The Business Benefits of Investing in UX Design: Enhancing Customer Experience and ROI
In today's customer-centric world, User Experience(UX) plays a crucial role in determining the success or failure of a product. With a singular focus on the target audience and their experience, an expertly-designed UX ensures that users have a seamless, enjoyable, and immersive experience with a product. This, in turn, leads to a steady stream of satisfied and loyal customers. This is why industry giants like Google and Amazon have made UX a fundamental aspect of their business operations.
To stay competitive in today's market, successful companies continually test and iterate their products to align with the evolving needs of their users. Investing in UX has become an essential component for achieving success. Furthermore, UX plays a critical role in elevating the return on investment (ROI) for organizations. This article delves into the ways in which UX design can impact customer satisfaction and boost ROI.
UX and CX: Are they the same?
The customer experience (CX) covers a customer’s holistic interaction with a brand across multiple touchpoints such as customer service, advertising, brand reputation, sales process, pricing fairness, and product delivery. In short, it is concerned with all the user touch points including social channels. Analyzing CX helps companies to know where their brand is positioned.
On the other hand, user experience (UX) relates to how a user interacts with a specific product and it focuses mainly on the digital touchpoints of the user like website, applications, and devices. UX primarily focuses on areas such as usability, interaction design, visual design, information architecture, content strategy, and user research.
CX is a more holistic initiative for customer retention whereas UX design aims at providing a pleasurable and easy experience for the users while using the product. UX is a subset of CX and is essential to enhance ROI.
Both UX and CX have to be in tandem to boost customer loyalty and customer retention. Let’s see an example of purchasing a product from an online store to illustrate this.
- A user logs into the website to search for the product with the desired specification. If the navigation is seamless and product recommendations and customer reviews are personalized, the user can quickly arrive at a decision.
- Then, within a few clicks, he can complete the payment. This is a positive user experience. Such an experience will make the user come back as the customer experience was great.
- Imagine the package will be delivered to the user on time but the product was defective.
- The next step for the user will be to contact customer service to figure out whether the product can be exchanged or not.
- If the customer service team promptly responds to the user and resolves the issue, it is a positive customer experience.
Thus we see how both UX and CX are essential for customer loyalty which is a determining factor of the profitability of the business.
UX Strategies to Improve CX and ROI
Eliminating the risks of product failure is the main goal of UX to improve customer satisfaction. For this, certain principles of UX have to be focused on.
- Usefulness: The design needs to have a purpose, and only user research can help in finding what is useful for the users.
- Usability: Valuable insights and feedback have to be gathered from the users to measure the usability of the product and iterate the design accordingly.
- Speed: The product design must ensure that it can cater to the fast interactions of the users on the web page/mobile app.
- Trends: The UI/UX design has to be relevant and empower users to buy more.
- Simplicity: Users like to have simple, accurate, and user-friendly solutions for their pain points. So keep the design as simple as possible.
A good UX and CX are the pillars of a great ROI. Investing in UX enhances customer satisfaction which directly affects the company’s ROI. Following these core UX strategies will help to create a flawless user-centric design.
User Research to Create a Customer Persona
Before getting into UX design, UI UX designers need a firm understanding of the user types, their needs, and their pain points. For this, designers interview people who are using similar products, gather feedback from them to identify the pain points, conduct one-to-one meetings or launch online questionnaires to gain valuable insights into customer needs, motivations, and concerns. Keep in mind that the user needs may vary with demographics, interests, and purchase behavior. To summarize, knowing the exact target audience will help tailor user-centric designs that eliminate pain points and deliver the best customer experience.
Mapping Customer Journeys
The data from customer personas can be applied to design a flawless customer journey. The key touchpoints that customers have with the product are identified and difficulties faced by the customer while interacting with the product are mapped. Using these maps, UI UX designers ensure that every interaction of the customer with the product is seamless. Such customer journey maps eliminate the errors that can arise due to assumptions made by designers. In addition, these maps are a great tool to understand where the customer needs are not met and then iterate the design to serve them better.
Prototyping and Wireframing
The design team creates a layout to demonstrate how the key interface elements look and work in a digital product. The layout can be low-fidelity wireframes or high-fidelity wireframes, also known as rapid prototypes. The choice of wireframes depends on the purpose of the design of the product and the requirement of the team members. Such basic skeletons of the design help designers prioritize all the elements with customers at the center point. The high-fidelity prototypes are close to the ultimate version of the product and developing such prototypes helps to gather feedback from the customers at an early stage.
