{"id":25127,"date":"2021-06-25T19:29:02","date_gmt":"2021-06-25T19:29:02","guid":{"rendered":"https:\/\/www.experfy.com\/blog\/?p=25127"},"modified":"2023-08-19T11:07:49","modified_gmt":"2023-08-19T11:07:49","slug":"value-of-ux-research-and-return-on-experience-roe","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/software-ux-ui\/value-of-ux-research-and-return-on-experience-roe\/","title":{"rendered":"Value Of UX Research And Return On Experience (ROE)"},"content":{"rendered":"\t\t
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In the last 30 years\u2026<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The traditional sources of competitive advantage<\/strong> have slowly eroded<\/strong> both from a cost perspective<\/strong> in favour of a commoditized market (manufacturing, distribution networks, IT), and from a differentiation advantage perspective<\/strong> in terms of marketing, which has started to yield lower and lower returns due to increased brand mistrust (fewer than 30% trust brand-sponsored content, ads, or communications from companies or brands)1<\/sup>.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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To cope with the diminishing return, companies have started to discover that the secret source to some of the most successful companies seems to be user experience.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Calculate Return on Experience<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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It\u2019s important to understand the benefits and the cost of the user experience in order to adequately calculate the Return on Experience.\u00a0<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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1. Projected revenue increases:<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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UX has proven over and over again to be capable of generating a higher revenue growth <\/strong>(59% of higher revenue growth for companies that lead with a customer-need-first approach)2<\/sup> by increasing customer retention and loyalty, consequently resulting in a higher<\/strong> cross-sell and upsell <\/strong>due to the consumers buying additional products and services from the brand, and recommending it to friends.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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On average, when companies deliver a good service experience by solving customer problems quickly, their customers are 2.4 times more likely to stay with them, reducing the de facto customer churn.3<\/sup> Better customer experience means loyalty, which results in referrals. Referred customers are at least 16% more valuable than non-referred customers because they have an increased spending level of 2.7 times more 4<\/sup>, and they churn less.5<\/sup> Customers who have exceptional experiences are the most valuable. The average revenue per loyal customer is 50% higher than the average among all other customers, and for airlines, hotels, and retailers, it\u2019s more than 100% higher.6<\/sup>\u00a0<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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2. Projected cost reduction<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Through referrals, UX has also been conducive to lowering the costs of acquisition <\/strong>by reducing traditional marketing and advertising costs.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Furthermore, higher quality experiences result in fewer customer issues<\/strong>, translating into fewer calls to customer care and a subsequent reduction in call centre costs<\/strong>. Fixing the issues that cause customers to be unhappy saves money later on for the company, and it improves the return on experience while reducing dissatisfaction and frictions. Virgin Money performed root-cause analysis of customer complaints related to the opening and closing of accounts. The brand then implemented a targeted process by creating a \u201cfairness policy\u201d and staffing changes, resulting in a drop in customer complaints related to account openings and closings.7<\/sup>\u00a0<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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A great experience is fundamental to both customers and employees, and it\u2019s important to estimate time savings and increased efficiency impact on cost when it comes to employee experience. The impact of the improvement of a single task over a large array of employees will result in reduced costs.\u00a0<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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3. Cost of Inaction<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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The third, more ambiguous category has to do with the tradeoffs of inaction. To be able to estimate this, multiple questions need to be answered such as: What is the impact of not investing in user experience given the consumer or employees expectations? What is the level of user experience provided by the industry competitors? How could you leverage loyal consumers to increase return on experience and expand the business? How does the new experience edge against risk?<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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4. Estimate the size of required expenditures<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Properly calculating the costs of research, design, technology implementation, training and upscaling at the right time will help forecast the investment required.\u00a0<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Ultimately, after the implementation, keep measuring the return on experience by tracking the right KPIs for the project<\/strong> (increased satisfaction, reduced customer churn, design scorecards, etc.), and adjust your initial assumption to meet the reality and the changing environment.\u00a0<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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A few best in class companies from a UX standpoint<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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At times, user experience can be quite a consistent investment, but at other times, it can be as easy as empowering your team to address customer matters fairly. Let\u2019s see a couple of examples.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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