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The ROI of UX Research in Conversion Rate Optimization Projects.

While online retailers deploy methods such as A/B testing and web analytics, only about 22% of them are satisfied with their conversion rates according to Econsultancy’s 2014 Conversion Rate Optimization Report. User Experience Research, interestingly enough, is not referred to as a conversion rate booster. It appears that many companies are not yet aware of the Return on Investment (ROI) of UX Research in terms of Conversion Rate Optimization (CRO) projects.

Better UX + More CR = Higher ROI

Although at first glance User Experience flaws do not appear to be mission critical to some companies, many e-commerce businesses seem to underestimate their scope. By way of a simple calculation, UX expert Dr. Susan Weinschenk explains what the ROI of UX Research represents in terms of CRO projects:

100 visitors place products worth $10 in the shopping cart on a web shop on a daily basis. Because they are unable to locate their preferred payment option, 30% of the visitors abandon their purchases. The company misses out on 30 purchases, amounting to $300 per day. In terms of an entire year, this amounts to a total loss of $109,500. If the company invests $20,000 as well as two weeks to optimize the checkout procedure, they will recover their investment within 10 weeks.

Improved UX increases conversion rates by 400%

This calculation proves the point: UX optimized web sites have a positive impact on conversion rates. When online shoppers quickly and easily find what they are looking for, they proceed to checkout with a larger shopping cart than customers who feel lost due to a confusing product and browsing structure. According to Willy Lai, Apple´s Director of User Experience and Creative Design, improved UX leads to an increase of conversion rates of up to 400%.

Don´t generate traffic, generate relevant traffic

Many online retailers attempt to increase conversion rates by means of higher traffic rates through online advertising. The success of this click-through advertising is based on the number of clicks people generate on banner ads, which is then compared to the number of ad impressions. Online advertising is not a bad solution to achieve a short-term increase in traffic. However, this sector has experienced significant development.

Even if a website’s traffic is very high online shops featuring browsing barriers and negative user experiences, as well as content deemed non-relevant by users, will fail to improve conversion rates. General traffic is not the same as relevant traffic, as Adam Audette, Chief Knowledge Officer of Digital Marketing Agency RKG, correctly sums up: “Today it’s not just about getting the traffic – it’s about getting targeted and relevant traffic.”

Adapt SEO and SEM campaigns to user needs

If companies conduct UX tests called Voice of the Customer Surveys (VoC) on a regular basis, they can identify user needs and align their communication approach to site visitors accordingly. With this testing approach, real-time visitors are invited on a live site or app by means of a layer and are asked to provide feedback related to their browsing experience. VoC also assists online retailers in adjusting keywords and copies of their SEO and SEM campaigns to customer needs. This enables companies to achieve more relevant traffic, increase time on site, encourage purchases and boost order volumes.

Beyond improving conversion rates

The ROI of User Experience initiatives impact more than increased conversion rates and becomes apparent in other corporate sectors. Usability flaws not only jeopardize potential revenue but they also consume internal resources. For example, displaying easily accessible and understandable information on a website reduces the volume of incoming calls to customer service. Thus, you are not only able to reduce customer care costs but also increase customer satisfaction rates as they obtain swifter responses to their queries (or have no need to reach out in the first place).

Added value of UX for web businesses

The added value of UX Research can be summarized based on the following factors:

  • Increase in conversion rates
  • Higher order volumes
  • Easier purchase process
  • New customers via “word-of-mouth” recommendation

Conclusion

Investing time and budget to solve usability flaws and optimize the UX of a website, as well as targeted content and a positive user experience, leads to increased conversion rates. To be successful, the right UX tools must be established initially. Companies are then able to perform and evaluate user research on a regular basis and optimize conversion rates step-by-step.