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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 (AG) 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

Jenzy helps perfectly measure your kids’ feet

(TECH NEWS) Jenzy is a mobile app currently in beta that helps you perfectly measure your kids feet and buy shoes without having to leave your home.

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Parents rejoice, there’s now a mobile app that sizes your child’s feet to determine their correct shoe size. No more carpet charts that every kid has put their dirty little socked foot on, or those weird metal sizing instruments.

With Jenzy, you just take a picture of your child’s foot, and the app calculates the measurements. It then generates personalized size and style recommendations, which you can order directly from the app.

Jenzy partners with podiatrist recommended brands designed for active kids, including pediped, Robeez, and Morgan & Milo. However, you don’t have to purchase their suggestions to receive the sizing info.

Incorrectly sized shoes are a literal pain for everyone, but this especially affects children, who don’t have purchasing power.

Additionally, shoes that don’t fit can have long-term effects on children’s growth and development, and lead to foot problems in the future. Properly fitted shoes are necessary for healthy foot development.

Wearing incorrectly sized shoes is just part of the problem. If shoes aren’t suited for every day use, children’s feet and overall growth can also suffer.

Flip flops, ballet pumps, and shoes with raised heels are not recommended by podiatrists for frequent use, as they can cause discomfort, or even musculoskeletal issues.

According to Dr. Stewart Morrison, a University of Brighton podiatrist, “children’s feet are still growing and are more susceptible to damage than adult feet, so it’s really vital to ensure they are wearing shoes which fit them well – in width as well as length – and that are suitable for age, as well as the task they are wearing them for.”

As online shopping has taken over, fewer parents are getting their children’s feet sized by in-store experts. Of course, there’s also a cost-barrier, as many stores that offer shoe-sizing are often more expensive.

Jenzy hopes to bridge that gap, providing parents both proper shoe sizes and affordable products designed to last.

Right now the app is set to launch in December, but if you don’t want to wait, apply to take part in the beta test on Jenzy’s site.

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Time is money and Clockify helps you make the most

(TECH NEWS) Tracking your time worked as a freelancer can easily be lost in the shuffle. A new tool has been designed to make this important aspect easier.

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After years of searching for a method that works for me in terms of organization and productivity, the answer seemed to be simple: a calendar I can write on and Post-It notes. This method is a little old school, but seems to get the job done for my organizational needs.

However, there are some things that slip through the cracks with this method, but it’s more user error than it is the actual practice. One thing I struggle with is keeping track of my freelance hours this way.

I have a tendency to guesstimate how much time I worked throughout the day and know that I wind up underdocumenting my hours. I would hate to know how much money I’ve missed out on keeping (sometimes inaccurate) handwritten notes.

But, like many other small scale issues, there is a simple solution. And that is found in the form of time trackers.

One of the newest members to join the online time tracker team is Clockify, who operates under the idea of “your time, your rules.” It is a free time tracking tool designed for agencies and freelancers.

Clockify allows users to manage as many team members, projects, and workspaces that you need in an effort to help your business run smoothly. This allows for a complete overview of team productivity.

The tool offers a way to enter time manually as well as clock time automatically. This way you can keep tabs on what you’re working on and assign and label time logs to the appropriate clients.

With this time tracking, you are able to generate weekly, monthly, and annual reports at any given time. These reports can be saved, exported, and shared with clients to give them more information about your work process.

The real-time tracking helps to improve business efficiency and gives more insight into what each team member is spending their time on. Having this information available can give visual representation of how to improve in the future.

Clockify currently exists in desktop format with iOS and Android apps coming soon.

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Russia vetoed cryptocurrency and came back with CryptoRuble

(TECH NEWS) Russia put a hard pass on other cryptocurrencies in their country so that they could hop in the crypto-game with their own CryptoRuble.

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Just days after The American Genius reported that the Russian Central Bank would attempt to block access to cryptocurrency trading cites, the Coin Telegraph has reported that the Russian government will issue its very own cryptocurrency, the CryptoRuble.

The report cited local Russian papers, who quoted the minister of communications, Nikolay Nikiforov.

Earlier this week, head of the Central Bank, Sergei Shvetsov, said that he would work with the Prosecutor General’s Office to ban Russian citizens from accessing cryptocurrencies like Bitcoin, calling such currencies a “negative phenomena for our markets” and a “pyramid scheme.”

Now it appears that the Kremlin will create its own cryptocurrency – one it can keep an eye on — which, some might argue, defeats the entire purpose of cryptocurrency.

However, like other cryptocurrencies the CryptoRuble will be based on blockchain and will presumably help prevent online fraud.

CryptoRubles will be exchangeable with regular Rubles, although the systems of exchange have not yet been set up. Experts think that Russia is hoping to stimulate e-commerce without the need for foreign money markets, which will allow them to have more independence from the United States.

According to Nikiforov, the Russian government is setting up its own cryptocurrency under the assumption that if they don’t, other European governments will.

Said NIkiforov, “I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after two months our neighbors in the EurAsEC will.”

Traders using CryptoRubles will be asked to provide documentation of retail transactions and services rendered – or pay a 13 percent tax for undocumented transactions, leaving a wide loophole for money laundering.

Critics say that Russia is trying to facilitate, while also profiting from money laundering; that the Kremlin is stealing the market from other cryptocurrencies; and that the CryptoRuble fundamentally defies the spirit of decentralization that inspired other cryptocurrencies.

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