UX Design ROI: How to Calculate the Value of Investments

UX Design ROI: How to Calculate the Value of Investments

A UX professional is concerned about the design experience of a product and services. A UX designer's work ensures the product or service is attractive, enjoyable and valuable to users. 

When starting a business, people only bother a little about designing stuff. They try to fund other expenses such as product making, but marketing is a thing that matters, and it is said that whatever is seen as attractive sells. So, marketing your product is equally important as creating it. You have to analyse your project using an ROI calculator. 

One way to show how valuable your design is is to calculate its ROI value, which stands for return on investment. You must show how design changes have impacted revenue, cost saving and other KPIs (key performance indicators). 

In total, there are four steps where you can show the ROI value of your design

1.  In collecting UX metrics into the KPI
2.  choose a KPI
3.  convert the ux metric into KPI 
4.  then report calculation responsibly

Collecting a UX metric for a benchmark study

This type of calculation can be performed for projects, features or products. Whatever your business is working with, you must choose a UX metric. A UX metric will tell you some information related to user experience.

Some popular vital metrics include 

• Surveys or Questionnaires 
• Analytics
• Quantitative usability testing
• Customer support
• Satisfaction rating
• Ease of use rating

There are many more things on which UX design ROI depends, such as frequency of return, conversion rate, etc. These metrics decide how well your business is working. Better these metrics are the good response of a user. You can further enhance your design using a good UX design, which improves your ROI performance, and you can measure it with the help of an ROI calculator. In the ROI calculator, you have to put some values like the invested amount and returned one along with the starting and ending date to get the ROI performance of your business or step. 

You can study a benchmark for collecting UX metrics to measure the impact of the step you have made before and the design change.

Choose a KPI

The next step in ROI analysis is selecting the KPIs to translate the UX metric into. You should ask yourself, what does my organisation care about? What are the parameters a team is paying attention to? Think about stakeholders, business executives and clients for which customers you are working. What metrics do they think and care about? The KPI of a company is specific to the organisation's culture, but most are related to money, even in non-profit organisations.

Some examples of KPIs include

• Profits
• Costs
• Customer Lifetime value
• Employee turnover rate
• Donor and donor growth

You usually consider more than one ux metric to grow your business. The ROI calculation is all about how design has impacted what the company cares about. Calculating the time saved using a more efficient design is one example. It would be best to estimate a business's ROI using an ROI calculator to understand business profit better. 

In particular firms with advanced UX maturity, the KPI and UX metric may be the same – perhaps everyone is already concerned with lowering time on task. In some circumstances, ROI estimations may be irrelevant because the job of showing the value of the design has already been completed!

Converting the UX metric to KPI

The conversion of UX metric to KPI is an essential thing we need to measure for the ROI calculation. For example, the UX metric is the average number of seconds a user takes to perform a task while linking to KPI monetary cost saving is a step of conversion. The two indicators are related to each other.  

The conversion ratio of a design is as important as knowing the conversion ratio of some physical quantity. If you want to know how many litres of water fit into two empty gallon containers. You need to see the amount of litre in one gallon, that is, 3.8 litres, and multiply it by two, and you get a 7.6 litre answer. In this way, you must find the conversion ratio for the ROI calculation of turning the UX metric into KPI. The conversion calculation can be as simple as multiplying two numbers, or it can be complex. 

UX Design ROI: Reporting Responsibly

When you do a deep design analysis, you must present it in report form. Make sure your audience understands what you have analysed. The ROI calculation is a strategic step in the conceptualisation of the relative value of a design project. This is not a financial projection. 

However, estimates are usually acceptable for UX savings because the significant reason for calculating them is to compare them to the R&D expenses for the improvements, which are also (rough) estimates in most circumstances. A ROI calculation can be easily found using an online tool ROI calculator, which is free of cost.