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One way for surviving the downturn – delineate your business value (#7 and #10 in a series of 16)

by peterme

I’ve been dismayed how little discussion there seems to be in experience design blogs and mailing lists about how our industry and community can best respond to the financial crisis. It feels to me like we just want to put our heads in the sand and pretend everything is just fine, nothing to see here, please carry on. As such, I was happy to see Michael’s recent post about managing through a recession, as it provided necessary context for thinking about our role as the crisis transpires.

Adaptive Path was born in the debris of the dot.bust, and on mailing lists and in conferences, the hot topic at the time was “ROI.” What is the “ROI of User Experience”? How do I justify spending money on what I do? We pursued this line of inquiry, which lead to our first research report, “Leveraging Business Value: How ROI Changes User Experience.” (You can download it for free.) What we realized was that you can’t sign up user experience for a simple ROI (the factors are too complex), but you can make a strong case for user experience to not be considered as just a cost of doing business (as it often is), but as an investment that can drive real business value. Companies that engaged in such practices had happier employees, and often produced better work.

The challenge is in making the connection. #7 in my series of 16 steps to becoming an experience-driven organization is that You Must Connect Experience Design Work to Financial Outcomes. In our report, we put forth the following model for developing business cases for user experience work:

We call it the “Linking Elephants,” and it’s based on the precept that design encourages behavior. So, by understanding a business’ problems or opportunities, we can figure out what behaviors we’re hoping to engage, and then connect that behavior to a financial outcome. So, for an ecommerce site, you might have:

business opportunity –>
desired behavior –>
behavior metric
* value metric
= financial outcome
Increase purchases per visit Customer purchases additional title each visit Quantity of additional purchases per week * $ amount of each additional purchase = additional $ per week
2000 per week * $14.50 on average = $29,000 per week

In having made such calculations for one financial services client, we were able to help them realize many millions of dollars in initial funding, because they were able to demonstrate how this work was not just a cost, but could lead to additional revenue.

If you’re able to make such connections, and you are confident in your ability to affect change, then you should be comfortable with step #10 – Accept Accountability. Perhaps my single biggest frustration with designers is that they don’t want to accept accountability, but then they bitch and moan when no one listens to them. If you want to be heard, you need to place some skin in the game. Robyn Waters, for Vice President of Trend, Design, and Product Development, commented in an interview that, “There are many ways design can contribute to the bottom line. At Target, my designers were scored on a 50/50 basis. Half of their review was based on sales and profit numbers in the area of business they supported…” Those designers were listened to, because their business colleagues understood that they were directly invested.

I think this is a remarkable time for experience designers to demonstrate that, unlike what we saw from the world of financial services, the innovations we drive actually provide concrete value to both businesses and their customers. As Michael pointed out in his post, we can deliver a lot of benefit without any additional capital investments — our work can help organizations better choreograph their existing resources. Tools such as the linking elephants will help drive such realizations, and there is no better time for us to stand up and be (ac)counted.

4 Responses to “One way for surviving the downturn – delineate your business value (#7 and #10 in a series of 16)”

  1. Andreas Ringdal Says:

    You could turn it the other way around. What is the Loss of investment of not considering UX?

    Andreas

  2. Bryan Rea Says:

    The ROI of user experience has been a constant struggle on our team. Pretty much ever other team here can come up with hard numbers showing increases or decreases in certain metrics and those hard numbers are what people listen to. When all the design team can say is “I think…” or “I feel…” we don’t have a leg to stand. Without the ability to back up design decisions, the product ultimately suffers as we chase after the areas that DO have hard numbers. To me, the only way can ever change this cycle is to make design accountable like every other department and demonstrate its value.

    Thanks for making “Leveraging Business Value: How ROI Changes User Experience” free to the public. It’s a great read and I’m circulating it like mad.

  3. Alex Williams Says:

    You just made my day. Thank you.

  4. RIF Says:

    This is very helpful for those who have a job.

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