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How UX impacts a company’s financial performance [study]

(Tech News) User Experience (UX) is more than just a geek term, it is something that can actually impact your company’s financial performance, and this study of stocks backs this theory up.

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UX investments earn a huge return

Charlie Claxton is chief creative strategist for UpTop, a full-service, web-based software application design firm that focuses on user experience design, conversion and mobile. He has led successful design efforts for Expedia, Amazon and Microsoft as well as growing early-stage companies and is a frequent speaker on user experience (UX) design and conversion.

Claxton recently shared with us data revealing that every $1 invested in UX yields a $2 to $100 return, a stunning statistic that makes one pause and consider their own brand’s UX. But now that you know that, how do you get your boss (or even yourself) to pull the trigger on that investment? In his own words below, Claxton offers an entire case study:

Looking for ammo to back up that investment in UX design?

Then take a moment with the story of the UX Fund, a year-long experiment in 2006 that inevitably comes up when the UX crowd talks about the value and importance of great user experience design.

The premise behind the UX Fund experiment is simple: companies that deliver a great user experience will see it reflected in their stock price.

Two UX designers, Geoff Teehan and Jon Lax, tracked 10 companies in their UX Fund and invested $50,000 in the fund. The companies, which included Apple, Target, Electronic Arts, Research in Motion (RIM), Progressive Insurance and JetBlue Airways, among others, shared some of the following attributes:

  • A demonstrated care in the design of their products and Web site.
  • A history of innovation and inspiring loyalty in their customer base.
  • A track record of customers having positive experiences to do business with them.

After a year, Teehan and Lax found that the fund grew 39.3 percent growth, beating out all of the major indices. Of course, it’s not a straightforward numbers game, and Teehan and Lax acknowledged that a number of underlying factors – some in their favor, some not – affected the final outcome.

Result: UX actually impacts stocks

“It’s clear that the fund did well from a performance perspective, beating out all of the major indices,” they wrote the experiment’s summary. “However, that wasn’t the case during the entire hold. Up until September there was usually one index that was outperforming it. On two occasions the fund was actually in the red. It wasn’t [outperforming] until financial news or new product announcements from holdings like Apple, Google and RIM boosted its overall value nearly 30 percent in less than two months.

“Even though the impact that UX has on a company’s stock price is but one of many factors, we feel confident that (UX) was a major contributor to the fund’s success.” (Click here to read the entire post and see the UX fund graphs.) https://www.teehanlax.com/blog/ux-fund-matures-up-393/

So nearly a decade later, why does that matter?

In today’s world, UX firms talk a lot about delivering measurable payoffs that come with providing a seamless and attractive user experience. In other words, people who come to your site or use your app will find it attractive and easy/ pleasant to use. That’s good touchy-feely stuff, but what better payoff could a company ask for than increased revenues and improved bottom line?

Critics easily dismiss the UX Fund experiment, arguing that these companies’ inherent strengths influenced the fund’s results more heavily than UX design. But without great UX design, a company can’t provide a stellar customer experience and a poor customer experience definitely impacts financial performance.

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

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3 Comments

3 Comments

  1. Harry Meliss

    December 16, 2014 at 6:52 am

    Nice case study. And very well explained the how to guide for user experience designs.

    Thanks for the post. Keep posting Good work 🙂

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Tech News

How to launch an app in 48 hours

(TECHNOLOGY) Here is a comprehensive guide to setting up processes and automation to develop an iOS mobile app and a full marketing strategy behind it.

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The American Genius recently learned about a really fascinating group of people who created an app in 48 hours. We’ve all heard about hackathons, but they are typically code-only and void of any business or marketing plan, so this project caught our attention immediately. We asked digital strategist, Alex Leybovich to share their story with you, and in his own words below is the deep dive into how they accomplished this nearly unimaginable task:

One of the things that I love about working with creatives is the unfathomable progress we can make on a project when we point our collective energies in a single direction. Imagine what a team could accomplish if there were no expectations, no stakeholders, no managers, and no plan? Nine top marketing strategists gathered in Austin, TX – many meeting for the first time – to answer the question, “How can we build and launch an app in 48 hours?”

If you’ve spent any amount of time in the corporate world, you’re probably thinking, “I know how long it takes our marketing department to put a measly video on a website – what could they possibly accomplish in a weekend,” and prior to this event, I would have been in the same boat. Why wouldn’t I be – this sounds like an impending disaster about to erupt.

