In this webinar on-demand Dr. Susan Weinschenk will share not only the basic methods of discussing and calculating ROI, but also some new techniques based on behavioral economics. You will learn: - How to determine the best way to talk about ROI depending on who you are talking to - Typical and powerful ROI indices - Basic and not so basic calculations of ROI you can apply to your project

1. Webinar: The ROI of UX Research
Featuring Susan Weinshenk of The Team W

2. Rapidly Test Usability & Measure UX
UserZoom is the All-in-One UX Research Platform for the Data-Driven Enterprise

3. • Chat box is available if you have any questions
• Look out for a quick poll question
• There will be time for Q&A at the end
• We will be recording the webinar for future viewing
• All attendees will receive a copy of the slides/recording
• Continue the discussion using #UZWebinar
Quick Housekeeping

4. The ROI of User Experience

5. ROI = Net profit / Investment
(Net profit is Gross profit –
expenses)

6. Example:
I create a new product
It brings in $100,000 of revenue in the first year.
It cost me $80,000 to create and market it
ROI = Net profit / Investment
ROI = ($100,000-$80,000)/$80,000
ROI = $20,000/$80,000
ROI = .25 or 25% for year one

7. But how does this translate into ROI of UX?

8. Sample ROI Calculation --
Conversion
100 visitors a day put an item in the shopping cart of
your e-commerce site
But 30% don’t complete because of a user experience
problem with the cart
You are losing 30 sales a day due to a UX issue
@ $10 a purchase = $300 a day lost
300 x 365 = $109,500 a year lost
It will take $50,000 fix the UX issue

9. Conversion gained = $100,000
Cost to do re-design = $50,000
ROI = (100k-50k)/50k
ROI = 50k/50k
ROI = 1 = 100%

10. Poll #1: Do you currently do ROI calculations
on your UX work?
Most of the time
We’ve done a few
Once or twice
We’ve never done this

11. Real Life – Conversion
at large online retailer
Approximately 10,000 abandonments of shopping cart each
day.
Average purchase -- $36 – potential loss of 360k each day.
User testing to figure out the problem and then rework to fix -
- $75k
Abandonment reduced by approximately 25%
2500 people a day purchasing average of $36 = 90k a day
saved
90k * 365 = $32,850,000 a year saved
ROI = (32,850,000 – 75,000)/ 75,000
ROI = 32,775,000/75,000
ROI = 437 or 43700%

12. You are on a team designing a software app.
You think the plan for the navigation bar/information
architecture is poor. You want to do a card sort to
design it right before it goes into development.
Cost to do card sort = $5,000
Cost to do re-work = $50,000 (this is the cost to fix it
later if you don’t do the card sort – this is the amount
you are saving)
Sample ROI Calculation

13. ROI = (50k-5k)/5k
ROI = 45k/5k
ROI = 9 or 900%
Sample ROI Calculation

14. Cost to do card sort = $15,000
Cost to do re-work = $70,000 (we will save this
money)
ROI = (70k-15k)/15k
ROI = 55k/15k
ROI = 3.66 or 366%
Real Life – Medical
Imaging/Insurance Application

15. My First ROI Calculation
(circa 1994)
Software for bank tellers
5000 users
Interface was hard to learn and hard to use -- poor user experience
Assumptions: waste 5 seconds per transaction
100 transactions per person per day
5000 people x 100 transactions x 5 seconds = 2.5 M seconds = 41,666
minutes = 694 hours x $7/hour = $4,858 a day x 252 days = $1,224,216

16. That’s Not All!
Take training from 2 weeks to 2 days, saves $1000 in training
costs per new person
10% turnover = 500 people a year x $1000 = $500,000 per
year in training
PLUS help desk -- reduce calls by half, save 300 calls per
month x $10 per call = $3,000 a month = $36,000 per year
$1,224,216 + $500,000 + $36,000 = $1,760,216 in first year
Cost to fix: $500,000
ROI = (1,760216-500,000)/500,000
ROI = 1,260,216/500,000
ROI = 2.52 or 252%

17. To Calculate Your ROI
1. Decide on your key indicators.
2. Estimate lost opportunity, cost of having a
poor user experience, or money to be made
with a fix.
3. Estimate the cost to research and fix the
problem.
4. Do your ROI calculation: Net Profit/Investment

18. When You Design The User
Experience Well
–Increases conversion
–Saves user time
–Saves developer time
–Increases customer satisfaction
–Increases use of the technology
–Reduces training costs
–Reduces calls to the help desk
–Increases self-service

20. Poll #2: Which key indicator is the most
important to you right now on your
project(s)?
Conversion
Saving users time
Saving developer time/avoiding costly
rework
Other
I don’t know

21. Questions for chat:
I need to convince (person or role) that (what you
need to convince them about). Would doing an ROI
calculation help?
Or
I’m interested in trying an ROI calculation, but here’s
something I don’t quite understand that is holding me
back: __________________________________

22. Productivity:
(Time Saved) X( Employee Cost) X (# of employees) =
Cost Savings
(1 hour a week) X ($30/hour) X (1000 employees) =
$30,000 per week = $1,500,000 a year
Key Indicator Examples

23. Cost of Rework:
(# of changes) X (Avg. hours per change) X (cost of
developer) X = Cost Savings
(20 changes) X (8 person hours each) X ($40/hour) =
$64,000
Key Indicator Examples

24. Next Steps:
• Try one out – pick a simple project and
one key indicator to start.
• Email or call me if you get stuck
• Look for our online video course coming
soon
• Ask for a workshop (remote or in-person)

26. Questions

27. Susan Weinschenk
susan@theteamw.com
@thebrainlady
www.theteamw.com

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