Webinar: The ROI of UX ResearchFeaturing Susan Weinshenk of The Team W

Rapidly Test Usability & Measure UXUserZoom is the All-in-One UX Research Platform for the Data-Driven Enterprise

• Chat box is available if you have any questions• Look out for a quick poll question• There will be time for Q&A at the end• We will be recording the webinar for future

viewing• All attendees will receive a copy of the

slides/recording• Continue the discussion using #UZWebinar

Quick Housekeeping

The ROI of User Experience

ROI = Net profit / Investment (Net profit is Gross profit – expenses)

Example: I create a new productIt brings in $100,000 of revenue in the first

year.It cost me $80,000 to create and market itROI = Net profit / InvestmentROI = ($100,000-$80,000)/$80,000ROI = $20,000/$80,000ROI = .25 or 25% for year one

But how does this translate into ROI of UX?

Sample ROI Calculation -- Conversion

100 visitors a day put an item in the shopping cart of your e-commerce site

But 30% don’t complete because of a user experience problem with the cart

You are losing 30 sales a day due to a UX issue @ $10 a purchase = $300 a day lost 300 x 365 = $109,500 a year lostIt will take $50,000 fix the UX issue

Conversion gained = $100,000Cost to do re-design = $50,000

ROI = (100k-50k)/50kROI = 50k/50kROI = 1 = 100%

Poll #1: Do you currently do ROI calculations on your UX work?

Most of the timeWe’ve done a fewOnce or twiceWe’ve never done this

Real Life – Conversion at large online retailer

Approximately 10,000 abandonments of shopping cart each day.

Average purchase -- $36 – potential loss of 360k each day.

User testing to figure out the problem and then rework to fix -- $75k

Abandonment reduced by approximately 25%2500 people a day purchasing average of $36 = 90k a day saved

90k * 365 = $32,850,000 a year saved

ROI = (32,850,000 – 75,000)/ 75,000ROI = 32,775,000/75,000ROI = 437 or 43700%

You are on a team designing a software app.You think the plan for the navigation bar/information architecture is poor. You want to do a card sort to design it right before it goes into development.

Cost to do card sort = $5,000Cost to do re-work = $50,000 (this is the cost to fix it later if you don’t do the card sort – this is the amount you are saving)

Sample ROI Calculation

ROI = (50k-5k)/5kROI = 45k/5kROI = 9 or 900%

Sample ROI Calculation

Cost to do card sort = $15,000Cost to do re-work = $70,000 (we will save this money)

ROI = (70k-15k)/15kROI = 55k/15kROI = 3.66 or 366%

Real Life – Medical Imaging/Insurance Application

My First ROI Calculation (circa 1994)

Software for bank tellers5000 users Interface was hard to learn and hard to use -- poor user experience

Assumptions: waste 5 seconds per transaction100 transactions per person per day5000 people x 100 transactions x 5 seconds = 2.5 M seconds = 41,666 minutes = 694 hours x $7/hour = $4,858 a day x 252 days = $1,224,216

That’s Not All!Take training from 2 weeks to 2 days, saves $1000 in training costs per new person

10% turnover = 500 people a year x $1000 = $500,000 per year in training

PLUS help desk -- reduce calls by half, save 300 calls per month x $10 per call = $3,000 a month = $36,000 per year

$1,224,216 + $500,000 + $36,000 = $1,760,216 in first year

Cost to fix: $500,000

ROI = (1,760216-500,000)/500,000ROI = 1,260,216/500,000ROI = 2.52 or 252%

To Calculate Your ROI1. Decide on your key indicators.2. Estimate lost opportunity, cost of having

a poor user experience, or money to be made with a fix.

3. Estimate the cost to research and fix the problem.

4. Do your ROI calculation: Net Profit/Investment

When You Design The User Experience Well

–Increases conversion–Saves user time–Saves developer time–Increases customer satisfaction–Increases use of the technology–Reduces training costs–Reduces calls to the help desk–Increases self-service

Poll #2: Which key indicator is the most important to you right now on your project(s)?

ConversionSaving users timeSaving developer time/avoiding costly reworkOtherI don’t know

Questions for chat:

I need to convince (person or role) that (what you need to convince them about). Would doing an ROI calculation help?

Or

I’m interested in trying an ROI calculation, but here’s something I don’t quite understand that is holding me back: __________________________________

Productivity:(Time Saved) X( Employee Cost) X (# of employees) = Cost Savings

(1 hour a week) X ($30/hour) X (1000 employees) = $30,000 per week = $1,500,000 a year

Key Indicator Examples

Cost of Rework:(# of changes) X (Avg. hours per change) X (cost of developer) X = Cost Savings

(20 changes) X (8 person hours each) X ($40/hour) = $64,000

Key Indicator Examples

Next Steps:

• Try one out – pick a simple project and one key indicator to start.

• Email or call me if you get stuck• Look for our online video course

coming soon• Ask for a workshop (remote or in-

person)

Questions

Susan Weinschenksusan@theteamw.com@thebrainladywww.theteamw.com

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