CEO Q&A: Embracing UX Opens New Revenue Streams and Delivers Strong ROI

projekt202 Chairman and CEO David Lancashire
projekt202 Chairman and CEO David Lancashire

Understanding your customers is more than just good business. In today's competitive environment, it can be the deciding factor in whether your company soars or sinks.

projekt202 Chairman and CEO David Lancashire recently discussed the ways companies can fully leverage user experience (UX) strategies and shared his bold predictions of what's on the UX horizon:

Why are some companies and business leaders hesitant to employ UX, despite the evidence that proves this is a better way to build products?

I think there are a number of businesses out there that are focused on how to execute their numbers to make Wall Street happy. They say, "If I acquire this business in our sector and it adds X amount of revenue, I'm going to hit plan for the year. I have a bunch of activities and initiatives I need to run successfully to make that happen, so I don't really have a lot of time right now to think about the customer experience.” They assume that teams inside those businesses they’re acquiring are somehow applying their thinking to that issue.

The flaw in that argument is that you now have a company that's acquiring business after business, or acquiring product after product, which is creating a large number of different interaction points with customers.

These customers now realize that they seem to have a completely different interface, a completely different experience, even though they're engaging with a product from the same company.

Unfortunately, there's not enough drive in some businesses to address that issue, and it’s actually becoming bigger and bigger each year as more and more businesses are acquired. At the same time, those companies are becoming bigger and appear to be achieving their goals. I think that's a key group that tends to be willing to ignore the user experience, even when that freight train's headed right toward them.

What would you say to companies like that? Is ROI a component of the move to embrace UX?

I think all of this ultimately ends up in terms of ROI. If I'm going to grow my revenue streams, improve my gross margins or add a new complementary line of business, if I can do that based on a very clear understanding of experience enhancements and meeting aspirations of a very specific group in my target customer segment, I'm doing it more intelligently and more programmatically. I'm essentially focusing corporate resources on the right challenges and the right problems to solve, thereby delivering a far superior solution.

Let's just think about that: if I need to compete with product X in the market and they've introduced seven new features, the way we go about doing things is we identify which of those seven features, if any, we need to match in our next release, or whether there's a net new feature that we're going to base most of our promotion on, because that's what our key persona and target market is showing us -- through their actions and our research programs -- they really need. Those are the kinds of really detailed ways we can get at the truth of what's needed. It ties directly back to what we're designing, building, taking into the market and driving revenue streams with.

Obviously, there's a lot of competitive pressure to ensure their experience is at least as good as a competitor’s experience. There's been a lot of use of analytics in that area, which sometimes can indicate what little tweaks can be made in order to improve conversion. At projekt202, we add to that equation by actually understanding why things are going on as well. We can move beyond just conversion optimization to identifying how we can really meet the needs of a particular segment. That puts you, again, one step ahead of the competition.

projekt202's David Lancashire addresses the value of user experience programs at the Celebrate UX tech event in Dallas.
projekt202's David Lancashire addresses the value of user experience programs at the Celebrate UX tech event in Dallas.

For companies that haven't embraced UX yet, what would you recommend? How do they get started with a strategic UX program?

If you're talking about a real group of skeptics that are keeping their heads down and saying, "I don't really need that right now," I have a recommendation for that group: Take a look at what you're already spending in R&D and market research, and realize you’re already allocating a number of dollars with the intent of gaining a better understanding of your customers. Take a small amount of those dollars and initiate a program where you start to use the observation of your customers in context as a method of gathering qualitative data.

Those results can tie directly to your key business initiatives. Don't spend net new money on it, if you feel that way. Simply divert some existing dollars that are in the area of research. Let us demonstrate how much more return we can give you for each of those dollars spent, in terms of clarity of understanding that end user or customer.

What words of encouragement would you give to those who are starting to realize experience is important?

I'd tie this back to business drivers. With an existing line of business, companies are looking ahead at what to do in the next release of their product to gain more market share. When we deeply understand the key personas that exist in the target segment, then we can have a very clear, prioritized list of capabilities that we need to deliver to really excite that particular customer and meet their aspirations. That's a basic level of prioritizing what work needs to be done to win over the specific group you care about.

While you're on that journey and doing that research, one of the by-products is identifying other complementary things that open up opportunities for the company to generate an entirely new stream of revenue.

That stream of revenue creates the catalyst for the company to grow exponentially, rather than in a standard and predictable fashion. I think it changes the game entirely for these businesses and they need to use that as justification for an investment.

How do you see this playing out in the next few years?

My prediction is that we are going to see an increasing number of large corporations in the United States investing in what I'm naming a Center of Experience. This would be a clear research program that is focused on having an up-to-date picture and understanding of each persona in the target customer grouping.

Companies know they have a "type" of customer and spend millions on research to try to understand them better. Many companies are simply not aware that these new techniques from behavioral science -- the observation of users and customers in context of the things they're doing in their daily lives -- create a whole new lens through which you can understand customers and end users.

Even though projekt202 has been doing this work since 2003, it's relatively new to big business. We're trying to educate everyone that these programs exist that allow you to gain this insight. Don't go another year without investing in gaining these unique and wonderful insights that can give you a real head start against your competition.

My biggest and boldest prediction is that we're going to see massive adoption of these Centers of Experience. Those will be complemented by what I call Consulting Designers that help Agile development teams embrace UX inside those organizations, and a whole series of assets that allow big businesses to become self-sufficient at executing these programs in years to come.

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