Every product or service people interact with has been designed. Consider the business traveler flying from Cleveland to Denver. The airplane itself, the seat she is sitting in, the computer she works on, and the software she uses have all been designed. Even the presentation she is preparing for her meeting is designed. Some of these artifacts have been designed well, yet very little thought may have gone into others. Regardless of whether an artifact is consciously engineered, it inherently has a design.

This design affects every point at which a customer interacts with a product or service, affecting the customer's experience. Consider a bank, for example. The cleanliness of the building, the way the employees treat their patrons, and the online banking functionality all affect patrons' experiences. If one of these service points does not provide an optimal experience, the customer may take their business elsewhere.

Thus, the term User Experience (UX) must encompass a systemic approach to the entire array of situations in which a customer or user interacts with a product or service. The International Standards Organization (ISO) defines usability as "the effectiveness, efficiency, and satisfaction with which specified users achieve specified goals in particular environments." [ISO, 2006] A systemic approach will also include users' enjoyment or pleasure from interacting with a product or service.

User experience affects a company's financial health and public perception, sometimes in not obvious ways. Unfortunately, when UX is ignored, companies do not understand the issues users have with their products. Problems caused by these oversights have led to manufacturers being found liable for defective designs. The court evaluation of a product's usability has been the first time some manufacturers understood user experience design. [Bias and Mayhew, 2005]

While graphic artists, web designers, industrial and human factors engineers, and many others may categorize themselves as user experience professionals, at POMIET, the focus is on using proven techniques for developing a positive experience for any affected product or service. We believe that this focus promotes three significant benefits to an organization: decreased product development costs, increased revenue, and reduced time to market.

Decrease Costs

User experience costs are often considered additive; that is, if the product development does not include formal UX activities, such as usability testing or prototyping, there will not be any UX costs. This is a false assumption. As mentioned above, every product is designed; what varies is who performs the design and what process they follow. The user experience takes time to build, regardless of whether it is deliberately engineered with UX in mind. By intentionally incorporating UX into the engineering process, companies decrease the costs of product development.

In their article on cost estimating, Lederer and Prasad note that 63% of all projects overrun the budget. Furthermore, they show that the top 4 issues for overrun are unforeseen usability issues. [Lederer] Such overruns are often caused by overlooked tasks; user experience techniques such as user analysis and task analysis address these types of issues. Thus, the intentional use of UX design decreases product development costs of both internal and customer-facing products by minimizing the correction of expensive mistakes.

Products that have been developed at POMIET generally focus on the user experience. POMIET and others have found that the user interface accounts for a significant portion of the development effort. These findings demonstrate that there is too much to risk by avoiding UX design. Consider these results:

• User Interface code is 47% to 66% of code [MacIntyre, 1990]
• User Interface takes 40% of the development effort [MacIntyre, 1990]
• User Interface accounts for 80% of unforeseen fixes/scope change [Pressman, 1992]
• User Interface represents 100% of the customer's product experience

With this disproportionate amount of effort placed on the user experience, a prudent project manager must control costs in this critical component of product development. In a well-known study, Gilb estimates that correcting a problem during development costs ten times more than fixing the same problem during the design stage. [Gilb, 1988] He notes that once a system is released, the cost to fix a problem increases to 100 times that of a design-stage fix. (Kemp verified Gilb's work in an unrelated study. [Kemp, 2004]) Pressman states that 80 percent of software life-cycle costs occur during the maintenance phase; many preventable maintenance costs are associated with user requirements and other user experience design problems. [Pressman, 1992]

Typical user experience techniques focus on speaking with users during the conceptualization phase of a project. Through surveys, observation, inexpensive prototyping, and usability testing, a user experience design professional will clarify the user interaction and focus on the development team. In this way, user experience design provides a forum to detect usability problems early in the development cycle. In one example, American Airlines reduced the cost of fixing usability problems by 60 to 90 percent by correcting the issues in the conceptualization phase rather than waiting for product development. [Bias & Mayhew, 2005]

Regardless of whether a product or service is consciously designed, customers will evaluate the experience and make decisions about the organization based on the experience. Harris Interactive reported that 41% of users who had a poor experience immediately left the website and permanently switched to a competitor. [Harris, 2005] Contrast this with a Forrester Research finding in which 42% of US web buying consumers made their most recent online purchase because of a previous good experience with the retailer. These studies indicate that customers appreciate a good user experience and will be loyal to the organization that provides one.

While user experience is generally focused on customer-facing experiences, internal tools and processes can also benefit from such techniques. For example, a POMIET usability study of data analysis tools and workflow reduced analyst workload from 5 days per task to 3 days by incorporating a slight change into the system used to compile the data. Similarly, IBM changed an internal tool that reduced the time for each employee to complete a task by 9.8 minutes. This UX change resulted in a savings of $6.8M.

Increase Revenue

Many customers identify UX as a critical factor in their purchase decision. When an organization incorporates quality UX design into its product development, customers get the message that they are valued. Bias and Mayhew report a study in which improvements in UX increased product revenue by more than 80% over the first release of the product. The revenue generated by the second generation of the product was 60% higher than projected.

