"The easiest ROI arguments are those that come with dollar figures attached, often referred to as hard ROI. For example, when IBM carried out a wholesale redesign of the IBM.com site in 1999, online sales rose by 400 percent the following week. That's easy math."
In these increasingly troubled times, we are forced more than ever before to justify ourselves. it's time for us to learn from usability and figure out how to fight with numbers. After all, if usability says "sales improved 400% by fixing usability problems" the odds are good the information architecture was altered (as well as interface design, etc.) A little backtracking of cases in old copies of Interact, a thorough read of Cost Justifying Usability and we should be able to say, once the information architecture was restructured, customer service calls were reduced by 50%, resulting in a net savings or 40,000 in a two month period. or something like that.
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As someone who is working very hard to produce some real evidence that all of our hard work produces bottom line effects, I found this article both fascinating and frustrating.
A lot of what we're dealing with is a "penny stock" phenomenon. (Stocks often go up or down by 50 cents in a given day. When your stock is only worth 25 cents, a 50-cent increase is 200%, but when it's worth $100, the same increase is only 1/2%. Beware of percentages!)
We're in the middle of a project now where we sold management on the fact that we'd guarantee a minimum of a 10% improvement in revenues. Being that the site already generates $300,000,000/year, this is a bold claim on our part.
But, with our diligence and hard work, we are going to do it. And more importantly, when we're done, we're going to be in a position to tell a lot of people how we did it. (Actually, if you've paid any attention to what we've published and said in the last year, you've got a lot of the clues already.)
There is tremendous pressure to produce ROI. But, it's not as hard or daunting as it first seems. Like anything, you just need to understand the lingo and the culture.
Jared
p.s. Pay close attention to our e-commerce whitepapers if you want some clues. :)
Posted by Jared Spool @ 11/19/2001 02:30 PM pst
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