Return on Investment Versus Customer Centric Decision Making
February 14, 2014
How much change in business is instigated on gut feel and intuition and how much kicks offafter metrics tell us a change is a good idea? When should business consider metrics versus gut feel?
Some Decisions are Difficult to Model
I was chatting to one of our customers recently about their plans for the forthcoming year. Last year they released a new website built on one of the more sophisticated ecommerce platforms available. This year they are planning a complete rebuild of the front end of that website. I had to ask why. Reasons provided were:
- Needs some tweaks to come on brand;
- Marketing cant undertake all of the promotions structures as quickly as they would like; and
- Rather than running an m. mobile site, they wanted to go responsive design.
Prima Facie, you would think that undertaking a project in a business would require a positive projected ROI before undertaking the project. So my next question was How can you calculate the payback you will receive from making these changes? I wasnt surprised when the answer was We dont know. For indeed, how can you know what difference the above changes will make to the traffic and conversion stats for an ecommerce website when you havent made them yet?
The answer would be lets model the outcomes. However, most of the decisions I have seen made (in the real world) to upgrade a website are made without really knowing what feature set that new website will deliver. The business may only have a wish list or a broad idea of the outcomes but what they will always know is that the new site needs to be better in so far as pleasing the customers more. The site will be:
- Easier to use
- Better (or richer) functionality and content
Business Decision Drivers Other Than Metrics
One of the great features of trading in the web world is the volume, specificity and instantaneous nature of the feedback from users. Your customers can guide the decision making. However, when making the above decision to redesign the site, the business is not taking specific user feedback into account but making a broader decision on the style and quality of user experience the business would like its users to have.
It would be possible on completion (or at some specific point) of the project to run a concurrent A/B test of the new site against the old site to check benefits delivered to conversion and engagement. However, at that point, a large part of the project spend is complete. The new site is built. How many businesses have the process discipline and courage at that point to put a sword to the new site if it is not performing? Most would tend to muddle through and push on with the new site. Peoples jobs will be at stake at that point!
But A/B tests are not often undertaken with new website launches. There may be user workshops undertaken prior to launch through design and test phases but at the end of the day, most website builds and releases are started without calculating the potential benefits from the reskin and then the build and release undertaken without user input. The website builds are completed on the basis that the better looking website with additional functionality, performance and simplicity is good for user experience. And whats good for user experience must be good for the brand and consequently online sales.
I dont disagree with this argument. A better user experience can only be good for the brand and the business. Even if not easily measured in the short term, the benefits will come over the longer term. There have been some great examples of businesses winning in their space as a result of a customer focus. Amazon took a long-term view when investing in web experience and focussed fanatically on delivering quality user experience. It works for Amazon!
Can You Afford to Deliver Great Customer Experience?
As Forrester says: A good user experience builds brand equity with every interaction, but a bad one can completely erode that equity on all levels. Worse, it can cause a customer to leave you for a competitor, never to return again.
Need anyone say more?
If we agree that delivering an optimal customer experience in all instances is desirable, the thing preventing any business delivering on this is the cost and ability to execute.
The major decision process to build and release a new website should consider long-term thinking. However, the waters are murkier the longer term the thinking goes as more variables come into play.
What else is there to consider then but broad strategy and your view of how important customer experience is to the future of your business. Tactical decisions should be supported by ROI and maybe, just maybe, you can build a model which includes some ROI numbers for those longer-term decisions. I suspect that in the end, you will make those big, new website decisions based on gut feel. That is, your gut feel on how important the improved customer experience can be for your business.