How to Measure ROI with UX Design?

There are multiple ways a company or a team together can come up with metrics used to calculate ROI. The company must first choose the appropriate measurements based on its overarching goals and then match the KPIs with those goals. Based on what impacts a team wants to major, the ROI metrics are added to PRD for calculating the impact once the product or feature is launched.

Let’s look into different ways of measuring ROI, based on the metrics like:

• Conversion Rate: Criteria to measure this metric is to check based on the number(#) of users who are completing the funnel or the journey till the end.

For example: Facebook Ads are placed in order to make the user complete the shopping of the desired product. To know about the conversion rate, it would be checked on the basis of the number of users actually clicking on the product displayed till landing or getting redirected to the product website.

• Average or Net dollar per user: Criteria to measure this metric is to check on the percentage(%) increased in currency(Rupee/Dollar etc).

For example: While shopping on any website or app, let’s say a new product or feature is launched. To evaluate how much it is enhancing the net revenue the team can use this metric. Based on the successful orders placed or number of times the feature is used the net revenue increase is calculated.

• Increase in Impression or Page Viewability: Criteria to measure this metric is to check on the number(#) or percentage(%) increased in pages viewed. This metric is also used to evaluate advertisement performance, along with impressions to install the app or to buy a product. 
• Decrease in drop-off: Criteria to measure this metric is to check on the number(#) or percentage(%) decreased or reduced in the drop-off.

For example: Let’s assume a new feature is added which is supposed to reduce the user drop off. To evaluate the performance of that feature based on the number or percentage reduced would determine if the feature really worked or not.

• Decrease in helpdesk support: Criteria to measure this metric is to check on the number(#) or percentage(%) decreased or reduction in help desk support. It means that if an app itself is very clear, the user is comfortable while using the app and is sure of what to do. It would directly reduce the number of calls going to the helpdesk. For any application that has made everything very simple and sorted for users, there is a high chance that customer care staff is lesser there.

For example: Myntra has a very clear showcase of all the critical points like refund, replacement or exchange policies which doesn’t need a user to reach out to the helpdesk on a frequent basis. This way the company is saving extra cost on customer care agent’s hiring process, training and salaries.

• Training Reduction: Criteria to measure this metric is to check on the number(#) of days or hours reduced for providing training to the staff. This way the company can cut on the cost of courses, classes, and study material along with soft dollars like time and effort put in to train the new workforce. Clear the requirement and the job description to avoid putting extra effort into training the user. This additional cost could be given to the executives for their personal development.

For example: A good example for this could be customer care training cost and efforts. Companies which hire a bulk number of customer care executives should consider these metrics as a game changer. 

• Increase usage: Criteria to measure this metric is to check on the number(#) or percentage(%) increase in people or sessions. This data could be easily fetched by the DS team of the company. To increase the usage, design can put effort into making the application engaging.

For example: Let’s take an example of an E-commerce application, generally there are long user sessions because they are so good at providing multiple user options. They place it with hick’s law where they increase the number of options for a particular item such that the user would keep on looking for the right option. This way the company makes profit based on the time spent as well as there are chances that users might end up buying more things than actually needed.

• Decrease in time consumed to complete a task: Criteria to measure this metric is to check on the number(#) of minutes or hours reduced in overall task completion time. Making a user reach the end goal quickly and early would increase the chances of better conversion rates. Designers should work towards reducing the number of repeated or irrelevant steps coming in between the most critical and important tasks for which a user is coming to the website/app.

• Decrease development effort: Criteria to measure this metric is to check on the number(#) of minutes or hours reduced for continuous maintenance of the application. This may or may not be design-related work, but this reduces development efforts, labor rate, and server costs which cost a huge amount of money. A company generally bears a lot of extra costs to set up maintenance servers and hire extra workforce to maintain the website/app, all this would be avoided if the right measures are taken at the beginning itself.

• Error Deduction: Criteria to measure this metric is to check on the number(#) or percentage(%) or money results. This could be either from the development side or even from the design side. Reducing error would increase a lot of other metrics like conversion rate, reduced drop-off, and net revenue. Error could be a major problem whether it’s on the sign-up page or payment checkout page. Reducing and recovering soon from such errors saves a lot on extra spending.

Working as a UX designer, down the lane you’ll get to sit and note down the measure on what impacts your designs have made. Designers’ efforts and outcomes would always be quantified, just like any other business process. It also allows us to keep track of the Companies that can use design ROI for that. This statistic includes revenue and aids in cost reduction and risk mitigation.

ROI measure helps the company and the team to evaluate the total spend, which includes cash spent on hiring staff, developing new products, or purchasing tools and equipment for the business. So, now let’s delve deep into what is ROI in UX Design: