The ROI of UX: Acronyms That Make Billions

Kylie Jane Willis
Jul 4, 2020 · 8 min read

In a world of ever-evolving technology, business is always looking for the next innovation, idea, or invention to increase profits. Brian Pagan, a designer for over 17 years, said, “Digital technologies like artificial intelligence (AI), mixed reality (MR), brain-computer interfaces (BCI), blockchain, and voice interfaces are changing the landscape of human-computer interaction”. [1] User experience design (UX) is a revolutionary term that has come about in the technology and business world over the past 20 years. User experience is the mediator between user goals and business goals. Investing in and having a higher focus on UX will save businesses money and time.

User experience design is something that all executives may have heard about but might not know how to define. With UX designers all throughout my extended and immediate family, questions like, “So, you do the web thing, right?”, “What exactly does your (dad/cousin/aunt) do?”, and “Where are you going with your degrees?” Let me provide some clarity; User experience design is the art and work of creating usable products and amazing experiences for users or customers based on data and research. In an article published to the Interaction Design Education Foundation, they define UX in this way, “ User experience (UX) design is the process design teams use to create products that provide meaningful and relevant experiences to users. This involves the design of the entire process of acquiring and integrating the product, including aspects of branding, design, usability, and function.” (Interactiondesign.org) For something that is so crucial to the technology-driven world that we live in, not very many people can actually define UX or how it applies to them and their company.

UX-based terms are often used as buzzer words, seen in Apple’s annual powerpoints, CEO’s speeches to their employees, resumes, portfolios, social media posts, and daily meetings around the world. It’s terms like design thinking, user focus, usability, integration that are used so much as if just saying them in a meeting will automatically bring success. The truth is, in order for any of these things to benefit a company, everyone must understand the details of these principles and take action to apply them to the routines and workings of the business. This starts with the CEOs. Executives taking a UX focus will benefit business by billions, all it takes is a little bit of research, hiring of a good User Experience team, and the ROI will show the true importance of UX in business.

ROI, or return on investment, is an important term when talking about the increase in profits when hiring a UX designer or team. ROI is a term familiar to anyone in the business world, but UX may not be. Meghan Hartman, a senior UX designer and strategist behind Crafting Creative, wrote an article on ROI and UX. She says, “User experience can improve ROI in six different areas; revenue, customer retention, team productivity, support costs, development costs, and development time”. [3]

The Benifits of the UX Design Process: IBM- shows an impressive reduction of time and production cost after implementing UX.

User experience can bring additional revenue to any business. Mark Mongie, a User experience expert and creative director, wrote an article explaining exactly how much money a corporation can make just by hiring a UX team. He explains a study done saying, “IBM [Mongie’s company] hired more than 1,000 UX Designers between 2012 and 2017 to get closer to the “ideal” coder/designer ratio of 8:1. They invested over $100 million into this design effort across the organization.”. With this math, it means that for every $10 invested in user experience design, there’s a $100 return. This may seem small, but for a company like Master Control, who invests about 1.2 million USD in UX design a year, (Ben Willis), that’s over $10,000,00 increase in profits in less than one year. Jared Spool, the inventor of User Interface Engineering, has projected that a simple change to the user interface of Amazon has added roughly $2.7 billion in revenue. [2] Amazon’s CEO said it himself, “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better” ( Jeff Bezos). UX design makes for happy users and customers, which means more products and money coming to a business.

Implementing UX principles in a corporate setting will improve customer retention. When customers are happy with the experience they have with a product, they’re much more likely to stay using the same products. David Moth, an editor and designer at Econsulty, published a study that found that 88% of online consumers are less likely to return to a site after a bad experience. (Moth 4) Using UX in your business to create memorable and meaningful experiences will allow customers to adapt products into their everyday routines.

Design thinking can provide a significant positive change in a team setting. By leading with design thinking, it allows for more collaboration, research, productivity, stress management, and a better overall product. In an article published to Harvard Business Review by Jeanne Liedka, she says, “In most organizations, the application of design thinking involves seven activities. Each generates a clear output that the next activity converts to another output until the organization arrives at an implementable innovation. But at a deeper level, something else is happening — something that executives generally are not aware of. Though ostensibly geared to understanding and molding the experiences of customers, each design-thinking activity also reshapes the experiences of the innovators themselves in profound ways.”. This means that by having employees focus on the consumer in their work, they’ll be able to work harder to fix problems in unique ways.

