# Design

Quantifying the ROI of UX design

Red Rocket teamMay 7, 20255 min read

Most people think of boundless creativity when they hear about design. However, is this really the case? Working as a UX designer, you meet the challenges of creating an optimal product for user comfort and increasing conversions. Therefore, you must know dozens of aspects to develop the perfect interface. The second point is that the result of your work should be valuable. To calculate the value of design, the ROI of UX is generally applied.

For most people, ROI is familiar when working with marketing, advertising campaigns, and product creation. However, design also needs to be properly evaluated to understand whether you are moving in the right direction or not. That's why we would like to dedicate this article to the value of UX and ROI calculation, as they are two integral concepts.

What is ROI?

We would like to start this article by looking at what ROI is in general. Return on investment is one of the most important indicators of the profitability of your investment. Simply speaking, it is the ratio of your investment to the profit you get from it. Here is the formula to calculate ROI:

This metric applies to many aspects of work where it is important to determine the benefit to investors. For example, this could be developing a mobile app, launching advertising campaigns, and buying new equipment for a business. This way, you can get a clear vision of profitability. Thanks to ROI, businessmen understand whether it is worth investing further in a particular idea.

Why UX Designers Must Understand ROI?

It's no secret that designers are creative individuals. On the other hand, calculating ROI is a process that requires precision and care. Entrepreneurs and business owners demand that UX designers understand how ROI is generated. Why is it so? They want to maximize the benefits of the money they spend. So it makes sense that it's in their interest to maximize their ROI percentage.

If you work as a UX designer, you should understand and measure the ROI of UX. This way, you can clearly tell the customer or management how your work has benefited them. In some cases, this could be the starting point for you to skyrocket your career or get a pay raise.

What are the Problems in Calculating the ROI of UX Design?

As you may have already realized, designers must know how to calculate ROI. However, realize that this task may be more difficult than you think. For example, if you want to calculate the ROI of a launched advertising campaign, it won't be difficult. With UX design, on the other hand, the calculation is more complicated. Among the main challenges:

No standardized indicators;
High variability of the assessment;
Non-monetary benefits.

All of the above factors make the process of calculating the ROI of UX design much more complicated. Below, we want to take a closer look at all these common difficulties.

Absence of Standardized Performance Metrics

The lack of standardized performance metrics is one big challenge in calculating the ROI of UX design. Consistent with other fields such as marketing or sales, UX doesn’t have universal KPIs that can be applied to any industry. Yet many teams use different indicators, such as task completion rates, time on task, or user satisfaction, and that makes comparison almost impossible. Even at the best of times, making design investments without consistent benchmarks is like pouring money down a bottomless hole. Such ambiguity breeds skepticism among the stakeholders and contributes to ambiguity in strategic decision-making.

Variability in Value Assessment

The value created by UX improvement largely depends on the product, audience, and business model. Better UX means better conversion rate for some, reduced support costs for others, and higher retention for others. Since there are these variations, the formula for ROI will always be inconsistent. Moreover, different stakeholders can have different views of value. Some can be profit-driven, some can be focused on revenue, some on user loyalty or operational efficiency. This inconsistency makes ROI calculations difficult, and often metrics have to be adjusted to each project’s specific context.

Non-Monetary Benefits and Returns

It is difficult to quantify dollars in terms of enhanced user satisfaction, brand perception, accessibility, and customer loyalty. However, they play a strong role in long-term business performance. ROI is frequently not a discussion that includes non-monetary returns because they do not show up on financial statements.

What are the Benefits of UX Design Testing and Prototyping?

If you want to achieve the best return on investment, you must carefully craft your UX design. This is why you should dedicate a lot of time to testing and prototyping. These stages have many benefits for the end result, and here are a few of them:

Problem detection. The testing stage is done to quickly find all kinds of errors in the design;
Quick changes. Prototyping allows you to quickly implement the necessary changes to the current version of the product, without having to create a new design;
Audience understanding. Testing helps to better understand the needs of the target audience of a digital product.

This way, testing and prototyping are essential if you aim to deliver the maximum business value of UX design.

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How to Calculate ROI for UX Design?

Above, we have already written a formula for calculating ROI. However, how to apply it to user experience design? First, pick clearly measurable outcomes that are related to user behaviour. For example, improved conversion rates, reduced support tickets, reduced task times, etc. Determine the financial impact of these improvements using before-and-after comparisons. However, deduct the total cost of UX work (research, design, and implementation).

You should subtract UX costs from revenue. Divide the resulting number by the investment and multiply by 100%. This way you get your percentage rate in which you’ll get a return. It’s also important to place ROI in the context of your business goals. If you wish to focus on customer retention, link UX improvements to churn reduction metrics.

Example of Calculating the ROI of a UX Design

Math formulas seem a bit confusing, especially for creative people, don't they? That's why we want to give you a real-life example of ROI calculation for a UX design project. Imagine your company is opening a new branch, and it requires a new website. You have worked on creating a UX design for the new site. You've done the math and determined that the total UX investment is $5,000.

One month after launching the site, the UX design has generated 25 thousand dollars in net profit. All you need to do is calculate the following: (25000 - 5000)/5000. The resulting number should be multiplied by 100%. Thus, we get a return on investment of 400%, which is an excellent result.

ROI Showcase: Validating a Design System Approach

A UX team lead suggested creating a design system to streamline processes and maintain consistency in our product. Yet being so large, it hadn't been an investment upper management was willing to return on. ROI analysis led by the lead was done to justify the initiative as the lead calculated the savings in the design and development hours, reduction in rework, and time to market.

First, the setup would take time and resources, but the design system would reduce efforts during design by 20–30 percent and accelerate development up to 25 percent. It convinced stakeholders (including insider dissent) and brought them in for implementation.

What are Other Ways to Incorporate ROI in UX Designs?

Another great way to place ROI into UX design is to always align your work with the goals of stakeholders from the beginning. Know what success looks like for leadership in terms of revenue growth, reduced churn, or increased NPS, and use your UX strategies to drive that toward those outcomes. This alignment ensures that decisions are treated as business decisions rather than visual enhancements.

Another method is to balance the two business KPIs and the usability metrics. Monitor user satisfaction versus other metrics like conversion rate, time to purchase, etc. Quantify the impact of design changes through run-before and after comparisons.

Final Thoughts

As you may have already realized, there are UX metrics that can help you determine the profitability of your work. However, calculating the ROI of UX is a complex process that goes beyond a general formula. You need to understand how your work helps the company improve efficiency and profitability. You can then calculate the percentage and tell what benefit you are providing.

Frequently asked questions

What is considered a good ROI percentage?

If your ROI is above ten percent, then your efforts and investments make sense. Return on investment above ten percent is considered excellent for any business because you get more than you spend. The higher the percentage, the better it is for your company.

Why should UX be measured in conjunction with ROI?

It is recommended to measure both of these values to fully understand the impact of UX design in terms of financial benefit. This way, you can see how much return on investment the user experience brings to your business.

How does UX integration influence user satisfaction and UX ROI?

The right UX elements help to increase customer satisfaction. The ROI of UX will increase if you implement an optimal design. Therefore, you can invest in UX design to increase your overall ROI.