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User-Experience Design: How every dollar invested can return up to $100

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We’re all familiar with the boardroom meeting – usually, it’s called by a senior staff member, has an agenda and is attended by the appropriate people.

At Amazon, the biggest e-commerce company in the world, things work a little differently.

When Jeff Bezos, Amazon’s CEO, calls a meeting, everything appears normal until you notice an empty chair who Bezos refers to as the “most important person in the room”.

No, Bezos doesn’t have an imaginary friend who attends all meetings, just in case you were wondering. That chair is occupied by “the customer”. It’s a way to keep customers front-of-mind when decisions are being made, ensuring everything covers the “how will this impact our customers?” question.

And most importantly it’s one of the secrets of why Amazon’s customer experience is among the best you will come across. The products you want are easy to find and purchase, then promptly delivered to you. The website is optimised to make everything as simple as possible and the recommendations are so compelling they make up almost 40% of all purchases.

The cherry on top of it all is a revenue of $107 billion in 2015, outperforming other leading players such as Google, Facebook and eBay. This is User Experience Design (UXD) in its most exciting form and showcases the value of crafting what you do around how the customer operates.

As we said in our previous blog, developing a customer experience architecture isn’t rocket science, but the starting point must always be the customer. Combine functionality with great design, tie this to meaningful data insights and you will have the recipe that you need to delight your customers. 

According to research from Forrester, investing in UXD can pay off in several areas. An excellent experience increases a customer’s willingness to pay by 14.4%, reduces their reluctance to switch brands by 15.8% and boosts their likelihood to recommend your product by 16.6%.

Numerous industry studies have also stated that every dollar spent on UXD brings in between $2 and $100 in return. Achieving these benefits can be done by using customer insights to create products and services that are tailored to individuals such as:

  • Mobile apps/new customer experiences
  • Purchase recommendations
  • Answers to queries.

Here’s how three industries are delighting customers with user experience design-thinking:

 

Governments delivering enhanced services.

New Zealand’s Ministry of Social Development created a data model to estimate the risks of welfare dependency among certain groups. By targeting services to these groups, the ministry was able to:

  • Increase employment in teen parents by 9.3%
  • Increase employment in young people not living with their families by 9.4%
  • Save $1 billion over four years.
 
Travel and transport creating targeted loyalty programmes.

Denihan Hospitality Group integrated a customer analytics solution to personalise the guest experience and optimise room rates.

The solution’s insights uncover why customers choose to stay at a particular hotel, what drives repeat business, how demand varies by season and which room rates will yield the right combination of business volume and profitability.

By targeting high-value customers with tailored, profitable offers, the company is able to create a memorable guest experience and enjoy an ROI of 300%.

 

Telecommunications companies reducing churn.

Most telecommunications companies have seen little benefit from cross-sell and up-sell tactics and customer churn is a growing concern. 

This has seen them turn to a new form of predictive analytics called “uplift modelling” to enhance user experiences. This approach identifies customers who will react positively to a marketing message and enables businesses to focus their efforts on this group while avoiding engaging with those who won’t react or could react negatively.

Telenor Group, one of the world’s largest mobile providers, has effectively used uplift modelling to reduce spending by 40% and churn by 36%. 

Find out more about creating compelling user experiences and how companies across industries are doing it in our eBook, “Find the 360 view of your customer”.

 

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Sam Williams
Author: Sam Williams

Sam Williams is the CMO at Certus Solutions, Spanning Digital Business Strategy, Information Management, Business Analytics, Enterprise Asset Management, Mobility and Cloud, Certus helps its 500 corporate and government clients make relevant choices, deliver tangible results and connect project outcomes to customer expectations.

22 February 2017