How to Calculate Design ROI

It’s widely known that design-forward companies perform better than their counterparts, generating nearly 32% more revenue than companies where design takes a backseat. But why? The direct correlation between UX and revenue generation still isn’t clear to most executives. Here are some tips that will help you effectively communicate the importance of your design work to company success:

1) Connect Metrics and Key Performance Indicators

During the design planning process, it’s important to select measurable goals and metrics against which marketing or executive teams can assess the impact of your design work. Final design concepts can be established during the wire-framing and prototyping phases.

Metrics can range from surveys (satisfaction ratings), analytics (new accounts, returning visitors, conversion rates, rate of error), usability testing (success rate, timing) and customer support (tickets, calls, complaints). You’ll need to track changes in the selected metric before and after implementing a design change. For example, will adding a live chat feature decrease the number of complaints customer support receives? 

Then you’ll need to select a KPI that relates to the chosen metric — a few examples include profit, cost, customer lifetime value and employee turnover rate — and turn the value of your design work into a monetary number. If the live chat feature decreases customer complaints, how much will that increase customer lifetime value? The Nielsen Norman Group explains this conversion process in detail. 

2) Create a Profit Tree

Putting together a diagram of the company’s profit and highlighting where and how design contributes to monetary value is a great way to present information visually to executives. It’s important to follow-up such a visual with data and statistics, such as those mentioned in the previous point.   

3) Get Leadership and Other Departments Involved

The more involved C-Suite level executives are with the design and ideation processes, the better they’ll understand the connection between UX and financial success, and more importantly, how to further drive profits through design. It’s for this reason that companies are beginning to hire Chief Design Officers. Even if there’s no such role at your organization, it’s important to make design more of a cross-functional process. The more other departments also incorporate a user-centric view into their work, the stronger company performance will be overall.

4) Be Specific About What You Measure

It’s important to realize that not all aspects of design have a significant financial impact — selecting and altering colors and fonts for example, won’t change the user experience nearly as much as changing the layout of a website would, so for most companies, the impact of the former wouldn’t be worth measuring.

If every part of the design process is dissected for financial value, then it takes away from time actually spent designing. So just as necessary as it is to set metrics and track the impact of your design work, it’s even more important to decide what exactly you want to measure. 

UX is an integral part of customer relationship-building and company success — let us know in the comments if these tips help you turn the more abstract parts of design into concrete ROI.