Increase customer retention and sales by up to 400% for your online store
8 min read
Today more than ever, having the right product, right audience and marketing strategy is just not enough anymore. In reality, none of these factors, even when perfectly implemented, are relevant if your website’s UX leaves much to be desired of.
There is a reason why the websites of e-commerce giants such as Amazon and Ebay are always overflowing with information, yet users can very easily navigate through it and find products of their own interest within seconds. This is not surprising, considering the plethora of studies such as this and also this one that link UX features to direct increases in traffic and sales. However, what is certainly surprising is the number of online business owners that actively neglect or simply do not understand just how their sales are affected by UX.
In this article I will not only be covering why UX is important for your store but also just how much you can expect your sales and user retention to benefit when providing a good user experience… with an answer that can be summarized as, a lot.
Table of Contents
- What is UX?
- Why is it important?
- Some facts that may come as a surprise to you
- Exploiting UX before your competitors do
- Analyzing the trend
- When should one invest in UX?
- How could one know how to invest in UX?
- Examples and outcomes of poor UXD
- Saving time and money while increasing revenue with UX Audits
- Staying ahead
1. What is UX?
In essence, user experience (UX) consists of all the factors that have an impact on the user’s interaction and perception with your website. Because of this definition, it can sometimes be difficult to grasp the concept behind it. With all the areas that UX touches upon, pinning down such a simple definition quickly becomes a daunting task. Nonetheless, Boersma’s T-model of user experience on the picture below can help one to understand the different disciplines that UX encompasses.
Boersma’s T-model of user experience (Boersma, 2004)
As seen on Boersma’s T-Model, User Experience Design (UXD) is affected by many areas of your business. In turn, these areas are the ones that you will need to look into to create a digital interface, which should cater to your website’s specific target audience.
Creating a smooth user experience on which your visitors can interact through a more streamlined journey allows them to reach the conversion point much faster. Nonetheless, good UX does not just bring faster and better conversions, it also adds to other aspects within your business, such as customer loyalty and brand image.
User Experience Hierarchy
The picture below displays the hierarchy within a website’s user experience. One notable aspect from the pyramid is how most companies never go above the “Convenient” line.
If you have studied marketing in the past, you will probably find this pyramid very similar to Maslow’s Hierarchy of Needs. Albeit different, one major similarity within both models is how rather than functionality being at the top, the user experience is the actual most valued aspect.
The User Experience Pyramid (Hlavac, 2016)
2. Why is user experience so important?
Providing a user experience that does not only provide a convenient experience but a pleasurable, or even meaningful one can lead to repeat customers and even bring in new ones.
Average Bounce Rate
To corroborate on this, the average bounce rate is around 20-45% for e-commerce websites and 60-90% for landing pages. To put that into context, if your website is averaging 1,000 daily visitors and has a 50% bounce rate, that’s 500 customers leaving your website every day and most likely due to poor UX. With such an amount of visitors being lost, one can imagine how many will not come back, and more than anything, how many sales are being lost.
Now imagine that you were running a PPC campaign that was effectively bringing in traffic, yet 50% of it was being lost almost instantly. In business models that often rely heavily on paid advertising (such as dropshipping), this effect can actually make the difference between being able to profit or suffer a complete loss.
If the latter example is not enough to highlight the importance of UX and its link to overall revenue, the following facts may further reinforce what has been discussed so far.
3. Here are some facts that may come as a surprise to you
- Every $1 invested in UX results in a return between $2 and $100 (Source)
- Almost 70% of online consumers say page speed impacts their willingness to buy (Source)
- Walmart Canada increased its on-site revenue by 13% after tailoring the customer experience (Source)
- Good UXD can boost conversion rates up to 400% (Source)
- 88% of online shoppers do not return to a website after having a bad user experience (Source)
- Only an approximate 55% of companies conduct UX tests or audits (Source)
- Time.com’s bounce rate dropped 15% after implementing just one mobile UX improvement to its website (Source)
- The costs of fixing UX problems in the development phase are 1,000% higher than fixing them in design. This cost skyrockets even higher, to 100 times as much if you’re trying to fix the problem post-product release. (Source)
4. Exploit UX before your competitors do
The key takeaway from this information is that good UX is important because improvements to such can transfer a positive effect to many areas of your business. However, there is another notable pattern that does not just originate from these facts, but it is also the consensus of many researchers on the topic. This pattern consists of the evidence, both theoretical and practical, on the importance of UX.
Currently, there is a massive percentage of online businesses that still fail to recognize the power and value that providing a good user experience can have. In fact, a recent study by Limina showed that only a staggering 14% of modern-day businesses are actually UX-integrated.
