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July 7, 2022

Why UX Research Matters (More than Ever) During a Downturn

Did you know $1.4 trillion is lost every year due to poor UX? That translates into $1 million of spending for your company every day for 3,000 years.

Imagine what that extra money could do for your company and how it could prepare you to thrive during times of uncertainty.

That’s why UX research is so critical to a company’s success, especially during a downturn.

UX Researchers Need to Prove Measurable Value in a Downturn

Here’s the issue: UX researchers often measure their impact through customer happiness or likelihood to use a feature. But that’s not what drives shareholder value and, in a downturn, driving value is critical.

Shareholders want to see return on equity (ROE), which is net operating income divided by costs. To keep it simple, ROE is used to gauge a company’s profitability, and a higher ROE translates into a company that is more likely to generate a profit. Higher ROE = a good sign for shareholders.

To continue driving their work forward, researchers and product teams must quantify the monetary value of their research on a company’s success and revenue, especially when resources are being scrutinized. Subjective metrics, while helpful in striking an emotional chord with stakeholders, aren’t enough to demonstrate this value.

Thankfully, there’s now data that shows how strong UX and UX research can impact a company's bottom line. Claudia Natasia, Director of UX Research at Highspot, has a background in both UX research and Economics, with an MBA from Berkeley. Utilizing the ROE equation above, she breaks down the impact of UX with two specific examples.

Poor UX Leads to Staggering Invisible Liabilities

The first company she examined aimed to reduce call center expenses. Despite call center volume reduction in year one, their volume and costs skyrocketed in year two.

The UX team found the call center volume was driven by 3 major UX issues, which led to an average of 5 repeat calls of 30 minutes each at $1/minute per call. This added up to a jaw dropping $225,000 loss due to the increased volume. Because they ignored UX, this company suffered a huge invisible liability.

If your organization is facing economic uncertainty, invisible liabilities are unexpected loss you can’t afford — especially if an investment in UX earlier could have mitigated it.

ux during downtown - lean research methods

In both of these examples, you see that when research is focused on measurable metrics beyond subjective customer satisfaction, it becomes a crucial component in moving a company forward. And that’s even more critical when facing an economic downturn or a looming recession.

User Experience is the Primary Driver of Net Promoter Score (NPS)

She next examined an organization whose NPS score sat at 40 — a decent score, especially when you consider revenue grows 1% for every 7% rise of a company’s NPS (according to a London School of Economics’ study). The company hoped to grow the number of enthusiastic promoters of their product who would advocate for and serve as organic ambassadors.

When looking at what drove NPS scores, UX issues were the #1 statistically significant driver. That means not investing in UX would drastically drop promoters to detractors and lead to revenue destruction.

ux impact on nps score - research nps score

Taking Action: 3 Steps to Make Your UX Research Practice Leaner & More Effective During a Downturn

During downturns, it’s not enough to passively wait for research requests to roll in. You need actionable strategies and tactics to help your team stay focused, efficient, and on track.

Here’s a simple 3-step framework that can get you started.

  1. Prioritization: How can we determine what projects we should focus on?

  2. De-risk Decision Making: How can we make every decision research-informed?

  3. Be Proactive: How can we make sure our customers’ needs come to the forefront?

Let’s walk through how you’ll put these into action.

1. Improve Prioritization

When times are uncertain, you likely won’t have extra budget or resources to allocate to projects with low ROI. And you may have limited stakeholder attention, so you need to maximize the impact of your research and get to insights faster.

You’ll want to be relentless with your prioritization, and that means focusing on the projects that can have the biggest impact with the least amount of effort.

Here are a few tips when thinking about how to prioritize:

  • Focus on the core user experience (it’s the lifeblood of your business and other initiatives will be less successful if it’s performing poorly)

  • Be adaptable and flexible when things don’t go as planned. Projects will shift due to market conditions so be prepared and willing to adapt.

