Consider the example of the Swatch watch . By 1983, the Swiss watchmaking industry’s worldwide market share had dropped from 50% to 12%, largely due to competition from inexpensive quartz watches manufactured in Asia. Swatch saved the Swiss watchmaking industry from this crisis by developing watches that were a hit on all experience levels: they were viscerally attractive, behaviorally simple (when compared to the new digital watches), and had a cult-like sociocultural appeal. Designing for the user experience was the primary ingredient in the Swatch success, but it was not the only one. Good market research identified the right price point (under $40). Innovative engineering reduced the average number of parts from 150 to 51, which made it possible to sell a Swatch at the right price point. And creative branding and promotion tapped into a new, vibrant market. This reminds us that UXE is only one ingredient in a product’s success, and for maximum impact it needs to be coordinated with appropriately resourced engineering and business activities.
What proportion of organizational resources should be allocated to UXE? Surveys of Web and software development practitioners found that an average of 10% to 19% of the total project budget is typically allotted to usability engineering among companies that implement it [89; 135]; naturally, the appropriate amount for a particular project will vary with its business objectives.
The benefit side of the UXE equation includes increased sales, enhanced productivity, decreased costs, and reduced risk. ROI for UXE activities is impressive. One software engineering textbook estimates every $1 invested in UXE returns between $2 and $100 . Forrester Research ROI estimates for UXE efforts applied to corporate Web sites are similarly impressive . Retailers with e-commerce sites can expect between 780% and 1,795% ROI, manufacturers who use their site to generate sales leads can expect 67% to 516%, and financial service organizations will see from 499% to 1,610% ROI. This despite conservative assumptions based on the lower end of industry benchmarks; for example, increased revenue assumes only a 10%-20% increase in conversion of site visitors to customers or sales leads and decreased cost projection is based on a 1%-10% reduction in contact-center calls.
How does UXE deliver such high returns? The details vary somewhat by industry and product:
- E-commerce sites are the easiest to analyze because their servers record the impact of UXE on all transactions including traffic, sales, and support. However, similar results have been demonstrated for Web sites that promote offline and cross-channel sales (for example, increased sales in retail outlets that follow improved information retrieval on the Web).
- Computer software and hardware producers—as well as vendors of virtually any product or service—can expect increased sales as aesthetic appeal and useful and usable features attract more interest. Development costs and time to market decrease because user research prevents wasted development effort. Support cost will also decrease because customers need less help.
- Any organization that uses customized software, whether a database, intranet, or enterprise software suite will see productivity increase and training costs decrease as easier to use software is deployed.
UXE can contribute to ROI in four main ways:
- Increasing sales by improving product appeal, making e-commerce sites more usable, stimulating cross-channel activity, and improving customer retention.
- Enhancing productivity.
- Decreasing costs of development, maintenance, support, and training.
- Reducing risk of project cancellation and litigation.
Next we will review some examples of these four ROI opportunities taken from a broad range of industries. Even if an example is not from the particular industry you work in, the underlying principles are likely to be applicable.