Two Steps to Eliminate Churn
Product quality is one of the key factors that influence customer churn. Churn is the rate at which customers stop doing business with a company. Customers expect products to meet their needs, perform well, and be reliable. When products fail to deliver these, customers become dissatisfied and switch to competitors. According to a study by Userpilot, 40% of churned customers cited poor product quality as the main reason for leaving. Another study by Devsquad found that product quality has a direct impact on customer satisfaction (CSAT), which is a measure of how well a product and brand satisfies customers' needs. The higher the CSAT, the lower the churn rate. Therefore, improving product quality can help reduce customer churn and increase customer loyalty. User Centered Design is one way to increase quality to a level that eliminates churn.
User Centered Design (UCD) is an approach to building products that focuses on understanding the needs, preferences, and context of its users. UCD aims to capture and address the whole user experience, not just the functionality or appearance of the product. UCD involves users throughout the design process, using various research and design methods, to create and deliver solutions that are intuitive, accessible, and satisfying for them. UCD is proven to have a significant impact on product quality and customer churn. Companies with a mature user-centered design culture consider users in every product development workflow and reap the benefits of this focus in the marketplace. Companies like Airbnb, Mint, Uber, Google, and Apple owe much of their success to their user-centered design approach which, without a doubt culminates in exceptional user experiences. One core tenet of UCD is UX Research. Let's look into two key components of UX Research: Generative and evaluative research and see how they elevate quality and reduce customer churn for long-term growth and success.
What is Generative Research?
UCD often starts with generative research, also known as discovery. Generative research aims to reveal new ideas, insights, and concepts for designing a product with awareness of user needs, problems to be solved and work to be done. Methods for this research involve collecting qualitative data from users through techniques, such as interviews, ride-alongs, shadowing, and ethnographic studies. Generative research helps designers understand user motivations, behaviors, workflows, and goals. To create solutions, designers need intimate understanding of root problems facing users. Therefore, generative research is usually conducted before creating any prototypes or solutions. Approaching this research with an open mind absent of preconceived assumptions, we can accurately define and organize our users' mental models for specific workflows and processes. Designers use this knowledge to guide decisions throughout the design process. This approach leads to products that are more intuitive, user-friendly, and ultimately more successful in the marketplace because they operate in a way that matches the expectations of their users.
What is Evaluative Research?
UCD is an iterative process. Designs are evaluated and refined based on user feedback and testing. These activities are evaluative research, also known as usability testing. Where generative research gives us insight into how users expect to interact with the software, evaluative research tells us how they actually interact with the software being built. By testing the usability of a software product early and throughout the design process, we can identify and address potential usability issues before any development resources are committed to building it. This, the "upfront" side of evaluative research, means improvements are made before incurring high development costs where usability issues would have manifested as bugs. Depending on where in the software lifecycle a bug is fixed, the fix could be 5 to 100 times more costly than modifying a design mockup. Evaluative research ensures released product is more user-friendly and less likely to cause frustration or confusion for users. Evaluative research does not end at release. Performing evaluative research after release will determine if the goals of the product or feature were actually achieved. Continuous usability testing is a sign of a mature UCD culture that will consistently output high-quality products with minimal churn.
What is the ROI of UCD?
More and more research is backing up the value of UCD and research in the product lifecycle. According to a study by the Nielsen Norman Group, User Centered Design can lead to
- 75% reduction in development time
- 50% reduction in development costs
- 33% increase in user satisfaction
In 2015, the Design Management Institute and Motiv Strategies teamed up to look at design-focused companies' performance. The study findings showed that over the preceding 10 years (2005-15), design-led companies maintained a significant stock market advantage, outperforming the S&P by an extraordinary 219%.
Simply put, when a company functions with high UCD maturity, three things happen:
- They build things right the first time
- User satisfaction increases significantly
- The resulting customer loyalty makes the company a long-term market leader
Together, UCD and its associated research activities create a company culture where user needs are considered in every decision throughout the product lifecycle. The resulting product achieves quality that meets or exceeds the expectations of its users. When users feel heard and valued and experience the result in a product, they become committed to the product and the company that provides it. This commitment eliminates churn. Studies dating as far back as the early 1990's have repeatedly shown the benefits of using UCD principles. As your company moves toward a mature UCD culture, it will enjoy an increasing competitive advantage in the marketplace.