Where's the Value? Return on User Experience (ROUX).

Posted by Rachel Defriend on May 5th, 2009 at 12:00 am

Everyone wants to know the return on everything these days, so it was inevitable we'd start hearing a lot about Return on User Experience (ROUX). The problem is most people try to put this into highly complex Einstein-esque formulas that frankly make my brain ache.

As a User Experience Architect, my job is to simplify (from the perspective of the user, anyway). What is it we're really trying to show with ROUX? Is there a way to pinpoint a value to the user's experience? Let's start with a comparable concept we all know and love: ROI.

Return on investment is used to evaluate the efficiency of return on any expenditure of money. To calculate ROI, you divide the benefit (return) of an investment by the cost of the investment. The result is expressed as a percentage or a ratio.

What might a similar ratio look like for ROUX?

 Value means money
The benefit or return that interests us is based on the action taken by the user during or after interacting with our website. To be worth anything, improved user experience should result in greater monetary value from user action. (We are, after all, in this for the money.)

We therefore need to know three things to be able to calculate ROUX:

1.    The value of user actions taken before a site has been optimized for UX (this is the business-as-usual response we're trying to improve).
2.    The value of user actions taken after UX design (UXD) has been applied.
3.    The cost of the UXD.

Let's say 100 people visit your site in any given week, and 20 of them buy something worth $10 each to you. That means their actions are worth $200 to you each week.

Now let's say we apply UXD and discover that 20 percent of your visitors seem to be abandoning your site because they're frustrated. We fix that frustration, and, sure enough, 40 of every 100 visitors start buying something. So now their actions are worth $400 to you.

Finally, we need to know how much the UXD work cost you. Just to keep it simple, let's say it was $100 (you got a deal, man!).

Just looking it over, we know we earned $200 more dollars (in just one week!), and that it cost us $100. So our ROUX for that week alone is 2:1. If you figure that one UXD fix will have the same improved results for the year, then you've gotten a humongous annual return on your investment — better than 100:1!

In equation form for you Einstein-heads, it looks like this:

ROUX=[(value after UXD improvements)–(value before UXD improvements)]/(UXD costs)

Okay, my brain's starting to ache again. The real lesson we're trying to learn here is how to value user experience.

 The cost of poor user experience
It helps to look at it from the opposite direction as well. What causes value to go down?

Jared Spool has a great approach to ROUX that he calls the Cost of Frustration. His idea focuses on the user's "friction" when interacting with a site or device. The more friction a user encounters, the more frustration they have. And the cost of that frustration increases expenses, reduces revenues and productivity, and wastes development time.

For example, if a user can't find what he is looking for, he's experiencing friction, which leads to frustration and ultimately abandonment. This user could bail from your service altogether or switch to another customer service channel (such as the call center). This increases costs to the call center and means development of the online channel was at least partially wasted.

Friction isn't just limited to external customers; it also pertains to the tools your company has built for employees as well. If it takes an employee longer than needed to find critical pieces of information or complete a task, this costs the company in inefficiencies and lack of productivity.

Okay, enough of this. We've defined it already. Einstein can have his equations back, and I'll go put an icepack on my poor brain. Now that we know what it is and how to measure it, the fun part begins — actually cooking up the improved ROUX. I'll have a lot more to say on that. With no equations. I promise.

Rachel DeFriend is User Experience Architect for Javelin Direct.

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