddit, it has been reported that Apollo recorded 7 billion API requests during May 2023 (The Indian Express, 2023). Based on the assumption that each user generates an average of 344 requests daily, the monthly active user count for Apollo amounts to approximately 20 million. These two indicators illustrate that third-party Reddit apps possess a substantial portion of Reddit’s user base and web traffic.
Features of Third-Party Reddit Clients over the Official App:
1. The ability to personalize themes and layouts.
2. The utilization of advanced filtering and sorting options.
3. The augmentation of media viewing and playing capabilities
4. The practice of offline navigating and caching involves accessing and saving web content for later use, even when an internet connection is unavailable
5. The utilization of gestures to navigate and execute actions.
6. The utilization of rich notifications and widgets in technological interfaces.
7. The comment editor has been merged with markdown support.
8. The availability of ad-free and premium alternates allows users to enjoy their desired content without interruptions from advertisements.
These aspects offer users a pleasurable experience, unlike the official application.
Conclusion:
Based on the preceding discourse, it can be inferred that to effectively introduce a digital product to generate significant revenue for the business, it is imperative to prioritize the needs and preferences of the users. Furthermore, involving consumers at every stage of the product development process is crucial. However, Marti and Bannon (2009) have a different point of view. They say involving users in developing systems should depend on the situation and may be very different from the principles of the user-centred design method. The findings suggest certain circumstances where users’ engagement may present challenges or even be deemed unfavourable. An illustrative instance pertains to the profile of users, which encompasses individuals with varying degrees of cognitive capacity.
Author note:
As an economics student with particular expertise in Human-Computer Interaction (HCI), the author must acknowledge that integrating both fields presents significant potential for fostering economic expansion and advancement within our technologically driven society. Adopting user-centred design concepts is not solely a matter of design preference but rather a strategic economic determination.
References:
Abras, C., Maloney-Krichmar, D., & Preece, J. (2004). User-Centered Design.
Andrews, C., Burleson, D., Dunks, K., Elmore, K., Lambert, C. S., Oppegaard, B., Pohland, E. E., Saad, D., Scharer, J. S., Wery, R. L., Wesley, M., & Zobel, G. (2012). A New Method in User-Centered Design: Collaborative Prototype Design Process (CPDP). Journal of Technical Writing and Communication, 42(2), 123–142. https://doi.org/10.2190/TW.42.2.c
App Store. (2023, July 20). Apollo for Reddit. App Store. https://apps.apple.com/us/app/apollo-for-reddit/id979274575
Ash, T., Page, R., & Ginty, M. (2012). Landing Page Optimization. Sybex.
Chiou, J., & Shen, C. (2006). The effects of satisfaction, opportunism, and asset specificity on consumers’ loyalty intention toward internet portal sites. International Journal of Service Industry Management, 17(1), 7–22. https://doi.org/10.1108/09564230610651552
Google Play. (2023). Relay for reddit — Apps on Google Play. Google Play. https://play.google.com/store/apps/details?id=reddit.news&hl=en
Göransson, B., Gulliksen, J., & Boivie, I. (2003). The usability design process — integrating user‐centered systems design in the software development process. Software Process: Improvement and Practice, 8(2), 111–131. https://doi.org/10.1002/spip.174
Hui, K. L., & Chau, P. Y. K. (2002). Classifying digital products. Communications of the ACM, 45(6), 73–79. https://doi.org/10.1145/508448.508451
ISO 9241–210. (2019). Ergonomics of human-system interaction — Part 210: Human-centred design for interactive systems. ISO. https://www.iso.org/standard/77520.html
Kfir, A. (2021, November 11). The key to success: What is user-centered design really worth? Forbes Israel. https://forbes.co.il/e/user-centered-deisgn-contributors/
Lowdermilk, T. (2013). User-Centered Design: A Developer’s Guide to Building User-Friendly Applications (1st ed.). O’Reilly Media.
Marti, P., & Bannon, L. J. (2009). Exploring User-Centred Design in Practice: Some Caveats. Knowledge, Technology & Policy, 22(1), 7–15. https://doi.org/10.1007/s12130-009-9062-3
Muylle, S., Moenaert, R., & Despontin, M. (2004). The conceptualization and empirical validation of web site user satisfaction. Information & Management, 41(5), 543–560. https://doi.org/10.1016/S0378-7206(03)00089-2
Reddit. (2019, December 4). Reddit’s 2019 Year in Review. Reddit. https://www.redditinc.com/blog/reddits-2019-year-in-review/
Sheppard, B., Sarrazin, H., Kouyoumjian, G., & Dore, F. (2018). The business value of design. McKinsey & Company. https://www.mckinsey.com/capabilities/mckinsey-design/our-insights/the-business-value-of-design#/
Still, B., & Crane, K. (2017). FUNDAMENTALS OF USER-CENTERED DESIGN: A PRACTICAL APPROACH.
Tech HindustanTimes. (2023, June 13). Reddit protests: “Rif is fun”, other 3rd-party apps say they are shutting down; Users dismayed. Tech HindustanTimes. https://tech.hindustantimes.com/tech/news/reddit-protests-rif-is-fun-other-3rd-party-apps-say-they-are-shutting-down-users-dismayed-71686673457041.html
The Indian Express. (2023, June 1). Reddit’s API pricing may cost third party apps like Apollo $20 million every year. The Indian Express. https://indianexpress.com/article/technology/tech-news-technology/reddits-api-pricing-may-cost-third-party-apps-like-apollo-20-million-every-year-8640348/
Wong, M. L., Khong, C. W., & Thwaites, H. (2012). Applied UX and UCD Design Process in Interface Design. Procedia — Social and Behavioral Sciences, 51, 703–708. https://doi.org/10.1016/j.sbspro.2012.08.228
