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Why Investing in UI Design Saves Costs, Increases Revenue and Retains Customers
A look at the ROI of design.

I hang around in a number of groups and forums for SaaS founders. Amongst all the discussions, I see very little mention of how to invest in UI/UX or even the benefits of doing so. Functionality, performance, and stability are typically higher on the priority list.

I find this baffling (and not just because I’m a UI designer!). Investing in your product’s UI/UX has a potentially very large ROI, which many SaaS companies are missing out on. And it’s not as complicated as it may seem.

This is especially true for products which have a higher-than-desirable churn rate (usually an indication that the software isn’t easy enough to use or doesn’t fit in well enough with users’ lives).

So why is the ROI of UI/UX improvements so high?

The exact ROI is hard to quantify since each product has different metrics.

The general rule of thumb in organisations that routinely focus on improving UI/UX is that every dollar returns $10-$100.

This is because the cost of changing part of your SaaS product increases nonlinearly as development goes on. Focusing on design saves costs down the line, especially early on in the product development cycle.

An oft-quoted statistic from Software Engineering: A Practitioner’s Approach by Roger Pressman is that fixing a problem in development costs 10 times as much as fixing it in design, and 100 times as much if you’re trying to fix the problem in a product that’s already been released.

Want to add offline syncing and version history to your data collection app?

It’s easy in the requirements gathering or wireframing phases – just spend an extra week scoping the functionality and designing user flows.

Want to add those same features when your product is live and being used by thousands of people? You’re looking at months of development time, potentially disrupting the service of your existing users, and dozens of unforeseeable bugs and issues.

Which would you rather deal with?

Business benefits of improving visual design and usability

Improving the cost effectiveness of your development process isn’t the only benefit of investing in UI/UX.

Focusing on design also helps your bottom line by improving a wide range of business metrics such as user retention, customer loyalty, and user productivity.

Usability guru Don Norman is fond of saying that emotions change the way humans solve problems. If you’re in a positive mood, you’re more open, creative, flexible, and patient.

Contrast that with how you act when frustrated or tense – your focus narrows and your lateral thinking abilities shut down.

Let’s apply that concept to software interfaces. If a UI is well-designed (i.e. it’s aesthetically pleasing and follows universal design principles), users feel good when they interact with it, boosting their problem solving abilities. The more effectively they can solve problems, the more they’re going to be able to accomplish with your product.

Are well-designed interfaces actually easier to use?

The “Aesthetic Usability Effect” – the phenomenon that aesthetic interfaces seem easier to use – certainly exists. Most studies find that users perceive the usability of a system to be better when the design is aesthetically pleasing. There are many nuances though, which we can explore through some very interesting studies.

In a 2010 study in Switzerland, researchers gave 60 teenagers two simulations of mobile phones and asked them to perform a number of typical tasks on them. Although both simulations had exactly the same features, one was designed to be visually appealing, and the other was designed to be garish.

Predictably, the participants rated the nice-looking phone to be more usable than the other one. However, the visually appealing phone also had an impact on task performance – on average, the participants took less time to complete their tasks. This indicates that a visually appealing interface helps users to work more quickly.

It’s important to note here that the participants perceived the more appealing option as easier to use – beyond reduced task completion time, the appealing design wasn’t measurably easier to use.

A study in the Netherlands asked 828 participants about a generic website. The researchers found that how easy the site was perceived to be and how enjoyable the participants found it were strongly influenced by how visually pleasing it was.

Another study in Canada showed that people process information more efficiently and are more patient when completing tasks when using an interface that follows the principles of good design.

The theory is that an ordered, clean design minimises the need to manually process data – it happens more automatically. It’s also thought that visually appealing interfaces create an atmosphere that is pleasant and engaging, which is why they hold users’ attention for longer.

“Performance (as represented by response time) increases with increasing aesthetics level. This evidence provides strong support for the implementation of aesthetic layout principles in interface design”. (The relationship between visual interface aesthetics, task performance, and preference by Carolyn Salimun)

You should take into account cultural differences when designing interfaces. Users might not perceive an interface as beautiful depending on their culture and background. If your users come from many countries, it may be worth investing in designing variations for each culture. This study by Katharina Reinecke explains more.

So why do increased perceived usability, more efficient information processing, and greater willingness to stick with an interface help your bottom line?

The easier an interface is (or is perceived to be), the more users will be willing to learn it and keep using it.

When users stay longer with your app, the likelihood that they’ll learn how the app works properly and/or complete a task (or their goals) goes up – there’s a better chance that they’ll see the value in your product for them and become (or stay) a paying customer.

A polished visual design also increase users’ trust in your product and company. The most important factor for evaluating how credible a web product is is how professional its’ website looks (even more so for B2B!).

People subconsciously think that because a company’s web presence looks attractive and shows attention to detail, so must their products.

What is involved with investing in your design?

Investing in the research stage is the most important (and most cost-effective).

Attitudinal studies indicate how users think or perceive a product. They tend to be less useful, because while users say one thing, frequently their behaviour is different.

Behavioural studies capture actual user behaviour. They are useful for getting an objective view of people’s reactions to your product.

A mix of behavioural and attitudinal studies is also popular. One example is unmoderated remote panel studies (e.g. usertesting.com), in which users record themselves interacting with your product and thinking out loud.

How to invest

Critics argue that it’s very difficult to know whether or not UI/UX improvements actually lead to things like increased revenue.

The argument is that because these kinds of changes take place in non-controlled experiments (i.e. there aren’t 2 versions of the product being tested at the same time), it’s difficult to tell whether UI/UX changes actually make a difference to conversions.

This is true on some level. However, it IS possible to choose good baseline metrics which are closely connected to revenue, retention etc. before you make any design changes, and test those.

Before you invest in UI/UX improvements, pick the right metrics to track. The narrower your metrics, the easier it will be to judge the ROI of your usability investment.

For example, if you choose to track the entire number of sales across the site, that metric could be influenced by many other external factors beyond your control.

But if you choose to only measure drop-off rates at a critical part of your product’s sign-up process or sales per page view, it will be much more clear whether your usability improvements contributed to the result.

For SaaS products, we can break metrics down into 3 groups:

1. Development metrics (Goal: reduce costs). Your development team needs to be organised to keep track of these metrics.

2. Sales (Goal: increase revenue). The narrower the better here.

3. Product Use (Goal: improve product effectiveness)

Once you’ve chosen your metrics, you need to spend time capturing good baseline data so you can see ‘before and after’.

You’ll need decent traffic here – as with measuring conversion rates, any data that involves fewer than 1000 unique visitors isn’t going to be that reliable.

Another thing to consider creating as early as possible is a style guide – redesign and create a style guide (flexible, scalable and cost-efficient, but also customizable, reusable and consistent. saves development time and cost down the line – do it as early as possible).

You can see many case studies here.

Human Factors International have a very popular UX ROI calculator.

CareerFoundry has an excellent guide to conducting UX research which I recommend.