What was accomplished in a single weekend will leave you speechless.

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The standard progression of a new development team is Forming, Storming, Norming, and Performing. First, the balance in the team must be understood – who’s doing what, where does my lane end, and who’s in charge? Next, people start to butt heads and challenge the boundaries of their positions. Once these are figured out, for the most part, the team begins to rebalance, and, finally, the team starts to fire on all cylinders and is productive in the work that they’re putting out.

We only had 48 hours, so there wasn’t a lot of time to bring our egos along or get emotionally attached to anything that we were doing. To put everyone on the same level and get the team to the performing phase faster, we did something different than your stereotypical icebreaker.

The instructions were simple – when you introduce yourself, don’t talk about meaningless small talk. Stand up in front of the room, and give a 3-minute pitch on who you are and what you bring to the team as if you were presenting to potential investors.

In turn, everyone got a chance to impress the rest of the team, and, more importantly, we ended our first meeting with a clear understanding of who was an expert in what field, and who else could provide coverage for tasks if bottlenecks occurred at any point in the project.

Boom!

One hour into the event, and we already made it through forming, checked our egos at the door, skipped straight to norming, and CHICKEN was born.

What’s CHICKEN

CHICKEN is a video messaging service that allows users to communicate with each other directly using short video snippets, aimed at bridging the gap between text interaction and face-to-face encounters. Think video-based walkie-talkies where you can send short video snippets back and forth with messages that don’t expire.

Chickens are social creatures by nature, and communicate with each other throughout most of the day, seldom stopping except to sleep. The chicken quickly became our spirit animal as we put our heads together and designed an app that lets you talk to your friends all day long.

The First 24 Hours

Once introductions were out of the way, we needed to set some ground rules

  • First, we are building and launching in 48 hours – that means that whatever we have at the end of the weekend was going to go out, and the remaining ideas continued to live in the product backlog.
  • No bad ideas – everything about this was supposed to be fun, so leaving egos behind was a critical component to getting the job done. Every idea went in the backlog. Once we prioritized the tasks, groupings of ideas started forming into features.
  • Last, but certainly not least, be kind! We came together to do something fun, and boy did we ever! Catered lunches were served daily, and snacks and drinks were available throughout the day. In true Silicon Hills (is that what they’re calling Silicon Valley’s little brother, Austin?) fashion, our AirBnB turned into a startup office in minutes, complete with a ping pong table in the garage (it came with the AirBnB so how perfect is that?)

From there, we got straight to work.

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First thing’s first – Project Management. For this to be successful, we needed to follow a structure, so having a scrum master in the room (*waves*) proved fruitful! For 48 hours, we needed a Kanban board, and Jetbrain’s YouTrack is the fastest and most thorough way to get a project going and keep it on track.

Using Pressable as our hosting solution, we were able to launch our hosting environment and get WordPress up and running quickly. The site went up in a few hours. A clean, minimal look to promote app downloads.

Automation was the goal from the start, so we set up a Hubspot CRM, signed up with Proof, opened our MailChimp account, loaded Zapier, and added a WPMU suite onto our WordPress installation. To launch with a minimally viable product (MVP) all we needed for the website was a landing page, so while that was up our social media team got to work. We wanted eyeballs on us as early as possible, so as we rolled out features (SPOILER: by the time the event was over we had built a landing page, then a home page, then a website, then a custom mobile experience, then another version of the website) our audience could follow our journey and get hyped about what was coming.

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The response was remarkable! For a brief few hours, we felt the energy of the Austin startup community as they watched what we were building. Not only were they watching, but they were also providing real-time Analytics, data for our heatmaps, and feedback on bugs that they were seeing, so we were able to get live testing and QA from the community. Our first heatmaps (this image here) showed an unexpected rate of clicks on the mobile phone so we replaced the image in the next iteration to make it appear less like an interactive element.

Meanwhile, our branding team developed one of the most stunning color palettes that I could have imagined for an on-the-fly project and graced us with a beautiful logo.

launch an app as quickly as possible

After sitting down with our resident Subject Matter Expert (SME) and conducting our persona research, we identified our target audience. With trends like Tik Tok, Marco Polo, and Snapchat, we wanted to make sure to hit our audience quickly and capture their attention.

To our surprise, we found unexpected inspiration in 12-year-old Jordan (last name omitted for privacy). Originally brought in to be interviewed during our user research phase, she proved to know a lot about trends, design, and what features her generation expects in an app. By morning, she had drawn up her “perfect” app, and we had our first iteration – now on to testing her hypotheses! (For her efforts in helping with the project, Jordan was featured on the original landing page as part of the initial screenshots of the app!)

