What is a UX guide

The ROI of UX and the magic formula for Growth

Imagine you finally have the answer to your problem: You have the magic formula for conversion growth found and can convince your team and your superiors with it, Budgets invest in UX testing and the Increase ROI instead of controlling expensive ad campaigns with less promising keywords.

The magic formula

The magic formula for your website's success is:

ROI from UX: The Magic Formula for Growth

 

B = V × C × L

B = Everything that includes the business of your site

V = unique visitors who come to the website

C = conversion rate, the percentage of visitors who become customers.

L = Loyalty Rate, the degree to which the customer will return to purchase repeatedly.

Of course, other variables must also be taken into account, such as the size of the shopping cart or the margin of the most popular products. But in general, the success of a website is determined by multiplying these three numbers.

 

How to use the formula for better ROI

So to double the business (B) of a website, you can double the number of Unique Users (UU). This is an expensive option because you would have to more than double the advertising budget - especially if you are already advertising with the best keywords and less promising or much more expensive keywords are available to you.

A more interesting approach is to double the conversion rate. It's still relatively cheap to double your conversion rates. According to a survey by the Norman Nielsen Group (usability expert group), 10% of your development budget for UX optimization improves your conversion rate by 83%.

Benefits of UX and conversion optimization compared to the scaling of the advertising budget

So if you use 15% of your development budget for UX optimization, the CR doubles. According to Adam Riese, doubling the CR is cheaper than doubling the advertising budget.

In the case of serious UX or usability errors, far more advertising budget fizzles out: If users do not find what they are looking for or what they have been promised, they do not convert and the ROI drops.

Currently the average conversion rates are 2-4%, with the performers also a few more percent, but this is rather the exception. Depending on the degree of UX maturity of a company, there are differences in useful investments. Established companies that already have UX and conversion experts in their product or marketing teams have to find ever more creative and complex ways to satisfy their customers, as all quick wins and low hanging fruits are ready to use.

 

UX methods that you can use for growth

Before you convince your superiors of the advantages and the necessity of UX optimization with the above formula, get an overview of the common UX methods and their areas of application.

As a growth marketer, you should familiarize yourself with them in order to Potentials and Possible uses to weigh up. Especially if you don't have a UX or conversion specialist in-house, but rely on external support.

UX method landscape

UX and user research methods

Usability laboratory studies

Participants are brought into a laboratory and given a number of scenarios that lead to tasks and the use of specific interests within a product or service.

Ethnographic field studies

Researchers meet and study participants in their natural environment where they would most likely come across the product or service.

Eye tracking

An eye tracking device measures where participants are looking while performing tasks or interacting naturally with a website, application, physical product, or environment.

Usability benchmarking

Usability studies are carried out with several participants using precise and predetermined performance scores.

Moderated remote usability studies

Usability studies conducted remotely using tools such as screen sharing software and remote functions

Unmoderated remote panel studies

A group of trained participants who have video recording and data capture software installed on their own personal devices are using a website or product while thinking aloud and sharing their experience

recorded for immediate playback and analysis by the researcher or company.

Clickstream analysis

Analyze the recording of screens or pages that users click and see when they are using a website or software product; It requires that the site be properly instrumented or that telemetry data collection be enabled.

A / B testing

(also known as "multivariate testing", "live testing" or "bucket testing")

A method of scientifically testing different designs on a website by randomly assigning user groups to interact with each of the different designs and measuring the effect of those assignments on user behavior.

Unmoderated UX tests

A quantitative or qualitative (automated) method that uses a special research tool to capture participant behavior and attitudes by providing participants with goals or scenarios for a website or prototype.

True-intent studies

A method that asks random website visitors what their goal or intention is in entering the website, measures their subsequent behavior, and asks whether they successfully achieved their goal in leaving the site.

Participatory design

Participants are provided with design elements or creative materials to shape their ideal experience in a concrete way that expresses what is most important to them and why.

Focus groups

Groups of 3-12 participants are led through a discussion on a range of topics, which through discussions and exercises provide verbal and written feedback.

Interviews

A researcher meets one-on-one with the participants to discuss in depth what the participant thinks about the topic in question.

Concept tests

A researcher shares an approach to a product or service that captures the key element (the value proposition) of a new concept or product to determine if it meets the needs of the target audience. it can be done individually or with a larger number of participants, either in person or online.

Diary / Camera Studies

A mechanism (diary or camera) is made available to the participants to record and describe aspects of their life that are relevant to a product or service or are simply relevant to the target group. Diary studies are typically longitudinal and can only be performed on data that can be easily recorded by the participants.

Customer feedback

Information provided by a self-selected sample of users, often via a feedback link, button, form or email.

Desirability Studies

Participants are offered various visual design alternatives and are expected to associate each alternative with a set of attributes chosen from a closed list; These studies can be both qualitative and quantitative.

Card sorting

A quantitative or qualitative method that prompts users to organize items into groups and assign categories to each group. This method helps create or refine the information architecture of a site by exposing the mental models of the users.

Surveys

A poll that is triggered while using a site or application.

Email surveys

A survey that recruits participants from an email message.

The most widespread methods in marketing have so far been attitude-specific, as they tend to tell something about customers and their attitude towards the brand and the product.

The right mix for growth marketers

Every growth marketer should at least work with the following analysis methods: web analytics, usability testing, expert-based evaluation, A / B testing.

1. Web Analytics

Potential problem areas can be identified in the tracking tool using the drop-out numbers. The sites with the highest bounce rate are always sites where you are losing customers.

2. Usability testing / expert-based evaluation

Use usability tests or expert-based evaluations to find out why your users are leaving these pages. Earn Pain Points and Gains Hypotheses to build. Test with users who match your personas. Create personas from the testers, in order to be able to address your target group more precisely.

3. A / B testing

Test yours Hypotheses with A / B and multivariate tests in which you work with designers, UX experts, copywriters and marketing professionals to run user-relevant changes in the design against each other.

Use Prioritization methods for conversion tests like PIE / ICE.

Check these again with Web analyticswhich variants which Uplift bring.

4. Automated Testing and Test Frameworks

Use Marketing Automation Toolsthat automatically adjust your A / B test. Systematically increase your experiment velocity.

Which UX methods you use for which goal

There is a method for each goal:

UX methods according to goals and approaches

Most companies currently use test methods to assess performance. The optimization usually starts much earlier. The analysisbefore something needs to be improved is less effort and less coststhan to discard all adjustments afterwards or to have expensive modifications.

Conclusion

What so far Conversion decade was, is now developing into Loyalty and Retention Decade. Although this leads to the use of wide-ranging UX methods, it is the only way to set yourself apart from the competition and to become an innovation leader. The next generation may have other needs that you want to know and understand.

The ROI relates to two numbers: the return (e.g. the optimization) and the investment (e.g. the budget). If both are less affordable, the ROI invariably goes down.

With this formula, UX optimization can be a better solution for ROI uplift and thus a factor for sustainable growth.

So far, the current ROI of UX is relatively large (10% spending, at 83% profit), which is an unbeatable argument for executives.

How do you use UX methods? Do you decide based on ROI? Which methods work best for you? I look forward to your feedback, questions, and comments. Gladly as a comment or here.