February 22, 2024
UX ROI: 8 ways to measure the UX return on investment
Although some aspects of UX are more difficult to quantify than others, a lot of measurable data can demonstrate the impact of UX investments.
Im Gespräch mit Oliver Stöcker
Many executives have talked about the long-term strategic value of UX and its positive impact on operating results, and it has been shown that companies with a strong focus on UX tend to outperform their competitors over time. But what methods are used to measure the actual ROI of UX investments?
This article shows how the results of monitoring and analyzing key metrics can help determine the positive ROI of UX and provide arguments for further investment.
Comparing with competitors
In UX research, we use benchmarking with competitors to measure the relative performance of a product compared to the market standard.
By analyzing your competitors' product strategy, product experience and product performance compared to your own, you can identify areas for improvement and measure the ROI of your UX investments.
Before and after
To determine whether your UX investment is worthwhile, test your product and compare the measurements and feedback you receive before and after implementing UX improvements.
Depending on what you want to compare, you can use different methods, e.g. usability tests, user surveys, A/B tests, etc. This allows you to quantify the impact of UX changes on metrics such as conversion rates, error or churn rates, task completion times or user satisfaction scores.
Customer Lifetime Value (CLV)
CLV measures the total value that a customer brings to a company over the course of their relationship with that company: this can include the revenue generated by the combination of repeat purchases, upsells, cross-sells, referrals and other revenue streams generated by the customer.
Since user-friendliness influences customer behavior, the first step is to measure whether increases in CLV and the associated revenue over time can be attributed to improvements in user-friendliness.
UX increases success. With CLV, NPS, conversion rates and cost savings as benchmarks, companies can measure the ROI of their UX investments and secure long-term growth.
Net Promoter Score (NPS)
NPS is a metric for measuring customer loyalty and satisfaction based on the likelihood that customers will recommend a company's product or service to others, usually through a survey “How likely are you to recommend [product/service] to a friend or colleague?”
By subtracting the percentage of critics (values from 0 to 6) from the percentage of supporters (values from 9 to 10), you obtain your NPS value, which can be between -100 and +100.
Monitor changes in NPS scores over time to measure the impact of UX improvements on customer loyalty and support. The higher the score, the higher the satisfaction with the overall user experience.
Conversion Rate Optimiziation (CRO)
When users are tracked for specific actions, such as registering, purchasing an item or filling out a form, the impact of UX improvements can be measured by the increase in conversion rates or the percentage of users who complete that action.
By tracking changes in conversion rates and revenue generated, the ROI of UX improvements can be quantified in terms of more sales, subscribers, app downloads, leads, etc.
Cost for customer support and service
Companies' investments in usability are usually justified by the notion that they will reduce customer support and service team costs in the long run. The more intuitive the product is, the less likely customers are to request a demo or submit another support ticket.
By tracking changes in call volume, ticket resolution time and support team efficiency, you can assess whether the UX investment in reducing user friction and improving self-service has paid off.
Employee productivity and efficiency
When you invest in a great user experience for your internal tools, the ROI is usually measured directly in terms of employee productivity, workflow efficiency and job satisfaction.
Metrics such as time to complete tasks, error rates, overall user experience and employee satisfaction are the best ways to quantify the ROI of UX investments.
Market share and ability to compete
Changes in market share, conversion rates, customer satisfaction, audience size and brand perception compared to your competitors can be measured to determine whether improving the usability of your product is delivering a positive ROI (return on investment) and therefore justifying the ongoing investment to consolidate your market position and competitiveness.