We sit down with our persona SME - Jordan - to discuss how her generation finds and adopts new apps

The first 24 hours flew by in no time, but we managed to make a significant amount of traction. The logo and branding package were ready for our review by mid-day, the app framework was complete, and the initial landing page was built and deployed. We added a fun countdown timer on the page, wrapped up day one – now for a break.

If any of you have ever been to a hackathon, you know that it’s non-stop adrenaline-fueled action, so when Stefan let us know that we were going to meditate in the middle of this event, we were shocked – but I will never do it any other way after this experience. For one hour, we turned our minds off, rested our bodies, and allowed our creative energies to roam free.

And then, we began the second half of the event.

Day 2: Crunch Time!

We had strong momentum coming into the start of the second day and, freshly regenerated after our meditation and chair massages, we got back to work.

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The first 24 hours were a lot of set up and creation, but now the pieces had to come together. The front-end, back-end, and APIs had to be merged, and we had a ticking timer counting down on the website reminding us of how few hours were left for us to button up all of the features on our board.

A clear picture of where we were headed came together on day two as the screenshots started to come together.

Seeing the app come to life got us fired up to push more visitors to the site.

Within the first 48 hours, we had gotten almost 1,000 page views on the brand new website – including 3 that came from organic search (I have never seen organic traffic to a website within 48 hours of an idea just beginning to form for a company). Why get visitors to the website though, if we’re not doing anything with them?

Enter – the prelaunch campaign. We gave visitors an opportunity to request a notification when the app was live and started our drip campaign. Every step we took to get closer to our goal, we got feedback from our first rounds of beta testers.

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We even got weird with our marketing efforts, at one point creating a Tinder account for the sole purpose of exposure to the site. Every new visitor was an opportunity to capture more data in order for us to have the best chance at a successful launch.

By the end of the day, we had a roadmap of new features for the future, including video transcription, and subtitle translation options to help users communicate with international peers.

What’s Next?

CHICKEN was a great experience for the team, and we decided to continue the project after the event. All 9 original members formed a Delaware C-corp and submitted the app for review. You can continue to track our journey or download the app for yourself (iOS only, at the moment) at https://speakchicken.com.

***

Alex Leybovich, PMI-ACP, CSM is an enterprise digital marketing strategist who specializes in conversion rate optimization (CRO), user experience (UX), and marketing automation. He puts his 14 years of web experience into running Auden Digital – a full-service marketing agency – in Austin, TX, advising veteran-owned businesses, consulting, and speaking.

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Retailers’ creepy tech hacks to get people to spend more

(TECH NEWS) Tech hacks or Jedi mind tricks? How retailers are getting sneaky about collecting your data, and how you can prevent it.

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Did you even know there are (creepy) ways retailers get all up in your private data to encourage people to spend?

Here at AG, we can’t help but think about how companies collect and employ data, and how they’re allowed to collect and employ said data, and well, let’s just say the fact that the Venn diagram on that one ain’t exactly a circle, it is serious business.

That being the case, here are five changes to your spending habits that can both increase benefit to you, and keep the serious creepsters out of your digital biz.

Your phone:

Retailers are known to pull information straight from your smartphone.

Obviously as long as you’re paying with plastic your retailer can track your transactions based on your phone number, but – The More You Know – it’s also perfectly legal for them to track your actual physical movements as soon as you plug into their in-house WiFi.

By itself that’s not much more than store staff and cameras (we’ll get to the latter) would be doing anyway, but store-level data security is comparable to private data security, and as we’ve written over on the Real Daily, private data security is more than a bit effed.

The fix:

Not to state the obvious, but stay off the WiFi.

This is why *Insert Deity Here* gave us Airplane Mode. Even if you feel the need to text while you shop or Instagram some hilaaaarious filters onto a nearby mannequin, as long as you get your bars from your mobile connection instead of the local WiFi, you should be able to do so without uninvited segments of the store or internet staring at you.

CCTV:

On the subject of being stared at, closed-circuit cameras are incredibly loosely regulated.

Seriously, the intended function of a security camera sits at the intersection of fighting crime and keeping-other-people’s-filthy-hands-off-your-stuff.

Those are literally America’s two favorite things. They certainly trump (see what I did there?) minor concerns like having your every move recorded by a piece of hardware that’s almost certainly connected to the Internet, because everything is, and whose password is probably “password.”

