How design adds value to your business
Good design lets you create an effortless experience for your customers. That right there is what influences your business metrics.
29 May, 2024
Would you like to attract more customers, save money on operations, and make your customers more likely to continue using your product? You can do that by focusing on design. How, you’d ask?
Well, when you think of design, what comes to mind? Usually, it’s just the aesthetics - how pretty it looks. What about your product’s design? The number one rule that lets you see beyond the looks is knowing what part the design plays in adding value to your business. And that part is quite huge.
Good design lets you create an effortless experience for your customers. That right there is what influences your business metrics. The value of design is that it directly increases your business efficiency and reduces operational costs. You get higher customer satisfaction and retention too. And much more.
Our team knows the value of design firsthand. Our recent Merge website redesign brought us many new clients and better engagement, while the thoughtful designs and redesigns we did for early-stage startups and Series A+ companies helped them increase their conversions by 2-3x.
Want to have an efficient, business-oriented design?
View a recorded webinar with Pavel Tseluyko on how design adds value to your business.
Watch nowDesign and business metrics
Let’s start by pinpointing the connection between design and business metrics, especially the part of design called the user experience.
By the way, our CEO recently hosted a webinar on this topic. It’s free to watch on YouTube. Check it out afterward since it has many more tips and insights about improving your metrics with design. This article is only the tip of the iceberg.
Every day, we help businesses grow through design, and it is our mission to show how important it is!
Conversion rate
One of the main metrics you should and and probably are paying attention to is conversion rate. It measures how effectively visitors are turned into demo participants or signed-up users and how free users are converted to paying customers. Good design can significantly boost this rate.
Churn rate
Churn rate, which tracks customer loss, highlights that retaining existing customers is more cost-effective than acquiring new ones. Implementing a thoughtful UX and design-thinking approach will help reduce it.
Retention rate
The retention rate, which indicates how often users return to a platform, hinges on its value and usability.
In the B2B sector especially, it’s important to differentiate between customers who purchase the product and users who interact with it daily. For instance, a CFO might decide to buy the software, but the actual users might be middle managers or developers.
NPS
The Net Promoter Score (NPS) is another critical metric that measures how likely users are to recommend a product. A high NPS is going to suggest strong user satisfaction and brand loyalty.
Engagement time
In the attention economy, it’s also smart to pay attention to your engagement time, or the duration users spend on your platform.
Longer engagement times typically correlate with greater user satisfaction and business success. Poor engagement can also lead to increased churn, which is detrimental.
Reviews and feedback, both positive and negative, are essential for continuous improvement.
Improving conversions
To improve your conversions, you’ll need to first understand your current state. For that, create a detailed customer journey map (CJM) that shows every step from initial contact to achieving customer success.
In the meantime, track the metrics we’ve talked about, such as conversion rates, engagement time, and - one more - the growth of your email database. They will highlight bottlenecks and inform your hypotheses for changes.
Once that is done, prioritize potential improvements based on their expected impact and ease of implementation. Start making changes in two-week sprints, a strategy that allows for regular progress and validation. Small but meaningful adjustments, such as updating buttons, refining copy, or adding interactive elements, can significantly enhance your user experience.
By the way, two-week sprints not only maintain momentum but also provide frequent opportunities to assess the impact of each change. You want your product to evolve in response to user behavior and feedback so that you can steadily enhance your website's ability to convert visitors into loyal customers.
Speaking of improving conversions, one example of how redesign directly improved this metric can be seen with LiveSchool company and their Edtech management app. The work was focused on improving user experience and introducing new innovative features. Almost straight after, Liveschool’s conversion increased by 2x. Read more here.
Free to paid users
Converting free users to paid users increases the lifetime value of customers in any business. Tools like Hotjar, which can analyze user interactions and highlight areas of improvement on your platform, will help you better understand user behavior. Remember to track the ratio of free to paid users weekly or monthly.