Testing the Usability
Usability testing is performed to evaluate the design or prototype with real users. It helps UI UX designers to make corrections and modifications at an early stage of the design process. As discussed earlier, prototyping is the best way to find out the bottlenecks of the UX design and fix them before it goes on a large scale. Amazon, the world’s largest online retailer conducts permanent A/B testing to redesign the product that caters to user needs.
Why should you calculate ROI for UX?
UX/UI improvements in design will deliver brands more positive product reviews, enhanced brand loyalty, considerable reduction in user errors, and better conversion rates. There are many success stories of companies that had an indirect increase in profits due to improvements made in their UX design.
- Humana, a health insurance company performed A/B testing on their homepage banner. The first design was good but the company felt that it had to be improved to increase click-through rates ( CTR). Simple changes were made in the design and copy. These small changes in the UX design of the homepage banner resulted in a 433% increase in clicks.
- Virgin America wanted to make its website more usable for modern travelers. So in 2014, they decided to make minor changes to their website to give a pleasurable digital experience for their customers. After successful A/B testing, they released a responsive website. As a result, they observed a 14% increase in conversion rates and 20% fewer support calls.
- Rev, online transcription and captions service, completely redesigned their website to give it a modern look. Initially, the website had a carousel as the main design element to highlight the value propositions of the company. In the new design, the carousel was replaced with a simple bold value proposition with call-to-action(CTA button). This resulted in an increase in conversion rate by 19% in 9 months.
- Vocier, a luxury suitcase brand found out that their website lacked usability. They made A/B testing pages. After implementing the changes, the conversion rate of the final version was 75% higher than the older website.
These real-life examples show that simple changes in the UX design can have a positive effect on the conversion rate and dramatically impact your company's bottom line. So it stands to reason that investing in UX can contribute to the growth trajectory of the company, and already has for many brands.
How can I Calculate the ROI for my Investments in UX/UI services?
It's quite challenging to get raw data on return on investment(ROI) in UX/UI services, as the result of the changes has an indirect impact on the profitability of the company. But these observations can help in determining the impact UX has on ROI.
- Cost-benefit analysis: In this method, the costs of the UX/UI services, including the development and test of the design, are calculated. Then the value is compared to the benefits, such as increased productivity, improved user experience, and reduced support costs. This analysis gives the net benefit of the investment.
- Return on assets (ROA): Here, the return on the UI/UX services is calculated as a percentage of the assets invested. To calculate this, divide the net benefit of the investment by the total cost of the services and multiply by 100.
- Net Present Value (NPV): The present value of the future cash flows of the UX/UI services are assessed by considering the time value of money.
- Key Performance Indicators (KPIs) measurements: Track the before and after key performance metrics such as the task completion rate, error rate, and task completion time.
- Cost of rework: Compute the cost and effort of UI/UX design services at the beginning of the project. Then compare the data to the cost of rework after software implementation to analyze the total cost savings.
A solid UX design enhances CX and boosts ROI
A pleasurable user experience greatly influences the customer experience. Research by Deloitte and Touche reveals that customer-centric companies were 60% more profitable than companies that were not focused on the customer. And a good UX is inevitable for a positive user experience. Therefore, investing in UX is a smart move due to the following reasons:
- Greater ease of use boosts overall revenue/conversion as the customers get emotionally attached to the brand. And this results in customer loyalty.
- A well-designed product enhances customer satisfaction along with business-to-business satisfaction.
- UX techniques preempt user issues in the development stage of the product. This lowers the company’s expenditure for support calls.
- A product backed with comprehensive user research is less likely to fail to eliminate the risk of a wrong thing.
Now that you know how to get started with improving CX and UX, increasing overall on-site conversions, you can also start the process of bringing higher quality traffic to your website in the first place…through effective advertising and targeting. With MarinOne's paid media management platform, you will be able to see what ads perform across all paid media channels you're running, and invest wisely accordingly. Get started with our expert consultation team today to learn more about improving your customers' brand experience.
Aparna K.S. is a guest contributor to the Marin blog.