User experience best practices have been the hottest topic in product development for decades. Yet despite the industry recognition, the day-to-day reality for product people is still an endless battle for budget share. Knowing user experience (UX) is important isn’t enough when they’re up against tight development budgets, even tighter timelines, and a long list of stakeholders to satisfy. So what if users have to go through four screens to complete an action? Something has to get out the door by three weeks ago, and there’s no way four screens could matter that much—right?
The truth is that user experience doesn’t just make users happier—it’s a savvy business move that has a real impact on the bottom line. Making users’ lives easier in small ways will keep them coming back, attract new users, and increase value per customer. And there’s a growing body of research proving that the initial cost not only pays for itself, but generates even more revenue over time.
So what is the relationship between UX and profitability?
To explore the mechanics of how user experience generates ROI, we’ll use a famous usability anecdote from Jared M. Spool called the “$300 Million Button.”1 Yes, three hundred million dollars.
Spool worked on a major ecommerce site with a typical login form as part of the checkout process. When users had filled their shopping carts and were looking to pay, they were presented with a simple form asking for email address and password with buttons for login, register, and forgot password. The design team’s belief was that return customers could purchase faster, and first-time customers would sign up in order to check out faster later.
It turns out that the form was an enormous barrier for both first-time and return customers. First-time customers were hesitant to click “Register” because they were afraid of marketing messaging and entering personal information—despite not knowing what registering would actually involve. Some first-timers tried to sign in, not remembering if they were return customers or not, and their login information got rejected over and over. Meanwhile, return customers had trouble remembering their login information, often including the email address they used to sign up, which made the “Forgot Password” process problematic. Spool found that 45% of all customers had multiple registrations in the system, and there were 160,000 “Forgot Password” requests a day—75% of which did not result in a subsequent purchase.
All the team had to do was replace the “Register” button and put a “Continue” button with a disclaimer that creating an account was not necessary to make a purchase. The number of customers purchasing skyrocketed by 45%, resulting in $15 million the first month. Over the course of the year, that one tiny design change resulted in—you guessed it!—$300 million in new revenue.
The moral of this story is not just about the risks of putting extra steps between customers and the actions you want them to take (although that’s certainly one takeaway). More importantly, even the tiniest-seeming elements of user experience can have a huge trickle-down impact on profitability. For ecommerce sites, the connection between usability and revenue is clear and direct, but the impact of UX goes beyond experiences that are directly connected to incoming revenue. An investment in usability can be earned back through KPIs such as increased usage, increased productivity, fewer calls to help desks or call centers, reduced training time, increased registration rates, and many others.