Another tip is to simplify the onboarding process. An easy and intuitive onboarding experience allows users to quickly see the value of your platform.
During this process, it's important to clearly highlight the benefits of upgrading to paid features. Users should immediately see what they gain by opting for a premium plan, which drives higher conversion rates.
When it comes to feature implementation, focus on high-value features that require minimal development time. This not only provides immediate value to the users but also allows for quicker iterations and improvements.
Strategically using calls to action (CTAs) can guide users towards these valuable features. Measuring click-through rates and other engagement metrics with tools like Google Tag Manager and Google Analytics can also provide insights into what works and what doesn’t.
Finally, regularly review and automate your product metrics. Automation can help maintain consistency and accuracy in tracking performance.
Increasing LTV
Increasing the lifetime value of paid users is one of the best strategies for enhancing business performance through effective design.
- Segment your customer base into distinct tiers based on factors such as team size, usage duration, and location. You will identify top-tier customers who contribute significantly to revenue and focus your resources on delivering the highest value and exceptional customer service to these key groups.
- Regularly collect feedback through surveys and in-depth interviews. This process, guided by techniques from resources like "The Mom Test," can help you understand user behavior and gather insights into the strengths and weaknesses of your products.
A bit of trivia. The premise of the “Mom Test” is that if you can get useful feedback without asking directly or leading questions, even your mom, who loves you and doesn't want to hurt your feelings, will give you honest insights.
- Prioritize feedback. Measure your Net Promoter Score and implement features that offer high business and customer value with minimal development time. Also, focusing on growth hacks for lower-tier customers can also drive overall LTV by converting more users into higher-value segments.
What about business efficiency?
Improving business efficiency depends on refining the user experience to reduce customer support needs while consistently staying ahead of competitors. A simple and intuitive design can drastically reduce support tickets.
When user flows are easy to understand, and features are readily accessible, your users can solve issues on their own, lowering your operational costs related to customer support. This also leads to higher NPS.
Remember not to deprioritize support tickets in your backlog. Always balance business and customer value with delivery time. Also, use feedback from existing support tickets to identify areas for improvement and enhance your overall usability.
Want to have an efficient, business-oriented design?
View a recorded webinar with Pavel Tseluyko on how design adds value to your business.
Watch nowOutstand competition
To outpace competitors, you need a strategy of continuous design improvement and regular competitor analysis:
- Identify your competitors, conduct competitive analysis, and understand their strengths and weaknesses. This should be done at least every six months, ideally every three months.
- Make it a priority to know what your closest competitors are good at and what they are bad at. You need to outperform them at what they do best while avoiding the same mistakes. Make your designs even better.
- Don’t skimp on aesthetics. People enjoy beautifully designed products, especially if they are easy to use. This is also a chance to outperform your competitors. Not everyone focuses on making their products beautiful.
Stand out! Do better than your competition! Make it your value, which means it has to improve something in your customers’ lives and not just be eye candy.
Future of UX
A special mention of the future technologies and trends. Don’t be afraid of them. Innovations like AI and AR/VR are not your bottlenecks. They are your opportunities. We have a new and completely free e-book that goes deep into this subject.
Numerous big players are already implementing this new tech to enhance their customer experience. For example, Spotify powered its AI Playlist with Open AI, Best Buy has its generative AI-powered virtual assistant with Gemini, or check the Horizon Worlds by Meta.
To know how to avoid getting left behind when it comes to innovation, we suggest reading our free resource on how the future of UX will look like.
Conclusion
Overall, a design thinking approach is not limited to designers alone. It should involve sales, marketing, product management, and engineering teams.
For example, companies like Figma, Framer, ClickUp, etc., show how focusing on the entire customer experience, beyond visual design, can drive business success. They did it, you can do it too. And Merge can help, by the way.
Ultimately, good UX design leads to higher conversion rates, lower churn, better retention, higher NPS, longer engagement times, and more positive reviews. A strong design also sets your product apart from the competition. And you need to show them who’s best, right?
