April 27, 2005
ROI Is Not a Silver Bullet:
Five Actionable Steps for Valuing User Experience Design
For years now, the “ROI of User Experience” has been sought as a means to justify larger corporate investments in web design. Although ROI methodology can be a useful tool for prioritizing possible web development projects, by itself ROI is not the answer to building a stronger user experience design competency.
In the world of financial analysis, ROI is a tool that helps executives to understand and compare possible capital expenditures, such as an investment in new equipment or software. These are large projects that have a pre-determined useful lifetime against which projected returns can be easily compared. While some large-scale web projects can effectively be quantified in terms of ROI, more often user experience improvements are an ongoing and iterative process. Design competence is an intangible asset that requires more specific valuation techniques.
So how can design managers use valuation methodology to better increase their visibility and position themselves as a strategic corporate resource? Here are five steps that will help.
1. Get an Understanding of Business Value
Before attempting to measure the value of specific design projects, it’s helpful for design managers to get an understanding of how their internal clients measure business value. Whether a product manager or a marketing manager, your internal client will have certain high-level business objectives they are trying to meet. Call a meeting to have an explicit conversation about their long- and short-term goals, and together you can brainstorm how website improvements can help achieve these objectives. Talk in terms of real business metrics whenever possible and find out how they evaluate their lines of business.
2. Look for Quick Wins
If measuring the business value of user experience design is new to your organization, it will be important to look for some quick wins. Using metrics and analytics to understand the value of user experience requires practice, and it’s hard to do it right the first time. By choosing some quick wins, it will be easier to identify value metrics and measure baseline data (see next step). Valuing the success of a quick win will also provide some meaningful political capital and credibility — a success story is so much more effective in getting executive buy-in than even the most complex ROI calculation.
3. Determine the User Behaviors and Measure Baseline Data
User behavior lies at the intersection of business goals and user needs. For example, a product manager might have the goal of registering more customers to conduct business on the website. Therefore, a key user behavior would be registration success, and the corresponding success metric would be yield (the percentage of users who successfully complete the registration process). Measuring the baseline yield is critical to understanding the value of a redesign of the registration process, as it provides both a target and a means to value project success.
4. Measure Outcomes Post-launch
This is the most critical step for understanding the value of user experience, and yet it is also the most widely ignored. Too often, stakeholders have moved on to other projects by the time the actual design launches. However, if baseline data has been adequately identified and collected, measuring outcomes is actually quite easy and can be used to inform future projects. Plan a post-mortem meeting to ensure that someone on the project team takes the time to measure and communicate the impact of the project on user behavior and financial metrics.
5. Evangelize Success
Here is where measuring success really pays off. Pre/post metrics analysis can be used to write a short case study, which can then be presented to project stakeholders. Take this opportunity to call attention to the benefits of user experience design at higher levels of the organization. We have seen many web design teams use this approach to get better visibility, increased budget, and more autonomy.
Keep in mind that ROI is a complicated tool for evaluating big expenditures. In most circumstances, using it to measure the value of user experience design is like using an Oracle database to balance your checkbook. Particularly in valuing a quick win, these five steps offer a faster and simpler, almost guerilla approach to measuring business value of design projects.
As their analytical ability improves, web teams may decide to use more sophisticated valuation methodologies, but don’t let analysis paralysis keep you from measuring and evangelizing your success. We have seen time and again that user experience is a real competitive advantage for our clients; simple measurements can help set the stage for getting executives to better understand how to use it.
(0)