  • Keep a pulse on changing company goals by reading company communications. Meet with leadership about how those changes impact you.

And most, importantly, you need to choose the right projects to focus on.

Acquisition, onboarding, engagement, and retention are typically the areas where you can make the biggest impact on revenue and costs. When you acquire more customers and influence improved onboarding flows, you can quickly impact important metrics like CAC, new daily or monthly users, and newly activated users.

By improving engagement, you can keep important KPIs like DAU (daily active users) and MAU (monthly active users) on track while also impacting churn, because low engagement can be an early indicator for churn.

Lastly, and not surprisingly, focusing on retention is critical to prevent a leaky bucket.

You might be thinking, “critical flows like onboarding and acquisition are often the most difficult to research and fix.” While that is true, in-context research, which lets you ask questions while users are experiencing your product in real-time, makes this type of high impact research possible.

2. Derisk Decisions

Now that you can more effectively prioritize your workload, the next step is to look at your individual projects to ensure you’re using research to derisk as many business decisions as possible. Because as we all know, the more research-informed those decisions are, the less likely they are to flop or result in negative business impact.

Here are a few tips for optimizing both tactical and strategic projects to ensure you’re getting the most bang for your buck:

tactical v strategic research

Tactical Research

  • Conduct rolling, weekly qualitative sessions: Setting up the infrastructure for repeatable research sessions can take less time than recruiting for one-off sessions, and provide a constant stream of insights you would not otherwise get.

  • Consider more unmoderated testing: Easily assess concepts your team is considering or test usability of a feature with unmoderated testing. You’ll save time on conducting sessions and can instead focus on other projects and priorities.

  • Use in-context (also known as in-product) surveys: Gain quick answers using in-context surveys to learn from users in real time, as they experience your product. For example, if you just launched a new feature, you can set up a survey to learn why people are or aren’t using it, or you can use continuous UX measurement for benchmarking or tracking. Then, ask survey takers if it’s okay to follow-up — this helps you recruit users for later qualitative research projects.

Strategic Research

  • Scope projects tightly: Hone in on the most important questions you need to answer and don’t allow scope creep to extend timelines.

  • Don’t make perfect the enemy of good: Focus on how you can get to being confident (enough) in a decision without having to spend more hours, money, or resources on getting to perfect.

  • Stay connected to company priorities: Involving stakeholders in the research journey helps research remain integral to company decisions. And gives everyone across the organization a sense of investment in the outcome.

Lastly, leveraging multiple sources of information and triangulating your data across tactical and strategic studies can help you draw more insights without doing additional work. Be extra diligent in using the data and resources you already have. Revisit older projects, compare those insights across different studies to expedite the research process and help stakeholders feel more confident in the data you are presenting. You don’t need to constantly reinvent the wheel and academic insights can help add validity to your work when you approach colleagues.

3. Be Proactive

The last step in the framework helps you take a user-first (vs. business-first) approach to generating insights. To keep a pulse on the customer, you have to anticipate early warning signs for churn. When the business landscape is volatile, this becomes even more critical.

It’s best not to wait until a problem arises to set up a continuous UX measurement program. By running a few high impact in-product surveys in your product your team can be proactive rather than reactive and surface issues customers are experiencing (that your team did not know about) or other general insights that were not on your roadmap—all without disrupting the user experience.

Wrapping up: How to Show Impact & Make an Impact During a Downturn

Efficient. Impactful. Connected. Aim to make the user research you conduct check all three boxes during an economic downturn. Prioritizing, reducing risk, and getting ahead of issues are nonnegotiable when crafting and prioritizing lean UX research methods.

Demonstrating measurable impact that shows investors and colleagues clear ROE makes the case for your place at the table. And by ensuring stakeholders are connected and involved, you will help them see firsthand why research is always critical to product management.

Limited resources don’t have to mean limited research. It just means you have to work smarter to make an impact.

Want to watch the Role of User Research in a Downturn webinar in its entirety? Tune in on-demand here.

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