The ROI of UX Research

Knowing how to sell UX research is an important part of every UX researcher's toolkit. This might not seem like the most exciting news for you. “I didn’t get into research to end up doing sales,” might you say. I’m sure you haven’t. However, the number of doors this key will unlock for you is well worth the detour of reading this article. I’ve made it concise and to the point for you.

First, we’ll start by seeing how knowing how to sell research will help you in your UX journey. Then, you’ll learn how to do just that by explaining the ROI of your research projects.

Let’s envision your UX career for a moment

Of course, the amount of choices you have depends on the boundaries of your imagination, but let's break them down into three big categories: working for a big company, working for a startup, and going freelance.

Working for a big company

If you decide to work in a big organization, getting stakeholder buy-in to allocate time and money to research activities will be a critical part of your job. Especially as you progress towards more influential positions. You can’t just expect other managers and executives to understand why user research is so important and how it can be a profitable investment.

Ultimately, the decision on how much to budget for product development will be made somewhere in the finance department. How much to spend on research from that budget will be decided by the head of the product department. It will be your job as a senior or lead researcher to make sure that these people understand how important it is to invest in research.

Working for a startup

On the other hand, if you work for a startup, politics will probably not have such importance in the decision-making process. Still, you will reach high levels of responsibility quickly. Sometimes you’ll even be the only researcher in the team. This means that you will carry all the weight of advocating for research on your shoulders.

Going Freelance

Lastly, if you go on the freelance route, you will have to learn to convince companies to work with you. Once they do, you must help them understand the value of our work if you want them to work with you again in the future. Surprisingly enough, clients that understand the full extent of the value of your work are also more likely to recommend your services to others.

Ultimately, regardless of the path you choose to take, as you progress in your career as a UX researcher, you will have to know how to make a case for UX research.

How to make a case for UX research

So, how do you sell research? Should you talk about the level of understanding that you can get out of the target audience? Or the frustrations you can avoid for the users? Maybe, but this type of argument will only take you so far. More often than not, what the people in front of you will really care about comes down to one thing: the money.

In other words, the questions you will need to answer are the following:

1. How will the proposed project increase revenue?
2. How will it save costs?

However, coming up with a precise estimation of the money that will be saved or earned thanks to research is close to impossible. In fact, even retrospectively, calculating the monetary impact of research is very difficult since research is only one of the multiple factors that affect the measurable outcomes such as retention, growth, or revenue.

So how can we claim our research will be — or has been — profitable without quantifying its impact? To be as concise as possible, we have to explain that investing in user research is the fastest way to improve your product’s UX, which, in turn, means selling more, sooner.

Now, of course, this is a bold claim to make and thus requires some explanation.

How UX research can improve the product

So how does research accelerate the improvement of a product’s UX, and how does that improvement systematically translate into more revenue?

Well, as we know from Design Thinking, it turns out that finding the right solution starts by finding the right problems to solve, and that can only be done through research. Yes, it is only through qualitative user research, such as user interviews and user tests, that we can get to the bottom of people's emotions and motivations. In other words, user research is the fastest way to figure out WHY the user didn’t click the button.

The sooner we introduce user research into the design process, the sooner we can identify problems, prioritize and start coming up with solutions to these problems. And yes, that means selling more, sooner.

On the other hand, without research, all the learnings that could have been accumulated and iterated upon during the design process are left for after the launch of the product or website. Only then will the product and marketing teams slowly start to learn from their (very human) mistakes with purely quantitative data they gather from Google Analytics, Hotjar, and Mixpanel.

Still, in the best of cases, the company will have to put their designers and developers back to work to solve the problem they identified only after the launch and, of course, pay them for it. Even then, if no qualitative research is done, this team will probably address the symptoms they will see when looking at numbers and charts. Chances are, these symptoms differ from the root causes of the problems the company is trying to solve. Needless to say, this company will sell less of their product than if they had done some UX research.

Metrics to consider

Now that we understand how doing research early on leads to selling more sooner let's dive one level deeper. Let's see which specific metrics can be affected by user research and how these metrics can affect either revenue or costs. Being specific about the metrics we want to impact will help us build a stronger narrative and become more credible when making a case for user research.

Metrics affecting revenue

Let’s start by listing the metrics that can be impacted by user research and affect revenue. For this purpose, I will borrow the famous AARRR Pirate Metric framework. AARRR is an acronym for the following metrics: Acquisition, Activation, Retention, Referral, and Revenue.

• Acquisition is the amount of traffic you attract to your website. This traffic converts into first-time users or customers. Understanding the problems and emotions of your audience through user research will help you craft and refine the message that will convert visitors into leads and first-time users of your product.
• Activation is the number of first-time users that perform key actions on your website or app. Normally, these are the actions that are most correlated to long-term retention. Adding a number of users or achieving a key user goal are a few examples. User interviews can help us understand the users' expectations, and user testing their first experience with the product will help identify and address any point of friction. Research can also be crucial in finding the "Aha!" moment, leading the user towards it, and laying the foundation for long-term retention.
• Retention is referring to the number of first-time users that come back at some point. Identifying and solving people's underlying needs and pain points increases the chances of them using your product again. It's that simple. And of course, increasing the amount of returning users and extending their lifecycle is key to maximizing revenue.
• Referral means the number of new users that you acquire, thanks to previous users recommending your product. Following the same line of thought, satisfied users are more likely to tell their friends about your product and write a nice review in the app store. They're also less likely to boycott you, which is incredibly costly. All in all, delighting your customers is effectively the cheapest marketing you can possibly do, and most importantly, it will have an amplifying effect on all other marketing efforts.
• Revenue is the goal. You can reach this by converting more visitors into leads. And converting those leads into long-term clients and evangelists is a profitable business.

Cost-related areas

Now, let’s have a look at the cost-related areas that can be affected by user research. These include:

• Minimizing design and development costs: Learning from your mistakes at the wireframing stage helps you avoid having to redesign and rebuild features or even killing them later on. In other words, one researcher can spare a substantial amount of time for an entire team of designers and developers. And as we all know, time equals money.
• Easing the pressure on Customer support: Once you identify and solve usability issues, fewer people will contact support; you will be able to shrink your support team and eventually save money. Additionally, researchers can collaborate with customer support reps and sync a support software like Zendesk to their research systems to optimize the process of identifying and prioritizing usability problems.
• Relying less on sales: Ultimately, if your product sells itself easily and the leads you generate regularly convert into long-term customers and ambassadors, why would you spend your time chasing customers? Of course, some markets are sales-intensive by nature. However, whatever your market, odds are understanding your customers through research and offering them a better UX will decrease your share of outbound sales.

Conclusions

In summary, doing research is like turning the light on before going to bed. When you go to the bathroom at night, you get there faster and with fewer bumps. Except, in this case, every second and every bump is worth a lot of money.

As researchers, it is our job to figure out how exactly we can create more value for the specific clients or employers we're working for. It's up to us to find out where the biggest opportunities for improvement lie and how we can measure improvements.

Setting these metrics upfront and tracking them will, in turn, make us more accountable. It may increase some pressures but also help us learn from our mistakes and better estimate our own impact on the projects we work on.

Searching for the right UX agency?

UX studio has successfully worked with over 250 companies worldwide.

Is there anything we can do for you at this moment? Get in touch with us, and let’s discuss your current challenges.

Our experts would be happy to assist with the UX strategy, product and user research, or UX/UI design.