< back to Blog

Has there ever been a better time to invest in your customers?

Right now across a number of industries it's becoming increasingly difficult to find new business and acquire new customers. Common sense sales practices suggest that at times like these it’s more important than ever to invest in your existing customers, whilst being patient and resilient in your pursuit of continuing to invest in acquiring new customers or business.

I for one, am getting spammed and sold to more than ever, and from all corners of the globe. Every day I’m getting invites to webinars from companies I’ve never heard of, or I’m asked to fill in my details to access another ‘groundbreaking’ study that has just surfaced from an unknown entity out of nowhere, or I’m being asked to connect to another new and unheard-of business on LinkedIn that promises to miraculously solve all my problems.

For me, right now is not a time when I’m likely to start a new sales cycle or relationship with an unknown business or brand that is just mass marketing to me. I’m far more likely to double down on supporting and working with the businesses and brands that I’ve built a relationship with or have followed over time, and who I know have invested in creating a great customer experience. An experience that tells me they are in it for the long-haul and will value my business (however big or small) as a long-term partnership.

As a business owner though, with responsibility for sales, marketing and customer experience, I know the sales cycle can never stop, and more importantly, neither can the investment in our existing customers and business relationships. But how do we convince ourselves right now, to keep investing in customer experience? How easy is it to prove that spending and investing in your customer’s experience will actually reap the rewards of a solid return on investment (ROI) for your business?

This challenge got me thinking back to 2009, amidst a post-global financial crisis (GFC) period when I was working for a leading design consultancy in the UK. We’d previously been completing multiple design and customer experience projects using human-centred design (HCD) methods. HCD had been the cool new kid on the block and clients were happy for us to engage with them, but then post-GFC some of our more established clients were starting to ask “are we actually seeing a commercial return on investment with this HCD stuff?”. It was still quite hard to justify and point to actual evidence at the time, but we pulled together a short paper that highlighted a number of benefits from using HCD. These included:

  • Increased user productivity
  • Increased sales
  • Decreased user errors
  • Decreased training costs
  • Decreased user support
  • Decreased customer support costs
  • Reduced cost of providing training (where relevant)
  • Time, effort and cost savings gained from making changes earlier in the design life cycle and before going into development

The Nielsen Norman Group was one of the first (and only) organisations to publish ROI findings at the time; mostly from a usability perspective.

Nielsen Norman Group’s (NNG) ‘Usability Return on Investment Report’ (now in its 4th Edition) was the last time I really sat down to properly look at industry published data in this area. They conducted a survey of ROI metrics arising from improvements in online usability and the wider user experience. The survey aggregated case study data from organisations across a range of sectors. These included organisations such as Eurostar, Microsoft, Capital One, IBM, Macy’s and MasterCard. Organisations following user experience improvement programmes showed a 131% improvement across web programmes measuring sales conversion, traffic/visitor count, user performance and feature use.

Macy’s were also cited as seeing an increase of 150% in online sales conversion following a redesign of their eCommerce site that prioritised usability improvements.

But all this information was now pretty outdated and forced me to search for newer sources that I might be able to share with clients having similar challenges right now to what we saw post-GFC. That being; how do we convince the board and management to invest in these customer experience design initiatives?

One of the most recent resources I found was from December 2016 from the Design Value Index Study (sponsored by the Design Management Institute) which found that a portfolio of design-centric companies outperformed the S&P Index by 211% from 2005 – 2015.

design-value-index

But perhaps the most recent study I came across was the McKinsey October 2018 report – The business value of design.

They tracked the design practices of 300 publicly listed companies over a five-year period, interviewing senior business and design leaders. The team gathered more than two million pieces of financial data and recorded more than 100,000 design actions. From all this, they uncovered 12 actions showing the greatest correlation with improved financial performance and grouped these actions into four broad themes.

These four themes (analytical leadership, cross-functional talent, continuous iteration, user experience) of good design are the foundation of the McKinsey Design Index (MDI), which rates companies by how strong they are at design and, more importantly, how that actually relates to actual financial performance.

Companies with the top-quartile MDI scores outperformed industry-benchmark growth by as much as two to one, increasing their revenues and total returns significantly faster than their counterparts.

growth-chart

So on the face value of these insights, every company should be baking HCD into solving their business problems, building their products and as part of their digital transformation programmes. Not only will this result in significant ROI in terms of true financial business performance, but other tangible outcomes include:

  • Reduced development costs, mitigating the risk of big software development failures
  • Ability for teams to get the right solution to market, faster
  • Ability to turn highly complex problems into more manageable and actionable solutions
  • Better alignment, through collaboration and problem solving
  • A framework for repeatable innovation

Now is perhaps a better time than ever to really look at shifting the focus of your business to being customer centric. The evidence is right here in the aforementioned sources - practicing customer centricity through HCD methods positively delivers and increases your profitability.

To do this, you need to understand how your UX metrics connect to your business goals. By identifying, understanding and prioritising your existing customers you can start to align their needs to your business outcomes. This is a crucial step in identifying your own measures, enabling you to track and evaluate the impacts of your efforts. Many businesses should make time to pause, take stock, and reflect on these points to ensure they’re charting the right courses of action. And if this is all new to you - there’s lots of real stories outlined here to demonstrate the value of HCD as a better way of doing business.

If you’re interested in finding out more about human-centred design and how it can help your organisation, get in touch with us.

Sign up and stay in the loop!

Your email address

No spam and no sharing of your details. Just useful thoughts and ideas in your inbox. :)