Add to that the ease to correct poor UX early on versus having to face extreme costs later and one quickly becomes shocked at just how stubborn the large majority of online businesses have become.
Nonetheless, this common ignorance is actually quite beneficial to you. This is because, by being aware of this pattern, you now have the knowledge to exploit an area that not many are currently looking into yet.
While a plethora of e-commerce businesses continue to neglect the power of successful UX implementations, you can now be one step ahead of them, working on establishing and integrating the perfect UX for your online business. However, one should take advantage of this opportunity to tap into the future now. Soon, most companies will realize the mistake that they have been making and thus, they will very quickly adapt to an increasingly more UX-focused approach to business.
I’m not saying this to push you into immediately spending thousands into developing your user experience to the maximum. Proper user experience implementation is not a race, it’s a marathon. And on this marathon, one has to constantly be aiming for consistent improvement through testing and feedback. What I am emphasizing is not to act fast and rush the process, but rather, focus on getting started fast and be consistent, because UX is a trend that is already on the rise.
5. Analyzing the UX trend
One of the world’s largest and most renowned management consultancies, McKinsey & Company recently published a report which tracked the designed practices of 300 PLCs over a 5-year period throughout various different countries and industry sectors.
With more than 2 million pieces of data, interviews with senior business and design leaders as well as 100 thousand design actions analyzed, what did the results show? Well, nothing but an extreme trend of placing a heavy focus on the user experience.
(McKinsey & Company, 2018)
From these results, which come from top performing multinational companies at the vanguard of innovation, it is safe to assume that this heavy UX-focused trend will soon pass onto the cultures of smaller companies very soon.
6. When should one invest in UX?
This may lead many to question when should they invest in UX. But even though this is a very common question, by now you probably already know that the question itself is wrong. We’ve established that it is clear that companies should invest in UX, so a better question would therefore be…
7. How could one know how to invest in UX?
If we look at what the average customer journey looks like on the picture below, user experience is always present both before and after someone passes through your website.
But with your website being the point at which conversions occur, it is extremely vital that one’s store provides its users with the highest quality experience possible.
The main problem is that issues with user experience can often extend beyond a single page or process. As such, and very often, effectively evaluating the user experience of one’s business is not just extremely time consuming, but also very risky.
Even though one may want to invest in UX, identifying all the areas of your website that require an improvement takes considerable knowledge and very high attention to detail. Unfortunately, many individual business owners, and even large companies have failed to understand that knowing what features need to be removed, added or changed, requires professional knowledge within the area.
8. Examples and outcomes of poor UXD
In 2010, Digg, a famous competitor of Reddit went onto redesigning its website, changing a considerable number of features and causing the majority of its user base to switch to Reddit. What was the financial impact to the company? Valued at $160 million in 2008, Digg was sold for $500.000 in 2012.
The UXD failure of Digg is just one among many, including giants such as Walmart, which in 2018 lost more than 1 billion dollars due to poor UX decisions.
The worst part about these failures is that they could all have most definitely been avoided… and that’s where UX Audits come into place.
9. Saving time and money while increasing revenue with UX Audits
Whether one is struggling with high bounce rates, experiencing negative customer reviews, or simply not getting the results that they expected, all of these factors lead to only one thing: reduced conversion rates.
Had the companies that we discussed earlier invested into a professional UX audit, it is extremely likely that none of these failures would have happened. Of course, given what we have been discussing so far in this article, most firms are still hesitant to invest in UX.
What’s worse is that it seems to be that firms are even more hesitant to invest in UX audits. According to internal data from Hubspot, approximately 1/3 of marketers were not happy with their last website redesign, as UX issues had not been fixed.
Regardless of the industry that your digital business is in, having an online presence means that you need to ensure an outstanding user experience for all of your customers. And the best way to do it right is to perform a UX audit first.
Not only do UX audits cost much less than implementing new or changing current existing features, but it also makes no sense to invest anything into a possible solution when one does not even know the problem to begin with.
10. Staying ahead
Since UX is always evolving, understanding user experience is a constant, ongoing process. The expectations and standards of your customers are always changing, and so should your website’s design.
To stay on top of the competition, one should not only perform frequent website analysis but also check on UX news, tools, and communities to be aware of how user experience is changing. With the increase in its popularity, it will not be too long until the consideration for UX-integration increases within companies at all levels. Although this change is already clear in big multinational companies, the first smaller businesses to adopt a UX-integrated approach will be the ones to get to the top faster and stay there in the years to come.
If you would like to know more about how effective UX can reduce risk, ensure smooth re-design implementations and boost conversion rates, feel welcome to browse through our list of best practices. Alternatively, if you are interested in performing a UX or CRO audit for your website, you can message us to book a call.
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