Companies are investing in user experience (UX) research because they recognize that data is critical to building a successful brand, as Michael Bamberger of Tetra Insights explains.
When the pandemic shutdowns hit the economy, I thought UX research would be one of the first things companies would cut from their budgets. But I was wrong — so wrong, in fact, that a year and a half later, Forbes listed UX researcher as one of the 25 hottest and fastest growing jobs on LinkedIn. Research jobs in this space are expected to continue to be in high demand for years to come.
What I didn’t expect was that the digital business strategy would undergo 10 years of change in less than two years. During the lockdown, businesses across all industries quickly realized that to survive on public health measures and the limitation of in-person activities, they needed to reorient their solutions to prioritize digital customer experiences, as well as s adapt to sudden change in behavior patterns. Millions of dollars started flowing into generative digital user research.
Why research is essential for all types of businesses
Many companies are beefing up their UX departments: Paint company Sherman Williams has a huge user experience research team. Construction equipment manufacturer Caterpillar also has a large in-house research department. Companies that have fallen behind in consumer research have inevitably fallen behind in market competition. In some industries, UX research has become so mainstream that every company in the market employs its own team of researchers.
Back then, product teams were building, learning, then rebuilding. This model represents a huge liability in terms of costs and wasted time – that’s why it quickly becomes obsolete. But through generative and evaluative research, companies are taking the learning and rebuilding phases and building them right into the initial build process, innovating their products multiple times before they even go into production.
Implementing UX research helps brands quickly identify issues faced by their end users and employees when interacting with a digital product. The data gleaned from this research gives developers a deep understanding of their consumer base and helps them quickly implement solutions and smooth their user experience.
Companies can’t afford blind development
The incentives for this kind of investment in research are no secret. Businesses eliminate unnecessary risk and generate millions in long-term savings. A new product development initiative for a large company can cost up to $20 million. That’s a high price to pay for a product that could end up underperforming. Instead, these companies can spend $1 million on front-end UX research to learn before building.
As a recent example, the CNN+ app required an investment of $300 million to build and launch, but it only lasted 30 days. This failure could probably have been identified much earlier through rigorous research and perhaps redirected the offer to be viable.
Your teams will spend less time building the wrong things and instead rely on validation, exponentially increasing the likelihood that your solutions will solve the right problems in the right way. It is cheaper to invest in research and learn from it than to invest in risky product development.
Integration of UX research teams
A big fundamental change in research is that most companies are now integrating their own teams of user researchers instead of outsourcing to agencies. This fact is reflected in the current high demand for user experience researchers. Creating these departments will save money on premiums charged by agencies and will also produce better long-term analytics.
A good researcher can cost a company around $200,000, and with three to five researchers, tools, incentives, and resources, companies will invest seven to eight figures for adequate data. A central research organization within a company can build its own modern agile team (product manager, researcher, developer), which is new in the last five years.
The constant onboarding of agencies is costly and redundant. It also takes a lot of time for each of them to learn your company’s philosophy and workflow. Three research firms that start from scratch have no continuity and prevent your company from building internal institutional knowledge. Quality development, product management work and product marketing are all rooted in and nurtured by research. With in-house teams, research never stops and work can build on existing knowledge and span decades.
Changing the way we create solutions
Digital products are no longer a side initiative or an afterthought. The recent pandemic has made it a priority for businesses. And customers haven’t lowered their expectations when it comes to getting a smooth and painless shopping experience.
As such, every digital touchpoint a customer has with a business needs to be examined and cultivated. Sources of friction and churn need to be identified and resolved. Our employees’ experience in managing these products must also be reviewed to ensure quality work environments and lower turnover. UX researchers make it all possible and save companies millions of dollars.
Michael Bamberger is the founder and managing director of Tetra Insights