The fix:

I’m afraid can’t save you from the creepy robot eyes.

This may shock some of you, but I am not a Supreme Court justice. I am not in a position to inspire a reassessment of the value of personal privacy weighed against the importance of protecting material assets by our nation’s legal system.

That said, this is why you handle your own data security, and why you shop online.

Make exceptions only for retailers valuable enough to you that you don’t mind them recording you in their store in a format that may become publicly available.

Digital shopping, like digital everything, offers a much broader array of tools for protecting your privacy. We’ll be addressing that presently with…

Cookies:

Not nearly as delicious as they sound. Cookies are the OG data mining tools, itty bitty bits of data that track useful information about how customers use a given online service.

The fix:

As with their tastier namesakes, cookies are fine in moderation. Most digital cookies delete themselves at the end of your session or a set length of time anyway, and the few that don’t carry little enough information that it takes zillions to represent a serious liability. Clear your browser cache on the regs and you’re golden.

Loyalty Cards

Things are flippin’ everywhere all of a sudden, right? Gas, groceries, pharmacies: everybody wants your card or your phone number. As we’ve noted before, that may not lead to fun times.

The fix:

Think retailers present loyalty cards as merely as coupons or bonus points for your transactions?

Think otherwise.

The card comes before the transaction. Choose your purveyor of drugs and noms based at least in part on what the card buys you, because committing to the right one can yield crazy benefits. I personally shop one grocery rather than another because getting my tea and Fritos there earns me fuel points. I haven’t paid retail for gas in a year.

That adds up.

Purchasing data:

Ugh. I hate this. Older even than HTML cookies, this is the contemptible practice of companies buying and selling the personal information of their customers. Historically it’s been phone numbers and other contact info, but of course people willing to swipe your home phone will cheerfully swipe anything else they can get their grubby mitts on.

The fix:

This is probably unfixable on the grand scale, which we know because public and private sectors alike have tried. There is apparently a market here, which boggles my mind. I call out in desperation to the people supporting this market.

Stop buying things from unsolicited phone calls. Stop buying things from unsolicited emails.

If someone gets in touch with you without being asked, do not, for any reason, give them money.

Don’t ignore them, either. Go through their unsubscribe process, or call them back and tell them nothing except “I’m not interested. Take me off your list.”

In an interconnected world, the concept of privacy is drastically changing. That can be super scary. I mean, your TV watching you for the government, which was literally in 1984, is now a real thing, and even Orwell didn’t think we’d pay for the privilege.

But this isn’t a dystopia.

We’ve been altering how money and privacy interact since there has been money. Cash stopped being exchangeable for a fixed amount of an anonymous commodity in the far-off year of.. 1971. It didn’t go properly digital until ten years later.

Every new system means new rules. As always, they’re only scary until you make them work for you.

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Tech News

Last Message: text preferred contacts when your phone dies

At a conference near you, Last Message will be a favorite app, easily spreading to the business community so that the poor battery life of a smartphone is now only a partial hindrance.

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One of the problems with being so dependent on electronics – in order to communicate with others and run your business – is that you almost have to be near a source of electricity all the time. Otherwise, your phone will die at the most inconvenient moment, which could be in the middle of a business call or while you’re replying to an important, time-sensitive email. And if you’re on the go, it could be hours before you can have a chance to recharge your phone and finish your conversation. If you have an Android, there is an app for that.

Last Message is a free download and runs in the background, but it’s also easy to access, navigate, and update. It will monitor your battery life and send a Tweet, Facebook message, text, or email to your chosen contacts.

This message is completely customizable, but it will notify them that your phone has lost power and you’ll get back to them soon. You can also choose at what percentage of battery life the message is sent and to whom. It’s simple and convenient.

While you may not need to use this every day, as you’re probably always close to a computer or a wall plug, it can come in handy when you’re traveling or at conferences. It seems that the Last Message app will be sent to those you specify when you set up the app. However, that doesn’t mean the person you were talking to when your phone died will be notified, unless they are on the list, too, of course.

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So, this app is just notify those you speak with and interact with most, the ones that will be worried or agitated if you don’t respond to them or take their calls.

Last Message is great to keep your assistant, business partner, or your spouse in the loop when you need it the most. Consider it a just-in-case app, but it’s one that can save those you’re closest with a lot of uncertainty if you’re usually attached to your phone.

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