Return on Investment for Usability

— Published April 28th, 2005  |  by David Moore

Writing in About Face 2.0, the bestselling book on improving interaction design, Alan Cooper outlines the usability challenges facing people who build websites:

• we're ignorant of users: we might know who will be using the site, but do we know how they'll be using it, or what would make them happy?
• we have a conflict of interest: the designers are often the builders, and we're tempted to arrange things so they're easy for us to build and maintain (which might not be the best arrangement for our users)
• we lack a process: we (should) have a clear development plan, but too often it doesn't include a robust process for 'transforming an understanding of users into products that both meet their needs and excite their imaginations' (1)

One extension to these points is that even if we think we know what they want, as designers we can't speak for users. Also, what users say they want is often not what would help them the most (2).

Which is where a serious approach to usability comes in. Rather than including some token user testing of a site when it's all but completed, incorporating a user-centred approach throughout the project reaps the most benefits.

According to Aaron Marcus' white paper, 'Return on Investment for Usable User-Centered Design: Examples and Statistics, the main benefits of this approach include (3):

• Reducing development costs (saving time and money on development, maintenance and redesign)
• Increasing sales revenue (increasing transactions, traffic, customers and retention)
• Improving effectiveness of use (increasing success rate, productivity, ease of learning and use, trust in systems, and job satisfaction; reducing user error and training and support costs)

But how do you sell these benefits to a manager who is asking for return on investment (ROI) figures?

There are several rules of thumb which are regularly quoted, including how 'Sun Microsystems has shown how spending about $20,000 could yield a savings of $152 million dollars. Each and every dollar invested could return $7,500 in savings' (4).

Jakob Nielsen's report on ROI for usability unsurprisingly came up with some clear numbers as well: 'Development projects should spend 10% of their budget on usability. Following a usability redesign, websites increase usability by 135% on average; intranets improve slightly less.' (5)

However, there have been some cogent arguments against Nielsen's methodology (6), and the generalised statistics are very inaccurate when used to predict ROI in specific projects (as your manager would know).

A better approach is to generate your own calculations, based on the details of your project. In doing this, the more precise you can be, the better.

For example, choosing to focus on sales figures might seem to make sense for a retail site: 'before the redesign, we sold 100 widgets a day, afterwards we sold 200, therefore the redesign has doubled our sales". But of course, there might be many other factors that influenced the changing sales - other promotions, the time of year, a price-hike by your competitors.

Looking at more granular data allows for a more accurate picture: abadoned carts, sales per page view, number of errors, for example. Look for metrics that can be reliably tied to the particular elements of your redesign.

Calculating a precise ROI for usability work can be an involved process, but so long as the focus is on establishing users' needs and behaviours, the addition of usability analysis to a project will reap rewards.

References

1. Alan Cooper and Robert Reimann, About Face 2.0 - The Essentials of Interaction Design, Wiley Publishing, 2003
   http://www.amazon.co.uk/exec/obidos/ASIN/0764526413/202
2. John S Rhodes, A Business Case for Usability:
   http://www.webword.com/moving/businesscase.html
3. Aaron Marcus, Return on Investment for Usable User-Centered Design: Examples and Statistics (.pdf)
   http://www.amanda.com/resources/ROI/AMA_ROIWhitePaper_28Feb02.pdf
4. Louise Ferguson, Usability return on investment (ROI) in the research literature
   http://www.louiseferguson.com/resources/research-roi.htm
5. Jakob Nielsen, Return on Investment for Usability
   http://www.useit.com/alertbox/20030107.html
6. Peter Merholz and Scott Hirsch, Report Review: Nielsen/Norman Group's Usability Return on Investment
   http://www.boxesandarrows.com/archives/report_review_nielsennorman_groups_usability_return_on_investment.php