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4 Steps to Calculating the Return on Your UX Investment

June 30, 2022

Create and launch X new landing page. Send Y press release. Draft Z email campaign. The list never ends.

And while these tangible, deadline-oriented tasks can dominate your time and attention, it’s easy for larger, longer-term priorities to get pushed to the bottom, even critical priorities like designing for the user experience.

At Astriata, we understand the pressure you’re under to meet deadlines and show a return on your investment, at the same time we understand how much UX design can help you achieve these goals—and ultimately take your marketing and sales efforts to unprecedented levels. But let’s not get ahead of ourselves. To convince stakeholders that investing in the user experience is worth your while, you first need to show ROI. How do you do that? Here, we walk you through four steps to help you calculate the ROI of your UX investment. By following these steps, you’ll uncover exactly how your UX investment affects your bottom line.

The Value of UX

Before we get into the specifics of calculating your UX ROI, let’s talk about the significant impact UX investing can make on your company’s bottom line. Studies have found that every $1 invested in UX returns $100 to the business.

Consider these examples:

The bottom line is that every organization can benefit from making a UX investment. But, it’s not always crystal clear how to measure this impact. Here’s our recommended approach.

4 Steps to Calculating UX ROI

Step 1: Benchmark Your Current User Experience

You will want to start by benchmarking your current UX performance data. After all, you can’t see how far you’ve come if you don’t first know where you’re starting. Once you collect this data, you can use it to track the performance impact of your new UX to show improvement over time.

First, determine what UX metric(s) you want to collect. This can include:

This can also include related metrics such as element interaction (video clicks, expanded accordions, etc.), engagement (time on site, bounce rate, etc.), user-based traffic volume (referral traffic, social traffic, etc.)

Keep in mind, however, that these metrics do not necessarily indicate a positive experience. For instance, time spent on your site could be due to a confused user struggling to find the information they need. Or, on a more positive note, this could indicate an engaged user who is taking the time to read your content. Additional investigation, such as task-based usability testing, is needed in this case.

Once you identify metrics to collect, you will need to choose a key performance indicator (KPI). For example, if you’re an association, you might choose revenue generation tied to such variables as new members, conference attendance, training enrollment, and donations. You might also look at time and money spent on revising the website to address usability issues, along with time and money spent on support calls and emails (essentially helping members find what they struggle to find on your website).

Step 2: Conduct User Research and Implement UX Improvements

Before implementing what you think should be done to improve your website, we highly recommend user research to fully understand the issues from the users’ point of view. Whether working with an internal team or external partner, conducting user research is a critical step that allows you to combine what you learn with your benchmark metrics to create an effective website strategy. Your design and development team can then implement the recommended changes for UX improvements.

For example, you may have learned from your task-based usability testing that your users have difficulty finding a form because of its location and its obscure link title. Furthermore, users have trouble completing the form because the set-up doesn’t allow for them to back out of or fix their mistake, which leads to no choice but abandoning the form—and in all likelihood, your organization losing out on a sale.

With this knowledge from user research and usability testing, you design and implement a more user-friendly interface, with clear instructions on how to complete the form and fix any mistakes. These improvements, then, increase the number of forms submitted on your site—and boost your sales opportunities.

Step 3: Track and Analyze

After you’ve made the desired UX improvements, you will want to track the impact of these changes over time.

Give yourself several weeks of runway before deeming your UX work a success or failure. Often, organizations see an initial spike after an initial UX change is made, as people process the new experience. For this reason, allotting yourself a bit of breathing room will enable you to better establish the normal state of your user experience.

As you track your data, compare it to your benchmark data. What changes do you see?

Step 4: Calculate Your ROI

The big moment is here: the time to calculate your UX ROI. To start, you will need to tie your UX metrics to your KPI. How can you do this?

To further explain, consider this other example: Imagine, for instance, that as a hospital, your staff uses a web-based application for communicating with physicians about submitting medical billing codes for insurance claims. You identify that one of your UX metrics is the number of correctly coded medical bills, but you also know that arriving at the right code requires communication with physicians, on top of a steady response rate. What do you do? You implement a user-friendly application to expedite the process and reduce the time spent.

Again, your UX metrics translate to your KPI—the dollar amount in reimbursements received from the insurance company. So, you compare the time spent and cost before and after the improvements to the user experience.

Infographic that shows potential ROI amounts for a UX Project

As you can see, the savings resulting from the UX changes are significant—not to mention the additional savings that would have come from freeing up time to spend on other revenue-generating activities.

While this example reveals how we typically summarize and calculate ROI, keep in mind that this isn’t the only way. Another way to summarize it is with the following formula::

Total Value of All Metric Improvements – Cost of UX Project = UX Project ROI

Once you have that number, take a minute to compare your UX project ROI to the established benchmark of $1 to $100 value generation for every $1 spent.

Are you above or below the industry average?

If you find that you aren’t quite hitting the UX ROI you want, our team of UX experts at Astriata can help. We have deep experience helping brands and organizations improve their user experience, while increasing their return on investment. We also know the daily pressures you’re under—and can work with you in ways that work for you. If you have questions or just want to chat, please reach out to us. We’re here and happy to help.

Curious how you stack up on the path to UX maturity? Check out our new UX maturity assessment tool. By answering a few key questions about your UX capabilities and journey, you can receive trusted advice on how you compare and what steps you can take. Check out our new UX assessment.

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