How to measure the ROI of UX (and get more money from your efforts)

Being able to demonstrate the ROI of UX is powerful.

If you aren’t tracking the ROI of your UX efforts, how do you know which changes are bringing money into your business? And, perhaps more importantly, how do you know what is detracting from your bottom line?

The answer lies in measuring the business value of UX.

You need to be able to tie your user experience activities back to business objectives and see which site elements, pages and components drive results for your business. Knowing how to improve your site design, or even securing resources and budget for your design team, relies heavily on understanding the ROI of UX.

By measuring the ROI of UX, you can quantify your current user experience efforts and make smart decisions about future UX investments. Plus, it will help you win over stakeholders as you demonstrate how UX directly and indirectly impacts business profit.

11 metrics to measure the ROI of UX

Success is a numbers game. If you really want to know how your site is performing and how to increase its future success, you have to measure the progress you’ve made so far. You need to know what works, what doesn’t, and how those numbers match up to your business goals, priorities, and future plans.

Set goals for your UX and track performance with relevant key performance indicators (KPIs). Use insights from these KPIs to make informed decisions about your site design moving forwards.

Here are some UX KPIs you may want to track:

• Financial ROI

• Conversion rate

• Time on site

• Customer LTV

• Churn rate

• Average order value

• Cart abandonment rate

• Customer support cases

• User satisfaction

• User learnability

• Employee productivity & cost savings

I’ll cover each of these KPIs in more detail as I show how you can use them to measure the ROI of your user experience efforts.

But honestly, the metrics don’t stop there. There are hundreds of KPIs you could measure to determine the ROI of UX. The key is to measure the metrics that matter most for you. Choose the metrics that best align with your goals and take it from there.

Financial ROI

The most logical place to start is by calculating the financial ROI of UX.

There are several ways to calculate ROI. The easiest way to calculate ROI is to take your net profit and divide it by the total cost of the investment.

If you want to calculate the ROI of UX, then the money spent on UX would be the Investment Cost. A positive ROI means your efforts have paid off and the investment gains (e.g. sales, revenue, profit…) outweigh the costs. A negative ROI, however, means the costs are greater than the returns. Obviously, we want to avoid a negative ROI.

Keeping a close eye on the ROI of UX lets you know if your UX efforts are positively contributing to your bottom line, or if you need to tweak your UX strategy.

Conversion rate

Conversion rate refers to the percentage of website visitors or app users who take a “desired action”. This “desired action” could be anything from newsletter sign-ups to online sales.

Measuring conversion rate is a great way to understand the ROI of UX. Calculate conversion rate by dividing the total number of people who take the desired action by the total website visitors then multiplying that number by 100.

I recommend capturing conversion rate before and after UX investments so you can see how it has changed. Keep comparisons fair by comparing like-to-like time periods such as Q1 2022 versus Q1 2021.

A/B testing UX changes and measuring the conversion rate for each variant is another great way to see which exact UX changes improve conversions.

Time on site

How long people spend perusing your website could be a sign they’re a big fan of what you do.

If someone visits your site and leaves 0.01 seconds later, chances are they don’t like what they see. But if they spend a few minutes exploring your site, visiting pages, and progressing through the customer journey, you’ve got yourself a winner.

There’s no quick formula for measuring time on site. Instead, you’ll need to use a website analytics tool (such as Plausible) to see how long visitors spend on your site. These analytics tools start a timestamp when users start a new session on your site. The timestamp will stop when they exit the session. You can track users time on site or time on page if you want to drill down to the performance of individual pages.

With that said, time on site can be a tricky metric to measure so take it with a grain of salt. A short session duration isn’t necessarily a bad thing. Reducing time on site could mean your UX changes make it easier for people to find what they’re looking for. Pair quantitative time on site metrics with qualitative analysis and other KPIs to really understand what time on site is telling you about UX.

Customer LTV

Customer LTV, or Customer Lifetime Value, indicates the “worth” of a customer throughout their lifespan. Measuring customer LTV helps you maximise the value of every individual customer so you can maintain customer relationships and encourage them to stick around for longer.

Customer LTV is particularly important for SaaS or eCommerce businesses that rely on having strong customer retention.

Before measuring customer LTV, you need to calculate the customer value and average customer lifespan.

To find the value of your customers, calculate the average purchase value (AKA how much customers spend in an average order) then multiply that number by the average frequency rate at which customers purchase.

As for the average customer lifespan, take the average number of years a customer is active and divide that number by the total number of customers.

Once you’ve worked out these figures, use them to calculate the Customer LTV by multiplying the customer value by the average customer lifespan.

From a UX perspective, measuring customer LTV before and after UX changes will show how you are improving user experience throughout the entire customer relationship.

If you want to improve customer retention, focus on delivering an outstanding user experience. A stronger customer LTV will naturally follow better user experience and customer retention.

Churn rate

Churn rate is the percentage of customers who stop using your product or services.

