If only everything in life were as reliable as user testing

It is quite widely reported that Amazon gained an additional $300million a year increase in turnover by implementing a single recommendation from a usability company in the US http://www.uie.com/articles/three_hund_million_button.

Yet few people who are not usability or UX professionals are probably aware of this achievement. Bunnyfoot has achieved almost as impressive gains for clients in the travel, retail, charity and banking sectors, and I am sure similar improvements have been made as a result of work by other quality usability companies working with major brands.

To put this in to perspective: in 2008 Hovis was in danger of being delisted by the major UK supermarket chains. A daring £15million advertising campaign was launched; including a 122 second TV commercial, a PR onslaught, and a host of product-specific communications. These activities together resulted in the campaign being voted the nation’s ‘Campaign of the decade’ and other accolades included:

  • Grand Prix at the 2010 IPA Effectiveness Awards
  • Gold at the 2010 Marketing Society Awards for Excellence
  • Winner at the 2010 CIM Marketing Excellence Awards
  • Gold & Silver at the 2010 BTAA Craft Awards

The Hovis adverstising campaign took more than six months to plan and execute (cost £15M), and it took over a year to measure the results, which in the final analysis were an incremental increase in profit of £75million. http://www.haystackonline.com/page/21412/agencies/dare/as-good-today-as-its-ever-been.

In comparison the Amazon usability work took around a month in total to perform the research, implement changes to the site and measure effectiveness. Total cost I estimate to be less than £100k (this is less than the price of the econometric study alone used to determine the profitability of the Hovis campaign!).

Advertising and usability have very different roles in the market place, both are important. They both can (and do) deliver significant positive return on investment. But there is a disparity between the perceived value of the two offerings: Advertising is seen as strategic, the costs involved mean that decisions are often vetted by the board of directors, (especially £15million ones). Usability is often perceived as tactical, the costs are often less than £100k and ease and speed of implementation mean that the board of directors is rarely aware that usability testing has happened or that the resultant changes have delivered significant value.

So if you want to add significant value to your company without spending large amounts of money that require approval from the board, then invest in usability. Better still make usability and user experience the strategic activities they deserve to be – they still won’t cost the earth but will deliver ROI that the board should be made aware of.

Further reading

Econsultancy posted a similar blog post from an interview with Rory Sutherland you may enjoy.

Virgin Holidays increased their conversions by 90% after an initial piece of user testing. Take a look at our case studies to see the difference usability and user centred design makes.

  1. Rob, you say in your article that the $300million button client was Amazon. Correct me if I’m wrong, but I dont think this is true – UIE never revealed the client’s identity.

    • Harry, does it really matter if it was Amazon or some other $25Billion retailer? Isn’t the salient point that we should celebrate and promote great UX case studies?

      Jared made public his working relationship with Amazon at an excellent talk at SXSW2010.

  2. Jon Darby says:

    Also, you quote the Amazon ROI as $300m in TURNOVER, yet the Hovis figure is £75m PROFIT, so not in the slightest way comparable.

    • Indeed Jon, but I wasn’t really proposing that these figures themselves were directly comparable, I was really comparing the scale of the activities (spend and duration) and also indirectly ROI (acknowledging that both delivered ROI). If you do a back of the envelope calculation:
      Amazons stated gross profit margin for quarter ending 2011/12 is 24.7%. $300million dollars in Sterling as of today is £189million making an estimated gross profit increase of £47Million. Hovis achieving an ROI ratio of 5:1 and Amazon 470:1

      However, the point is to compare the scale and the attitude – often usability work is too cheap and quick to get taken strategically.

  3. I think questions about the amount of money earned, nett or gross, aside, the idea that it isn’t the technology, but the “psychology” behind the technology, that should be the focus of potential ROI calculations. So usability, user-friendliness and user experience need to be at the forefront of BOD deliberations and potential ROIs linked to that. It’s basically the “social” in social commerce. It’s about the customer.

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