Investing in user experience design can save both design and support costs. In a video by Dr. Susan Wienschenk, she says that “The amount of time that programmers spend on rework that is actually avoidable is 50 percent of their time.”. Programming and developing any kind of product is all about troubleshooting. A semicolon placed in the wrong line of code or a minuscule error can wreak havoc and take so much time (and therefore money), to fix. With all the work that it takes to code and develop something, it creates more stress on those employees to have to solve problems after seeing users unhappy with their product. Some may say that a company could hire more programmers to ease up the stress, but developers and product managers don’t quite have the soft skillset to create a product that’s easy to use and unproblematic from the beginning. By hiring a UX team that can focus and research on the user and problems they might encounter with a product, it can save developers and programmers a ridiculous amount of time and stress.

Some say that UX is an unnecessary cost. There’s the argument that product managers and web developers can collaborate and take out the UX designer as the middle man. Oftentimes, product managers will undermine the designer to CEO’s and other executives. Raymond Galang is a UX lead for AHA! Software. In his own personal blog post, he described an interaction he had with product managers during a design proposal as a young UX designer. He said, “In the middle of the meeting, the CEO interrupted our product manager and criticized our new design direction. “How does this make things better?” he asked bluntly. “I don’t see why this design is an improvement over our existing approach.” Before I could open my mouth, the product manager spoke on my behalf. “I agree with you,” he said. “Ray made a design error and we will make it work more like it did.””. Mr. Galang’s experience isn’t uncommon to UX designers everywhere.

It’s an argument that UX and terms like “user-focused”, “design thinking”, and “leading as a product manager” are overused and overrated. Some think that UX is all for the show. They often think that UX is companies like Apple, whose headquarters are so “design-focused”, even their traffic cones are that signature minimal white. Why focus on small details when a company could focus on big changes that make millions? Sure, that mindset will be profitable in the short term, but when products start crashing, programmers and product managers are stressed out, and users aren’t satisfied, those big changes won’t be making millions anymore. User Experience design is so much more than standup meetings, pretty logo ideas, and design thinking ideology. UX is based on research; investing on studies that will help a business gain empathy for their consumers, and sync up the goals of the business and the user. Henry Ford once said, “If there is any one secret of success, it lies in the ability to get the other person’s point of view and see things from that person’s angle as well as from your own.” UX design brings together the user and the business for a highly collaborative, productive, and profitable use of time. User Experience design could also be referred to as “User Research design”, because research-based design is what makes the most difference to any business, product, or company.

User Experience has a high return on investment. UX brings not only a financial return but a timely return. It allows employees to be happier and less stressed, and users to be more satisfied. UX unites the goals of the business and the user. The facts are clear and the future is bright. The way our world is moving, there will come a time where usability is more important to functionality. Walker, a customer experience consulting firm, did a study that determined by 2020, “customer experience will become more important than not only price but also the product itself “(Walker 20). As a business executive, the goal is to always try to adapt to new trends and invest in quality skills that will save money and time, increase user happiness, and provide less stress. The return on investment on UX? Fulfilled business goals and satisfied users.

Sources:

[1] Anna, and MJ Schavitz. “An Open Letter to Product Managers: From a UX Designer: Aha! Blog.” Aha!, 27 Apr. 2016, blog.aha.io/an-open-letter-to-product-managers-from-a-ux-designer/.

[2] “[Intro Guide] The ROI of UX.” UX Beginner, 5 May 2019, www.uxbeginner.com/roi-ux-intro-guide/.

[3] Liedtka, Jeanne. “Why Design Thinking Works.” Harvard Business Review, 28 Aug. 2018, hbr.org/2018/09/why-design-thinking-works.

[4] Meghan Hartman “What Is User Experience (UX) Design?” The Interaction Design Foundation, www.interaction-design.org/literature/topics/ux-d

[5] Mongie, Mark. “The True ROI of UX: Part 1.” UX Design Blog and Community Resource, 15 May 2019, www.uxdesigndoc.com/2019/05/15/the-true-roi-of-ux-part-1/.

[6] Moth, David. “Site Speed: Case Studies, Tips and Tools for Improving Your Conversion Rate.” Econsultancy, 22 Oct. 2012,

[7] Pagán, Brian. “The Future of UX Is Our Humanity.” Toptal Design Blog, Toptal, 8 Oct. 2019, www.toptal.com/designers/ui/the-future-of-ux.

[8] “ROI of UX with Dr. Susan Wienschenk” (Video) Youtube. 27 January 2011https://www.youtube.com/watch?v=O94kYyzqvTc#t=11

[9] Spool, Jared M., and Jared M. Spool. “The Magic Behind Amazon’s 2.7 Billion Dollar Question.” UX Articles by UIE, 8 Mar. 2016, articles.uie.com/magicbehindamazon/.

[10] “The Future of B-to-B Customer Experience.” Walker, www.walkerinfo.com/.

[11] Willis, Ben. Personal interview, 20 March, 2020

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