6 Ways User-Centered Design Can Boost Your ROI

6 Ways User-Centered Design Can Boost Your ROI


Published on: 03 Jul 2015

By Vinod Subbaiah

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User-centered design is one of the buzzwords that have caught the attention of the companies, small and large, across industries. Is it just a fad? Does user-centered design actually deliver tangible results?

In this blog post, we explore some of the ways in which user-centered design that focuses on improving the user experience can contribute to a company’s bottom line and help improve the Return-on-Investment (ROI) in a software project.

What is user-centered design?

Before we delve into the benefits of user-centered design, it is important to understand what constitutes user-centered design.

The International Organization for Standardization (ISO 9241-210) definition of user or human-centered design is as follows:

“Human-centered design is characterized by: the active involvement of users and a clear understanding of user and task requirements; an appropriate allocation of function between users and technology; the iteration of design solutions; multi-disciplinary design.”

If we break this definition down, we can notice that the elements of user-centered design involve the following:

  • Effective involvement of users
  • Well-defined understanding of the users, tasks and the context in which the product is used.
  • Choosing an appropriate mix between application of technology and user-input.
  • A design process that is iterative.
  • Multi-disciplinary design that involves all the stakeholders

In the context of defining and discussing about user-centered design, it is important to allude to usability. ISO 9241-11 defines usability as:

“The extent to which a product can be used by specified users to achieve specified goals with effectiveness, efficiency and satisfaction in a specified context of use”

In short, usability addresses the questions of:

  • Can the product help the user achieve their goals?
  • Can the user complete the indented tasks quickly?
  • Do the users feel satisfied with their interaction? What is the extent of likeability?
  • Will the users be tempted to come back and use the product and share their experience with others?

With this background, let us explore the role that user-centered design plays in improving ROI.

1. Reduction in Rework and Development Costs

A significant amount of resources and cost in a software project are spent in redevelopment. Adopting a user-centered approach to design can reduce this increased propensity for revisions and rework by maximizing the probability for getting it right the first time.

Roger Pressman in his oft quoted book “Software Engineering: A Practitioner’s Approach” notes that

  • 80% of software lifecycle costs occur during maintenance phase
  • ROI for every $1 invested in user-centered design (UCD) is between $2 to $100

IEEE has identified the top 12 reasons why IT projects fail. Among these are:

  • Unrealistic or unarticulated project goals
  • Badly defined system requirements
  • Inaccurate estimates of needed resources
  • Poor communication among customers, developers, and users
  • Use of immature technology

All these factors can be avoided by adopting the steps involved in a user-centered design process.

2. Increased Revenue, Reduced Abandonment Rates

User-centered design that enhances user experience contributes to increased revenues by bridging the gap between the goals of the business and the expectations of customers.

One major e-commerce site is said to have lost $300 million in revenue because they did not allow shoppers to complete their purchase without registering or logging in. According to Bain and Company, a 5% increase in customer retention can increase profits by 25% to 95%.

According to a research by CEB, 57% of purchasing decision is made before a potential customer contacts a vendor. This means you have very little control over nearly two-thirds of the sales lifecycle. The one sure way to make sure that you can increase your chances is to invest in user-centered design and make the customer feel wanted by addressing their needs and pain-points. If a customer fails to notice a feature, or a promotion that the business has invested heavily in, the results will not be seen. On the contrary, making it easy for the user to search for information or a product and positioning elements in locations that users anticipate will increase the likelihood for customer contact or a product sale.

3. Superior Product Quality

Any design process that takes into account the needs of the users, involves users during the development, and values inputs from stakeholders is bound to result in better quality output as opposed to a design process that fails to do so. It is hard to substitute inputs from ‘real’ users with assumptions about their preferences. Testing always helps.

User testing helped improve the quality of HelloSign, an iOS app used to scan and send documents from their phone. The quality of the scanned documents and the options available to users was vastly improved after conducting user tests.

Customers will be willing to pay a premium when they are confident that they will get what they expect and more. They are willing to work with and stay loyal to companies that can satisfy their current needs and build products that anticipate and address their future concerns.

4. Increased Productivity, Reduction in Errors

User-centered design is often associated with increased productivity and reduced training costs. If a website, app or a product is intuitive and users can readily learn or understand what to do and where to look for a feature or piece of information, their external dependence is greatly reduced.

Good design makes the users feel and look self-sufficient. This, in turn reduces the amount of resources and time a company has to deploy in making the users understand what their product is about, how to use it or troubleshoot common concerns.

Stubhub, a site serves as a fan-to-fan ticket marketplace, increased their revenues by 2.6% and millions of dollars by testing their website with real users and acting on their feedback.

UCD also results in reduction in the incidents of error and the efforts that have to go in to resolving the concomitant issues that arise. Imagine the amount of a development time and money that can be saved by avoiding errors in the first place by catching them during the development phase. This can be achieved by constantly testing a product throughout the development cycle.

5. Improved Customer Satisfaction

There is a reason why customers stick to companies and come back to them to make purchases or proudly evangelize a brand by recommending it to their customers. It is because of the delight they experienced in their interaction while buying a product or ordering a service. A company is able to wow a customer by listening to the needs of their target audience, fine-tuning their solutions to address the requirements of their clients and by making sure that every step in the customer touch-point has been designed with utmost care.

According to a survey of more than 1,400 digital and e-commerce professionals by e-consultancy, 74% respondents felt user-experience was the key to improving customer satisfaction.

A positive user experience results in return customers and a helpful word-of-mouth. It is free advertisement for the company that reduces dependence on a push marketing strategy. On the contrary, new clients are attracted to the business by the positive vibes created through a user-centered design approach. Trust levels improve and the number of referrals greatly increase.

6. Positive Differentiator and USP

User-centered design can be used as a unique differentiator that separates a company from the rest of the competitors. Companies such as Apple have used user-experience to create a niche market for their products and a positive brand image for the organization. iPhone and iPad are examples of testimony to level of detail and attention paid to user-experience in products designed by Apple.

Companies that invest in user-centered design have been known to have an edge and outperform their competitors. Companies that focused on customer experience got 27% better returns over a five-year period between 2007-2011 compared to the S&P 500 Index as per research from Watermark Consulting.

Check this infographic to find out how focusing on user experience can greatly help your company connect with customers and help build a user base.

KPIs for ROI

Some of the key performance indicators that can be used to measure improvements from user-centered design approach include:

  • Increase in page views
  • Average order value
  • Average sales per visitor
  • Conversion Rate – Percentage of visitors who buy
  • Decrease in drop off
  • Decrease in support calls
  • Increase in referrals
  • Percentage of positive feedback
  • Reduction in redevelopment and maintenance costs

As you can see, there are many benefits associated with an investment in user-centered design. Let us know how you have benefited by focusing on improving user-experience. What was your ROI? Did you use other parameters to measure your return-on-investment? We look forward to hearing from you. We are here to help you institutionalize this approach to meet the goals of your business and grow your customer base. Talk to us about your challenges and we look forward to assisting you in better understanding the requirements of your customers and building custom software solutions that bridge the gap between your business goals and your customers’ needs.

Vinod Subbaiah Vinod Subbaiah