interaction design, User Experience

The Business Case for User Experience Investment

Interaction Design

Interaction Design

User Experience (UX) is the discipline responsible for delivering an optimal experience to the user of a product or service.

For decades, as Alan Cooper wrote in his seminal work The Inmates are Running the Asylum, we’ve endured functional but unappealing software products (especially in the enterprise) because we’ve allowed software engineers to design the experience.

Mobile apps and the iPhone, constrained by screen size restrictions, have led the way towards elegant user experience.  

Enterprise software companies, now seeing the prevalence of Bring Your Own Device, now sees that their products must deliver a similar elegance to their users.  61% of Gen Y believe products they use at home are more productive than those they use at work.  

There is great opportunity for enterprise software that can provide the compelling experience users enjoy with products at home.

How does one frame the Business Case for User Experience (UX)?

At the end of the day, executives care about two things:

  1. Increasing revenue (new or existing business)
  2. Decreasing cost

That’s oversimplified, but at the end of the day you’re investing money to build or maintain a product that delivers revenue.  If you can show realized value from the investment that is larger than its cost, you’ve got the basis of a business case.

When considering business value, one must consider all the components of User Experience, not just visual design.  

UX is not UI. Good User Experience for software products ultimately derives from how the software works, how easy it is to find the desired capabilities, and how quickly one can accomplish a task.  

Here are three common business reasons for investment in UX that can provide the rationale for a business case.

E-Commerce User Experience

For those working on e-commerce platforms, UX directly enhances or even drives revenue.   In one extreme case, there’s the $300 million button!  Jared Spool illustrates that customers really resisted being forced to create an account prior to making a purchase.  

By making registration optional, the percentage of customers purchasing during a visit went up 45%. 45 percent translated to $300,000,000 added revenue over the course of one year.  

This value was delivered by observing users and making changes to better meet their needs and wants. Most e-commerce user experience improvements don’t deliver $300 million.

They can, however, improve the conversion rate of visitors on your site and help your bottom line.

Online merchants frequently repeat mistakes that cost them sales.  Which of these do you recognize? But maybe you’re not in e-commerce.  Maybe you’re responsible for growing revenue with a software product.

Ever Try to Cross the Chasm with Weak Product?

Revenue growth is universally important.  For startups and growth companies, in particular, customer acquisition is a key objective.

By one metric, companies who are pulling less than 30% of revenue from new products are in danger of becoming irrelevant.  Revenue growth is enabled by new product development.

If you’re managing a new product or portfolio of products, your success is evaluated by market adoption and growth, a.k.a. customer acquisition.  Customer acquisition begins to scale when you move past the early adopters and friendlies, and start to acquire customers from the early majority.

Technology Adoption Lifecycle

Buyers are afraid of vaporware.  Geoffrey Moore’s Crossing the Chasm suggests that the early majority are pragmatic, and will not adopt a new technology unless someone similar to them tries it first.

The need to hear good feedback from someone similar to them leads to a strong focus on reference customers.  Strategic companies deliver everything needed to satisfy a specific market segment, before adding features for the next, in order to win over reference customers in that first segment.

User experience is critical to crossing the chasm.

RELATED:  Growth Hacking is Just Advanced Product Management

To convince early adopters to provide a quality reference, it may be enough to get them to be paying customers of your MVP.  But the early majority wants more.

They’ll be asking early adopters about their experience, and in demanding terms.  Asking about data backup procedures, reporting capabilities, APIs, and everything else enterprise buyers are known for asking about.  Demanding terms.  RFP terms.

You’ll need to build more.

And what you build needs to work well, because of one simple question:

Will your early adopters provide a strong reference to the early majority, if their user experience is inferior?

No, they won’t.

There’s your case for increasing revenue.

Redesign is costly and WILL be necessary….plan for it!

Marty Cagan asserts that the product discovery team should include include user experience, product management and engineering from day one.  Multiple perspectives must be included because the creation of compelling products requires great design, and even further, that designers contribute to requirements.

The focus on user experience is required to address a core problem: Our first designs will not work.

Perhaps it’s better to say our designs will be functional, but sub-optimal.  IEEE concluded in 1993 that iterative design  improves usability greatly:

In four case studies, the median improvement in overall usability was 165% from the first to the last iteration, and the median improvement per iteration was 38%. Iterating through at least three versions of the interface is recommended, since some usability metrics may decrease in some versions if a redesign has focused on improving other parameters.

Waterfall product development often projects release far out into the future, and demands furious work to meet the date.  If poor user experience or lack of user satisfaction is discovered during development, that information is frequently discarded to avoid project delays.  But all too often, that kind of input isn’t solicited at all.

Some strategies involve release of the first version of a product, with limited features, and then iteration based on user feedback .   Only, plans to iterate and add features are interrupted when it’s discovered that users don’t understand the new design.

Ultimately, an unfortunate fact is discovered: Changing software once it’s in production is enormously expensive. There are caveats.  Changing the colors in the UI is usually pretty cheap.  Often, changing how a feature works isn’t. But what if additional features are already built over the part that needs revision?

What if the revision isn’t isolated, but rather requires extensive rework? Wouldn’t it be cheaper to iterate to a great design before building anything at all?  (start with paper prototypes!)

There’s your case for reducing cost.

Conclusion

Consider the impact of user experience on both revenue and cost.  Your product and business will thank you. What other scenarios and arguments have you used to create a business case for user experience?  Please share in the comments.

Image source: Flickr

1 Comment

  1. UXR

    I couldn’t agree more. User Research can save so much time and money in the long run. I’ve argued so many times for testing pre-development. I’ve done a lot of prototype testing in the past and as long as I’ve explained to the users that we want to test something we haven’t built yet but their feedback on the structure and functionality will really help us to build the product, they are almost always engaged and helpful.

    I think it can be helpful to have a series of options to present to the financial decision maker to ensure that at least some form of testing gets done. At one end of the spectrum, you have paper prototypes or a series of low fidelity digital images showing the basic structure (like wireframes). You can show these to people for free if you have to (friends, etc.) but it’s better to have non-partial users if you can. Another option can be trying out a 3rd party user research firm to run a prototype test for you. Userlytics.com, a company I’ve just started doing a little work for, does all kinds of testing and will do as much or as little of the process for you as you need them to. Then there’s having an internal employee do some prototype studies with a handful of carefully selected participants (you can set up a free online survey to screen applicants), and offer the participants a small reward. Or, you can invest in an internal user researcher or UX team to focus on this important aspect of the business on an ongoing basis.

    Presenting a variety of options like this might be more likely to gain acceptance from skeptical decision makers. And, once you show some results (time saved in product changes, for example), I’ll bet they’ll be on board for budgeting for UX on future projects, too.

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