For eCommerce businesses, churn rate might refer to the number of active customers you have at a given time. Meanwhile, SaaS companies may measure churn as the number of subscribers who cancel or don’t renew their subscription.

The easiest way to calculate churn is to subtract the number of users at the end of a set period from the users at the start of that period then divide that number by the total number of users at the start of the period.

Churn rate helps you understand the “stickiness” of your business. The lower your churn rate, the more customers are sticking around. A high churn rate, however, could be a sign that customers aren’t satisfied with your products, services, or the user experience.

If you want to reduce churn, you need to focus on improving UX for existing customers. Make informed UX changes to components that existing customers will engage with, such as the user interface, customer-only features, and customer support, then measure the impact this has on your churn rate.

Average order value

Average order value (AOV) refers to how much money a customer typically spends when they make a purchase.

AOV is calculated by dividing the total revenue over a set period by the total number of orders during that period.

I recommend measuring AOV on an annual, quarterly, or monthly basis so you can see how the order value changes over time — as opposed to measuring AOV daily where it can fluctuate greatly from one day to the next.

Offering a great user experience could increase the average order value by encouraging customers to purchase more services or products together. If you want to increase average order value, focus on improving the UX of sales pages and making it easier for website visitors to complete their purchase.

Cart abandonment rate

Cart abandonment rate is, quite simply, the percentage of online shopping carts that go unpurchased.

Every eCommerce business will know the pain of customers adding items to their online shopping cart then never purchasing them. There are numerous reasons why this might happen…

People might:

• use the cart to save items for later purchase

• get distracted mid-shopping

• run into problems when trying to check out

• be turned off by unexpected shipping costs

• Want to compare prices with competitor sites

Understanding what causes cart abandonment is key to preventing it.

Calculate cart abandonment rate by dividing the total number of completed transactions by the number of initiated sales (adds to basket) then multiply by 100.

If you make UX changes that focus on addressing cart issues or improving customer purchase journey, make sure you are measuring the cart abandonment rate so you can see how your changes influence cart abandonment.

Customer support cases

If customers have to reach out to customer service, it’s often a reflection on their user experience. Something has gone wrong and they now need someone to help them fix things.

The impact of UX on customer support cases can be measured by comparing the number of support cases before and after UX changes have been made.

Reducing the number of customer support cases could be a sure sign that UX changes have had a positive impact.

To reduce customer support cases, understand how to improve the customer journey, reduce frustrations and improve the overall customer experience.

User satisfaction

Not all metrics can be measured with a fancy analytics tool. Sometimes, the best way to find out what is working is to speak with your audience.

A user satisfaction score measures how satisfied users are when interacting with your website or app. There are a few ways to measure user satisfaction.

You could, for example, use a Net Promoter Score.

Net Promoter Score is measured using a simple survey question:

Customers rate their answer on a scale of 0 - 10. This metric determines the percentage of users who are “promoters” (those who score 9 or 10), “passive” users (those who score 6 or 7), or “detractors” of your brand (those who score 0 to 6). From here, you can gauge how many users are satisfied with their online experience.

Alternatively, you could collect user feedback through online surveys and interviews to understand user satisfaction on a deeper level.

Calculating user satisfaction requires a lot more hands-on work. But, in a world of user experience, it’s worth having a pulse on user happiness levels.

User learnability

Learnability is one of the five components of usability. User learnability assesses how easy it is for people to complete tasks the first time they interact with a product or service.

Monitoring user learnability is crucial for businesses with complex applications, systems, or interfaces that users frequently interact with. Understanding how easily users can complete tasks with your online systems can help you improve usability.

User learnability can be measured using a learning curve. This learning curve should plot the average time taken to complete basic tasks before and after UX changes have been made. The UX changes implemented should improve learnability, leading to a decrease in time taken to complete the task.

Employee productivity & cost savings

Last but not least, let’s not forget about your employees. Measuring employee productivity and cost savings will help you prioritise user experience changes that improve employee performance.

Improving user experience for your employees could translate into increased productivity and reduced costs. Divide employee output by input before and after making UX changes to calculate what impact your UX efforts have had on employee productivity.

To measure employee cost savings, multiply the time saved (at employee cost) by the total number of employees.

Measuring the impact of UX on your employees is just as important as measuring its impact on your customers. Focus on improving the employee experience (EX) if you want to reduce behind-the-scenes costs, improve productivity, and invest in your team’s satisfaction.

Final thoughts on measuring the ROI of UX

To understand the business value of UX, you need to measure it.

Whenever you make changes to your website or app, monitor its impact. Data is the best way to understand what does and doesn’t work. But remember, you have to first understand which KPIs matter most for your business. Track the KPIs that best align with your goals and focus on continually improving UX over time.

I really like this UX insights hub by Human Factors for measuring the ROI of UX. It has some great online calculators you can use to easily measure various UX metrics.