This focus on user experience is of greater importance for e-commerce sites in which integrating UX design to create a competitive edge is crucial. As stated above, 41% of users who have a poor experience abandon the site, never to return, but repeat customers are invaluable. New users at one site spent on average $127 per purchase, while repeat customers spent nearly twice that. [Neilsen, 1997]

Other sources demonstrate that good UX design increases customer loyalty – Forrester's research found that 42% of US web buying consumers made their most recent online purchase because of a previous good experience with the retailer. Even while Apple committed one business mistake after another in the 1980s and 1990s, it remained competitive. It rebounded because of its unusually loyal customer base, garnered by the high quality of its products.

A positive user experience increases customer loyalty and the number of purchases made by customers. One study reported that the sales on a website increased by 225% by simply providing sufficient product information to the customers at the right time. [Spool, 2001] Another study estimated that the number of buyers increased by 40%, and the order size increased by 10% due to improvements in user experience. [Creative Good, 2000] These studies illustrate how a systemic view of the user interaction process affects the customer response. While a site may provide an excellent shopping cart experience, the greater value comes from understanding what customers want to know and when they want to know it.

According to Jakob Nielsen, usability efforts can increase sales by 100 percent. [Nielsen, 1998] This was demonstrated recently in an example reported by Jared Spool and his $300M button. [Spool, 2009] As the story goes, a major e-commerce site had a page in their shopping cart experience that prevented customers from completing $300M worth of transactions.

The page on the site was simple. It only contained an email address prompt, password prompt, a login button, and a register button. However, once the user's experience was analyzed, Spool discovered that customers didn't want to register – they just wanted to complete their purchase. This change in the checkout process led to a revenue increase of $15M in the first month and $300M in the first year.

For one final example illustrating the value consumers place on quality user experience, consider an experiment conducted by UX Magazine in 2007. [Lax, 2007] On November 1, 2006, UX Magazine invested $50,000 in a portfolio of companies it considered to value user experience. Over the next year, the value of this portfolio increased by 39.37%. This performance outpaced all major indexes over the same period (NASDAQ 18.09%, S+P 9.47%, NASDAQ 100 26.81%, NYSE 14.67%).

Decrease Time to Market

The benefits of user experience design are present throughout the product development life cycle. Mauro reports that the greatest return on investment occurs when organizations employ the UX techniques during the business objectives definition phase, the system specification phase, and the conceptualization phase [Mauro, 2002]. Unfortunately, most product development organizations utilize these techniques near the end of the development cycle, which is too late to incorporate the findings. By applying UX techniques at the early stages in the development process, developers can design and build the product more efficiently, which results in closer release dates.

A significant benefit of utilizing UX techniques early in the product development life cycle is that the team understands the users. This understanding can focus a team with a limited budget and enable them to concentrate their resources on the features that users have verified are important. This focus often leads to fewer features, which leads to more straightforward products and greater user satisfaction.

Fewer features to develop also lead to a shortened development cycle, which can mean more significant profit. Bossert found that introducing UX in the concept phase of development reduced the product development cycle by 33 to 50% [Bossert, 1991]. Bias and Mayhew report products may lose up to 50% of their profit by a one-quarter delay in the release. [Bias & Mayhew, 1994] Thus, speeding up development is crucial for integrating usability into product development as early as possible.

Often companies will attempt to keep up with the competition by adding features to a product that are perceived to add value rather than keeping the product simple and focused on what users want. However, studies show that more than 95% of customers will use less than 5% of the features of your product, and customers will rarely use about 70% of the functions. [Mauro, 2002] Thus, companies are investing in features that are not wanted by trying to keep up with the competition. Mauro also reported that user research reduced the feature set of a product by 85%. This reduction enabled the company to save $15M in development costs and release the product 18 months early.

Conclusion

Every user interface or customer interaction inherently has a design. The sooner an organization consciously decides to design these interactions, the benefits materialize to both the organization and the user.

References

Bias, R. and D. Mayhew (2005) Cost-Justification of Usability Engineering, Morgan Kauffman, San Francisco, CA.

Bosert, J. (1991) Quality functional deployment: A practitioner’s Approach. ASQC Quality Press, Milwaukee, WI.

Cooper, A. (2003) Universally Unloved. Visual Studio Magazine, May.

Gilb, T. (1988) Principles of Software Engineering Management. Addison Wesley, Reading, MA.

Harris Interactive (2008), Tealeaf 2008 Online Transactions Survey

International Standards Organization (ISO) (2006) International Standard 25062.

Kemp, S. (2004) Project Management Demystified: A Self-teaching Guide, McGraw Hill, New York, NY.

Lax, J. (2007) Investing in UX

Lederer, A. and J. Prasad (1992) Nine Management Guidelines for Better Cost Estimating. Communications of the ACM 35, 2. pp. 51 - 59.

MacIntyre, F., K. Estep, and J. Sieburth (1990) The Cost of User-Friendly Programming. Journal of FORTH Application and Research 6, 2. pp. 103 – 115.

Mauro, C. (2002) Profesional Usability Testing and Return on Investment as it Applies to User Interface Design for Web-based Products and Services. MauroNewMedia White Paper.

Nielson, J. (1997) “Loyalty on the Web,” Alertbox.

Nielsen, J. (1999) “Web Research: Believe the Data” Alertbox.

Pressman, R. (1992) Software Engineering: A Practitioner’s Approach, McGraw Hill, New York, NY.

Spool, J. (2001) Are the Product Lists on Your Site Reducing Sales? UIE Whitepaper.

Spool, J. (2009) The $300 Million Button