THE SEARCH FOR BAD REVENUE
UX professional see poor experiences where other people don’t, and as such, sometimes these poor experiences are money revenue streams for the businesses we work for. However, what a great UX designer should do is search for bad revenue. What does that mean? It means that if and when they find poor experiences across your site that can be improved, and these experiences are generating revenue, they improve the experience that either replaces the revenue, or in the best case scenario, increases revenues all together. A great example of the Search for Bad Revenue concept and the value of user UX professional see poor experiences where other people don’t, and as such, sometimes these poor experiences are money revenue streams for the businesses we work for. However, what a great UX designer should do is search for bad revenue. What does that mean? It means that if and when they find poor experiences across your site that can be improved, and these experiences are generating revenue, they improve the experience that either replaces the revenue, or in the best case scenario, increases revenues all together. A great example of the Search for Bad Revenue concept and the value of user experience in your organization is with eBay.
My professor, who is responsible for allowing a user to upload their first photo for free when they sell an item, saw that users were abandoning the “Sell an Item” flow. She also saw that there were pages and pages of items listed that had no photos and thought ‘Why would anybody want to buy an item that they can’t even see?’ The challenge was this: eBay charged 20 cents per every photo – this generated 8 million dollars for them each week. She felt that if the first photo was free, the user would have a better experience. In order to get buy in for this major change, she did the following:
- She saw a poor experiences that generated money
- She understood the user behavior and emotion based upon data and user interviews/focus groups
- She understood the KPI’s and metrics tied to that particular portion of the revenue stream and how her new design/idea could prove to be a better experience that could replace and generate additional revenue
- She used the insights gained from step 2, and the business acumen from step 3, to test a new approach to a small portion of their online traffic over time.
The result? eBay saw an increase in revenues with the small portion of traffic they tested, and once rolled out to their entire audience, revenues went from 8 million each week, to 36 million dollars each week.
The same happened at Hotwire, where a UX designer felt strongly that the site’s ad revenue banners detracted from the Hotwire brand as it placed competitor ads on their site. Since she felt so strongly, she was tasked with changing the experience but replacing the revenue. Her new design proved to increase revenues by 2000% over 3 years.
Start ‘Searching For Bad Revenue’.
If there weren’t poor online experiences, there would be no user experiences designers so it’s highly likely that there are parts of an ecommerce site where there is an experience generating bad revenues. It may be hard to know where to start with this new concept in the field of UX, so below are a key ways to kick start your approach to finding a bad revenue stream and creating new experiences that generate a higher revenue stream:
- Know a poor revenue generating experience when you see one. This can from a trained eye (the UX designer), from your data, or just a hunch – the eBay example as well as the Hotwire example were individuals who felt strongly about poor experiences. These weren’t usability issues, these simply were gut feelings.
- Determine the goal. In the case of Hotwire.com, brand value was highly important to the designer. In her new design, part of the goal was to restore brand value on the site.
- Know your user and understand their behavior. This can come from behavioral data, but it also comes from doing live usability testing and user research via focus groups and interviews. In the Hotwire example, UX designers sat in countless live usability tests to gain insights about the users emotions and behaviors and in the eBay example, designers flew to various locations to talk to users about how they feel about the current experience at that time. These type of UX tools can help you uncover emotions and behaviors that allow UX professionals to assess and build new experiences/ideas from and/or build out user requirements.
- Look at other industries to gain insight or ideas. Don’t consider just any industry, but think about one where the user has the same or similar behaviors and how can you apply the solution developed in that particular industry into your own? In the case of Hotwire, they looked at Kayak.com. Kayak.com is not a flight booking site, but rather a flight comparison site that takes you to the respected airline that you wish to book with once you’re ready. So rather than placing a Delta.com banner ad that generates revenue in the manner that they used to, Hotwire took the Kayak.com approach of building a “comparison tool” that allowed users to select several different competitors and price compare. The key thing, Hotwire negotiated higher PPC rates. If the user never made a purchase on Hotwire.com, the organization still benefited through the PPC negotiation, but almost always Hotwire had the best price and users came back to make a purchase.
- Know and speak the data. Know and understand the analytics data to understand how your redesign can affect metrics both positively and negatively, which will be most valuable to the executive team.
- Build out the model. Determine how the new design is going to work and how it will generate or replace revenue
- Build out a risk plan. Changing features that generate revenues can be risky business. However, make a plan that spans over a period of time to see how effective a redesigned revenue generating feature will do. Run a/b tests with a small portion of your traffic and roll out the new design slowly over time. From there, assess your revenue growth
The above information doesn’t mean that you assess your whole site to start finding bad revenues. Rather it means be on the look out for bad revenues. Consider this as a way to dig deep into understanding the user behavior and offer better experiences as the solution.