Three myths about UX ROI
ROI in relation to UX is responsible for every detail
Myth #1. ROI in relation to UX is always expressed in terms of money
When calculating your ROI, the key goal is usually to convert your UX contribution into cash – usually, but not always. People often feel like they’ve been caught off guard when they’re trying to figure out how to express something in terms of money. But the calculation of ROI in relation to UX should rather show that design that improves user experience has positive impact on business goals – whatever they are. Business goals are often related to making a profit, but not always.
For example, imagine some large state-owned company that finances the study of the ocean and atmosphere. This company publishes its research and resources for scientists and the general public. The management of the company may be more concerned with the number of audiences that read them or how highly the audience appreciates the published materials, rather than making a profit.
Instead of worrying about how to tie UX to money, think about who will be watching your calculations. What will your audience specifically value? It can be money, or the impact of a service or product, its perception by the audience, or audience retention.
Myth #2: ROI for UX needs to be completely accurate.
We want the ROI calculation to beas accurate and realistic as possible. But in the end, these are just estimates, so they can’t (and shouldn’t) be perfect.
For example, let’s say that a redesign of an internal company application reduces the amount of time an employee spends on important tasks. We can multiply the amount of free time after completing a particular task by the average wage per hour, the number of employees, and the frequency with which the task is performed.
Let’s say such a mathematical operation shows the amount of $ 400,000 per year. In other words, by improving employee performance, we believe we are saving $400,000 that would otherwise be paid to employees for inefficient tasks.
Does this calculation mean that the company literally sees an additional $400,000 in its budget at the end of the year? Not at all, for two reasons.
First, this calculation implies that everything outside the design remains unchangedthat there are no other external variables that would affect the performance of the worker and his performance. We imagine a world where everything but design remains static, which of course cannot be true.
For example, if we were talking about a product for external use, it may happen that our competitor will lower the price. This situation would greatly affect our income, but it is beyond our control. Such factors are usually unpredictable, so we cannot be responsible for them in our calculations. So, ROI in relation to UX implies that the external world in which the product lives remains unchanged, and only the design changes.
Secondly, this calculation is accompanied by the assertion that due to the better efficiency of workers, they will work less, which means that customers should not pay them so much. Or maybe employees will use the free time they have to do even more important work, their productivity will improve. This may be true. It may not be. People often decide to read the news in the spare time they have. This is just one example showing how you can calculate the value of efficiency for a specific task. In our redesign, we could improve other important high-frequency worker tasks as well.
So now that employees have a more efficient intranet with better design, they don’t waste so much time. It is hoped that employees can use the time saved to perform other, more profitable tasks. The value of this probable benefit — that’s what we’re trying to evaluate. ROI calculation is usually does not mean a literal calculation of the exact amount of additional profitwhich will turn up by the end of the year.
3. ROI in relation to UX is responsible for every detail
The third myth that I often come across is that ROI must be absolutely accurate and such calculations take a very long time. Sometimes this is true, but it doesn’t always have to be.
The ROI calculation can be as detailed and comprehensive as we want. In the internal application example, we could also include the hourly cost of office heating and electricity in the calculations. But I advise you to do such calculations as necessary, if necessary, in order to convey your opinion to the audience.
Case: design system dispute
A UX lead working for a firm decided to create a design system. Design systems save time for designers and developers, but creating a system takes a lot of time at the initial stage. The company’s management wasn’t sure that the time savings would pay off the time spent upfront building the system in the long run.
So the UX lead decided to see how long it took the design and development team to create just one component, a video plugin for a recent order. The lead then multiplied the time spent by the number of times the team had created a new version of the same item for other customers over the past few years.
It turned out to be a very simple calculation. So, the lead was able to show the company’s management how much time was spent on creating one component. “Imagine how much time we spend on all the components,” the lead argued. This was enough to convince the leadership.
I like this case because it shows how little effort it took for a UX lead to prove their point. It took him less than an hour to calculate.
Imagine what extra effort he could also put into the calculation:
He could look at the exact amount of time it takes to create the component each time. Instead, he simply took one design and then multiplied by the number of times the component was re-created.
He could do a similar calculation for other UI elements, not just video plugins, but tables, navigation, forms, and so on.
He could try to figure out the average pay per hour for design and development teams to convert everything into a dollar amount.
None of this extra work was necessary for him to prove his case. He spent the minimum amount of effort to show management how much time was being wasted.
Think of ROI as a guess, not an accurate prediction
These three myths often come from a misunderstanding of how ROI is calculated in relation to UX. In most cases these calculations are not intended to be comprehensive financial projections.
At best, these calculations suggest how much value (measurable in monetary terms or otherwise) a company gets from its investments.
Tailor your calculations to suit the purpose of the argument and your audience.
