The ROI of UX Design
When designers begin to think, process, and write about design it leads to ideas, it leads to concepts and ideas that you wouldn't be able to create otherwise. Similarly, when designers observe how their design add value to the people's life, when they make an effort to learn about how the design has empowered people, made their lives easier, how is the design being used and most importantly when designers analyze the end result of their design solutions and follow up on it, this analysis certainly makes them, "design-wise".
All that wisdom but how do you explain that with numbers? How do we measure UX design? What value does UX design bring to a company?
These are common questions and at some point, every designer has had to advocate the value of design in terms of ROI (Return of Investment). To measure the impact of UX design, we have to choose the right metrics and develop an ecosystem to evaluate designs and track progress over time.
Everything about design has some value to it, a value that can be experienced in terms of solutions but a value that's also difficult to access, hence making design difficult to explain and all the more difficult to calculate.
ROI is a financial metric used to analyze the scope of investment and figuring out the scope of improvements. In UX design, these metrics could be described as measures that calculate the effect of an investment in design. ROI measures also help to achieve design goals from a business point of view. So, ROI is simply a ratio of money gained over the money invested.
Selecting the Right ROI
For most businesses, ROI is calculated according to the defined KPIs (Key Performance Indicator). It is almost impossible to calculate the ROI of a UX design at the beginning of the project, those calculations are mostly based on assumptions and how much design is valued at a firm while within the design teams and decision-makers, these factors are calculated over a while with various tried and tested methods.
Once the product is out there the selection of applicable ROI metrics is based on what business metrics are most important for achieving the aligned goals. If it’s a retail website, the conversion rate and average based calculations become inevitable. If it’s the calculation for a customer service page, the focus is on the average call time and reduced call durations. If an app is designed to facilitate medical needs, metrics are focused on calculating reduced error rates.
In a world where interactive and unforgettable experiences translate the value of a website, business owners are consistently investing more time and resources in UX Design. Similarly, it has also become important to measure, the design that helps modern brands stand by identification of the errors to ideate the right solutions.
To calculate the basic loss and gains, let's now understand the three basic ROI metrics of UX design.
1. SUM (Single Usability Metric)
One of the most effective ways of identifying the problems to find the right solution for UX design is SUM (Single Usability Metric). SUM is a standardized usability metric that measures the basic components of usability — effectiveness, efficiency, and satisfaction through task completion rates, error counts, task-times, and task-time satisfaction.
Less UX Errors = Lesser Conversion Drop Offs
The SUM calculator takes the raw usability metrics on a task-by-task basis and converts them into a SUM score. The SUM algorithm is automated to calculate the maximum acceptable task time which assists in analyzing UX errors to optimize conversion.
2. Conversion Rate
The conversion rate is the ratio of total visitors who take desired actions. As a general categorization, there are two different types of conversion — Macro and Micro. For example, if you need to track the number of people who completed a purchase through your website.
Conversion% = (No. of Purchases/Total Visitors) x 100
So, if 1000 users visited your website and 20 of them made a purchase, then the conversion rate percentage of the purchases will be calculated as 20/1000 x 100 that will be 2%. This is an example of macro conversion.
Micro conversions are actions that accelerate macro conversions. It includes blog subscriptions, social media followers, blog posts, case studies, and e-books reviews, and views however both are calculated with the same metric.
3. Drop Off Rate
Drop off rate is an important ROI metric to calculate the impact of UX design. If the visitors on the website are not completing a purchase and are leaving the cart abandoned OR if the regular visitors of your blogs are not turning into subscribers, this means that you are losing potential conversions. This problem of incomplete tasks by the visitors regularly indicates a problem in UX design. The formula used in calculating the drop off rate is:
Drop off rate % = (Number of users / Number of unique users in each segment) x 100
The drop off rate calculation is an important metric of design measurement to identify the steps that may be causing the drop. Once the drop off rate is calculated
It is important to measure your drop rate in order to identify the steps which are causing the visitors to ‘drop off’. Once the drop-off rate is calculated, an analysis can be conducted for making the necessary improvements required to optimize the user experience.
It has been established over time that the value of design is hard to measure and define. For non-designers to see an unclouded impact of design as a differentiator, measuring its impact becomes indispensable. These consistent measurement practices help to create an integrative resource of analytics to design more efficiently and effectively.
In design, however, these measures are not always similar to other fields of work. The calculations shouldn't revolve around mathematical formulas. Measuring UX design through algorithms is not the only basis of its assessment.
Design shouldn't always be looked at as an expense, the investment of a good design can also be valued through its capability to engage, influence, and function. Design can also be seen in good content, aesthetics, and in its capability to meet the user's needs. A design that unifies a brand's message, strengthens business with clarity, and provides solutions affects the overall profitability through memorable experiences, and as we all know good experiences are the whole basis of a good UX design.