How to Calculate the ROI of UX

The ROI of UX is always positive. Every $1 invested in UX returns $100 to the business, and every $1 invested during the design stage of software development saves $100 later. Calculating that ROI comes down to three steps: speak the language of the business, set SMART goals, and keep score.

What Is the ROI of UX?

The ROI of UX is the measurable return a business gets from investing in user experience design. As the Interaction Design Foundation explains, the specific challenge with measuring UX ROI is that the investment and the benefit are rarely expressed in the same unit, and the benefit isn't always direct or easy to measure.

That doesn't mean it can't be done. It just means you need to approach it deliberately.

The impact of UX improvements isn't limited to any one industry or type of company. Consider what it's delivered for others:

• Bank of America saw a 45% increase in online banking registration after a UX redesign
• Walmart's web traffic increased more than 200% after their UX redesign
• Airbnb's founder Joe Gebbia attributes their $30 billion growth to their investment in UX
• HubSpot saw a 300% improvement in conversion rate after a UX project

Put simply, companies that invest in design perform better on virtually all criteria.

How Do You Measure the ROI of UX?

You likely already know your team's UX improvements will deliver better product reviews, higher brand loyalty, reduced user errors, and stronger conversion rates. You probably even have basic data to support that your improvements lead to an indirect increase in profits.

The goal of calculating UX ROI is to draw a direct line from your team's work and project budget to the sales or revenue numbers your finance and business leaders actually care about.

Here's how to do it.

Step 1: Speak the Language of the Business

In day-to-day work, designers and developers talk about sprints, experiences, and journeys. Business leaders talk about KPIs.

The first step is to adjust your terminology. Start with a list of the KPIs that finance and sales track, or whatever metrics matter most to your key stakeholders.

Different organizations prioritize slightly different KPIs depending on their sector, stage of development, and priorities. Common examples include:

• Revenue and Cost (Profit Margin)
• Customer Lifetime Value (CLV)
• Employee Turnover Rate (ETR)
• Employee Productivity (time on task, task completions per day, etc.)
• Donors and donor growth (nonprofits)
• NPS scores
• Churn rate

Once you have your list, ask: which of these KPIs could be used persuasively to measure value and justify your project to the rest of the organization? Which ones are closest to the work your team actually impacts?

Step 2: Be SMART About Your Activity Toward Results

To measure ROI, you need a specific and measurable goal that defines success for your team or for a given project. That goal should connect as seamlessly as possible to one of the KPIs from Step 1.

Stick to SMART goals:

• S = Specific
• M = Measurable
• A = Achievable
• R = Relevant
• T = Time-Bound

Through usability testing, you're confident that ecommerce site optimizations can have a direct impact on sales revenue for a specific line of business over the next year. A SMART goal for that might look like this:

"We expect to increase sales revenue for XYZ line of business (Specific) by 20% (Measurable) before the end of the next fiscal year (Time-Bound)."

Because it's tied to a core business KPI, you know it's Relevant. You and your team then need to honestly assess whether you believe it's Achievable.

Often, these goals are handed to you as part of a larger cross-departmental effort. You can also create multiple goals that fit into a broader company-wide objective. The key is to make them something your whole team can keep in front of them as a guide throughout the work.

Step 3: Keep Score to Calculate the ROI of UX

Now that you've identified what matters most to the business and what your team can do to impact those KPIs, it's time to collect your data, convert it to metrics you can affect, and calculate your ROI.

Collect

No matter where you are in your UX maturity journey, you're already collecting some level of UX metrics. Whether you're using Google Analytics, customer surveys, sales funnel tracking, internal customer service metrics, or some combination of all of the above, there's already something telling the story of your team's contribution.

Those current metrics become your benchmark. Frequently, companies will run initial research activities, like surveys or user tests, for each project to form a baseline before a specific effort shifts into high gear and changes are rolled out to end users.

Convert

Once you've captured your current measurements, take those UX metrics and start running them through a series of conversions to turn them into business KPIs.

This is more of an art than a science, so you'll need to adjust your approach based on the metrics you've chosen and the business KPIs you're attaching them to.

Calculate

Calculating your ROI involves very simple math:

ROI = Return / Investment

Your "return" will vary based on the metrics you defined in Steps 1 and 2.

You can also identify the percentage increase or decrease in your KPI using:

Percent Change = (New Metric - Old Metric) / Old Metric

What Does a Real UX ROI Calculation Look Like?

Let's walk through a real-world example.

Assume you sell a product for $40, and the average customer buys from you 3 times per year. Today, that customer's current value is $120 per year.

Senior leadership wants to improve the value you create for each customer, where they'd feel inclined to spend more (Increase Average Revenue Per User, ARPU). You believe that understanding what customers want, through user research and usability testing, will allow you to make product and website improvements that will:

• Increase average order value (AOV) by 10% to $44 ($40 + 10% = $44)
• Increase order frequency by 10% to 3.3 per year (3 + 10% = 3.3)

If your company has 10,000 customers, that's a revenue improvement of $252,000 for just one year.

You can then easily calculate the short-term ROI of a UX research and design project by dividing that new revenue by the cost of the project. In this scenario, put the total UX investment at $50k:

ROI = $252,000 / $50,000 = 5.04

That's a 504% return.

Why Should UX Teams Track ROI?

Determining the ROI of UX isn't always part of a UX team's process, but it's the best way to quantify your team's contribution, identify what's working within your UX practices, and prove the overall value of UX within your company. It will also help you quantify your design investments to determine where to double down and where to cut losses.

At Drawbackwards, we calculate the ROI of UX for every client project, and we've even created tools to set a benchmark for a customer's experience and then measure the quality of UX improvements over time.

The ROI of UX is well-documented for some of the best organizations in the world, and yours can do the same by speaking the language of the business, being SMART about your targets, and keeping score.

FAQ

What is a good ROI for a UX project? Any positive ROI is a good starting point, but industry benchmarks suggest every $1 invested in UX returns $100 to the business. In practice, even modest usability improvements that increase conversion rates or reduce support costs can produce ROI in the hundreds of percent.

How do I calculate the ROI of UX if my team's impact is hard to isolate? Start with the KPIs closest to your team's work, set a baseline before any changes go live, and measure the same metrics after. If you can't isolate UX as the only variable, document your contribution clearly and use percent change alongside other contributing factors to tell the fuller story.

What metrics should UX teams use to measure their impact? Start with whatever your business leaders already track. Common options include conversion rate, average order value, customer lifetime value, churn rate, NPS scores, and employee productivity metrics. The goal is to connect UX metrics to business KPIs, not to create a separate measurement system.

How do I get leadership to care about UX ROI? Stop talking in design language and start talking in business language. Translate your work into the KPIs finance and sales already care about, set a SMART goal tied to one of those KPIs, and show the before-and-after numbers. A concrete example like "our UX project added $252,000 in revenue" lands very differently than "we improved the user experience."

Do I need a big budget to start calculating UX ROI? No. You can start with the data you're already collecting, whether that's Google Analytics, customer surveys, or sales funnel data. Set a baseline, define a SMART goal connected to a business KPI, and track the change. The math itself is simple. The harder part is building the habit of doing it consistently.