The cost of investing in a great user experience (UX) is clear, or so you thought. You may be analyzing the cost of improving your UX on metrics like direct cost—such as employee salaries and agency costs. However, you will soon realize those metrics are too simplistic and do not surface the bigger picture. You also have to take into account the cost of not doing a great user experience when you are evaluating UX projects. By not focusing on UX, you are exposing your company to missed sales, dissatisfied customers, and disengaged employees.
As we’ve discussed, employees have a growing expectation to use enterprise software that looks and performs as well as consumer applications. Likewise, consumers have an expectation for simplified experiences on any device within context. When there is a gap between these expectations and your offering, it turns into a hidden cost of bad UX. In this post, we are going to explore some of the various forms that this hidden cost can take.
In a study provided by Adaptive Path, Bank of America conducted research into why they were falling behind their competition. They were able to identify “yield,” or the number of customers who successfully complete online registration as a percentage of those who start it. This metric would serve as the basis to indicate better user experience design. Work then got started in designing a better online enrollment process that addressed this very issue. Seeing as yield improved the bank’s bottom line, at the end of the design engagement they saw a 45% increase in customer registration. The outcome of this project was a huge success due to a drastic change in usability. How much is a lost client worth to your business?
The implications of a poor user experience also surfaces when we look at the value of lost customer relationships. In a survey performed by Genesys, they found that the global average value of lost relationships is equal to USD $243 per year. This is a stark contrast compared to the the UK, where the average most valuable relationship is USD $396. This is followed closely by Australia at USD $339 and Canada at USD $330. When your systems provide a poor user experience, you lose. How many customer relationships does your user experience impact? Negatively or positively?
In 2013, the 100 year old Avon Products company pulled the plug on a $125 million mobile software overhaul after a pilot of the system in Canada revealed that the iPad rollout was too difficult to use and many sales reps began to quit the company. Bad user experience is not just with your customers. Your employees are also demanding better tools to get the job done. In a highly competitive talent marketplace, your employees will stand for bad tools only for so long. Are your tools helping your employees to be the best they can be?
Forrester released the “Business Impact of Customer Experience” report in March 2014. In this report Forrester estimated that moving from a below-average customer experience to above average would return $1.4 billion in additional annual revenue for wireless carriers, $1.4 billion for Airlines, $494 million for insurers (up 61% from 2013), and $572 million for retailers (up 152% from 2013). Forrester once again concluded that there is a “high correlation between customer experience and consumers’ loyalty to a company”. This directly translates into sales and recommendations. Are your customers raving about you?
Organizations and governments will spend an estimated $1 trillion on IT hardware, software, and services worldwide this year. As IEEE found, of all the development projects that are started, 5 to 15 percent will be abandoned before or shortly after delivery due to poor usability. This amounts to $150 billion lost. This loss can be avoided with a user centered design approach. This type of approach will enable you to develop what the users need and present it in a manner that support their workflows. What portion of your development investment wasted because it does not serve your users?
We explored five forms that the hidden cost of bad UX can take. Incorporating proper UX from the beginning is quickly becoming crucial to staying afloat in the competitive landscape. A user centered design approach will greatly raise the quality of your UX and help you steer your product away from sinking on the hidden cost of bad UX.
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