What puts the four horsemen of technology, namely Google, Amazon, Facebook and Apple ahead of competition? Apart from irresistible value propositions, innovative marketing and robust business models, the key differentiator for all four is the relentless focus on how customers experience their services and products. The S&P 500 companies that have invested consistently in design processes, capabilities and leadership over the past decade have been found to outperform rest of the index by a staggering 211 percent.
Despite this, investment in User Experience (UX) design still remains hard to justify, as executives struggle to create a business case for it. This blind spot often leads organizations to not only leave money on the table but risk losing customers to the competition as well. Over the years, UX interventions have been found to impact revenues, support costs, development risks, customer satisfaction and loyalty.
Sales Revenue
Statistics show that approximately 26 percent of U.S. online shoppers have abandoned an order in the past due to long and complicated checkout processes. Further, 34 percent abandon their order because they were required to create an account to continue. Customers who find themselves struggling to navigate a website are unlikely to spend time figuring things out and will switch to another website that provides a better experience.
Support Costs
Digital customers increasingly prefer solving problems on their own rather than calling customer service. A Forrester report found that 53 percent of adults in the U.S. are likely to abandon their online purchases if they cannot find quick answers to their queries. Yet, businesses are spending an average of USD 5 for each call at the contact center. This costs the industry USD 1.3 Trillion annually for 265 billion customer service calls each year. An intuitive experience with the product or service is less likely to require a call to customer support, and hence helps reduce call volumes.
Software Development
Investing in UX research before software development is often regarded as an unnecessary cost. However, applications failing to meet user expectations or the original purpose they were designed for could mean expensive re-work or project abandonment.
Dr. Susan Weinschenk, a leading behavioral psychologist working in the field of design and user experience, observes that ~15 percent of IT projects are abandoned. She also states that developers spend 50 percent of their time fixing flaws that could have been be avoided with proper user research. In 2011, the U.K. government scrapped a nationwide National Health Service (NHS) patient records management project due to failure in meeting targets for usage, functionality and benefits. Inadequate user research and testing cost the U.K. government approximately Euro 12 Billion of taxpayers’ money.
Customer Satisfaction
Positive customer experience increases customers’ willingness to pay by 14.4 percent. Further, it increases the possibility of product recommendation by 16.6 percent and reduces the probability of switching brands by 15.8 percent. Conversely, poor user experiences create customer dissatisfaction and lead to a higher churn. Customers who have a good experience feel greater satisfaction with the products and tend to stay more loyal. This loyalty translates into repeat purchases, renewals and brand advocacy which dramatically improves the customer’s lifecycle value.
The return on investment for UX design is USD 100 for every dollar invested. In a world where the user is increasingly being empowered with choices, investing in UX is clearly a winning strategy.