Why You Should Prioritize UX and When to Outsource It

Jun 29, 2021 1:42:09 PM

UX is a key consideration for any business. It’s literally how our users experience our products and services, so unsurprisingly it’s also what they tend to judge us on. It’s also the biggest single lever most companies can pull to affect revenue, profits and growth.

In this post we’ll look at reasons to put UX first, and why it’s often a good idea to outsource UX design.

Why focus on UX?

UX isn’t a feature. It’s how your users experience all your features. It’s probably the single most crucial factor you can focus on at any stage of development as a service, or growth as a company. And more than anything — price, product, any other element of your offering — UX is the key competitive battleground.

Investing in UX delivers ROI well in excess of other avenues: companies with $1bn in revenue can expect to generate an additional $700 million through UX redesigns. In particular, improved UX can deliver more sales to better customers, with lower costs, lower churn, and higher revenue and profitability.

More sales

When Continental Office, a customized workplace solution provider, updated its website, the focus was on engaging user experience backed by relevant content marketing. The result was a 103% increase in traffic year-on-year, and a 645% increase in net-new contacts.

Even more important than these already impressive numbers is the fact that they continued to rise. Rachel Iannarino, Continental’s Vice President, Marketing told Marketing Sherpa: ‘the number of new contacts is up over 80% from last year already… I keep waiting for these numbers to kind of plateau, but fortunately for us, the results just keep trending in a positive way.’

UX helped drive the kind of leap in sales for Continental that few sales strategies could hope to emulate. And its ROI continues long after the initial spend on redesign is complete.

Better customers

When you build your site, app or other tools around user experience first, you’re matching that experience with the value that your ideal users want. Ideal customers are worth a lot more than the average customer. It’s common to reference Pareto at this point, but for many businesses the disparity between your very best customers and everyone else may actually be greater than 80/20.

your best customers are worth more

Here, 41% of revenue is coming from just 8% of customers, making each top-performing customer worth 3.4X as much as the average. - Source

This isn’t just repeat purchases — though repeat customers spend up to 67% more than new ones; it’s higher purchase value. The best customers you have make more transactions, spend more per transaction, and encourage transactions from others by word of mouth. If you’re a SaaS business, look at the customers you’re helping grow the fastest — companies on your premium plan who keep adding seats and requesting new features.

These customers might not come to you for your user experience. But deciding to give you their business long term is definitely a UX-influenced decision:

the cost of hard to use software

Source

Lower churn

Churning customers are the biggest hole in the revenue bucket for many SaaS companies. When customers leave your business, they take future recurring revenue with them. They also take with them the cost of acquiring them as a customer, and the future cost of acquiring customers to replace them. This is how SaaS companies can have plenty of customers, high revenue, and still be unprofitable.

new customer bookings vs customer churn

Source

The number one reason for customer churn is user experience. Poorer user experience translates to exponentially increased churn, which sounds like bad news but is actually good: improve UX even slightly and you can see major changes on the bottom line.

A 1% decrease in churn can yield a 12% improvement in company valuation in five years; when GrooveHQ improved customer retention by 5%, profits rose 95%.

Lower costs

Great UX lowers the costs associated with supporting customers. When your UX is good, users can see the path to value for themselves. They don’t need to open support tickets, contact customer success, consult an extensive knowledge base, or chase after them with retargeting and churn reduction strategies. While these can sometimes be difficult to price, call centers report costing time at about $1 per minute per customer, which obviously has the potential to spiral rapidly.

Depending on your offering, you may never be able to do without those things entirely. But every customer who doesn’t have to rely on those resources, or who needs them less, saves your business money.

Investment in UX at the development stage delivers a constant return in operation. This is true for both consumers, and business end-users. In 2021, an electricity company that updated and improved useability of its customer information system reported savings of between $300,000 and $3 million.

More revenue, with higher profitability

In consumer-oriented businesses, the differences can be massive. When clothing retailer, Anthropologie implemented a UX redesign that made its checkout process easier, sales jumped 24%.

Large businesses can experience even more significant gains. When General Electric, at the time the world’s 14th-largest software developer by revenue, invested in a common software platform across the whole company, productivity rose 100% across development teams and the company saved $30 million in the first year.

Better UX in consumer-facing businesses can expect greater jumps in direct per-customer revenue, with higher price points experiencing this effect more strongly. In the luxury and indulgence goods markets, consumers were willing to pay a price premium of up to 18% on the basis of user experience.

Sounds great. Why outsource?

The benefits of shifting focus to UX are clear. But why can’t you just do this in-house? You can, of course. But in-house teams often don’t have the specialized UX expertise to make the right design decisions. This isn’t something non-specialized designers are likely to excel at. Some companies should work with an in-house team, even if they have to build it from scratch. But for many, outsourcing UX design is a better approach.

Expertise

User expectations of UX are high, and climbing. Business and consumer users expect intuitive UX, immediate support and a seamless experience, and they punish companies who fail to provide it by leaving. (Many will not complain first.)

Yet, few in-house design teams have the UX specialization to deliver. Building such a team is a specialized endeavor, one that many businesses don’t have the budget or time to perform.

One of the reasons UX redesigns reap such huge rewards for companies that execute them well is that most companies fail to meet customer requirements. Many redesigns never get off the ground at all. Don’t join them. If you don’t have a team with high-level, UX-specific expertise, outsourcing is the best choice.

Objectivity

In-house teams often feel beholden to the company’s vision, mission and values, even if they don’t feel overawed by the C suite. When everyone’s drinking the Kool-Aid, or no one wants to say no to the boss, bad decisions get made. And groupthink sets in, even in the most open-minded organizations.

UX consultancies don’t share that problem. Does that mean they won’t get your vision? Sometimes. But experienced consultancies know how important it is to grasp who you are as a business and who your clients are. They don’t treat every customer as if they’re the same. (If they seem to, that’s a warning sign.) They can also act as a buffer between teams where corporate dynamics could otherwise interfere in the process.

Outsourcing UX means you get experts who will say no to you without fear, meaning you can get help avoiding costly mistakes just because you like them — even though your users don’t.

Scalability

UX workloads fluctuate massively. If you’re planning to restructure your business’s assets around improved UX, you’re going to need some serious time commitment from experienced professionals. But after you’re done rebuilding your website and app, there’s often little input required from UX teams.

This has obvious implications — building an in-house UX team makes sense if you’re going to continue to derive value from them, but if your UX workload is ‘front-loaded,’ with a couple of major tasks and then minimal continuing requirements, you might be better served by an outsourced team.

In addition, if you’re trying to scale fast and you don’t have a ton of budget and other resources, an outsourced UX team that has worked with clients in your position before can help you get the most effect for the least outlay, including things like with UX factors to concentrate on first and doing UX for MVPs.

Takeaways

  • UX redesigns can deliver startling improvements in key metrics ranging from revenue to retention
  • Reorienting your business around UX and redesigning key assets to match delivers long-term ROI, continuing to pay off long after you finish paying for it
  • Outsourcing UX design should mean working with an experienced team that knows how to get you what you want
  • Expertise is key: if you have an in-house team, or it makes sense to build one, they might deliver the best results. But if doing that doesn’t add up for your business, outsourcing lets you access that expertise when you need it.
Featured Image Credit
Brian Geary

Written by Brian Geary

Brian is a true believer in the Agile process. He often assists the development process by performing the product owner role. In addition to his technical background, he is an experienced account manager with a background in design and marketing.

Get in touch

LET’S BUILD SOMETHING AWESOME. TOGETHER.