We all know it, we’ve heard it repeated over and over. “It’s the user experience that matters”, “we are in an experience economy”. Those of us still attending university have been fed those lines from researchers and teachers so many times, that we almost believe it by default. Although they may be right, one question still remains, why? Why does the user experience matter? We all want great experiences, and we will properly pay for these as well. But will a great user experience make us pay for things?

The short answers is, yes it will. The user experience can very easily become a buying experience. Those of you who have been in an Apple retail store will know want I’m on about. It’s hard to say what exactly makes Apple retail buying experience so much better. Is it the über cool store layout with class staircases and large open areas, or is it the fact that the store is sectioned by what you want to do with the products and not what products they produce? What ever it is, it is working and Apple has set new standards for earnings per square feet in the tech retail business.

This post was not meant to be about Apples retail success, but e-commerce user experience. So I will get back on track. The e-commerce market today is a very diverse field with players of all sizes. It has been so for many years and just like the offline retail business. In many ways retail and e-commerce are not that different. You need great marketing, great store design and you need to provide a great buying experience. But not every thing is the same. One crucial thing that makes e-commerce different from retail is in e-commerce the users is on a buying media. The user is in total control over the situation and if they don’t like what the see, the exit is only one click away. This means that user experience suddenly gets center stage, or at least I think it should. Online retailers spent a lot of money SEO (search engine optimization) and even more on PPC (pay per click) advertisement to get users in their stores, but then what? Well if the user experience in the store is bad, the user leaves and will never become a customer. They won’t even spent time in the shop, they will leave immediately and return to the list of Google search results where there are plenty of others stores to pick from. Now if the users visited the shop from a PPC link that cost 10kr. or 20kr (2 $ or 4 $).  this can quickly become bad business for the shop owner. Had the shop on the other hand provided the user with a great buying experience, the investment in the PPC could have resulted in a sale.

Yes this sounds like a no-brainer but look around, and I bet that you will find that the shop owners do not think link this.

Yesterday I attended an after hours lecture with danish e-commerce expert Henrik Hansen. For those of you who doesn’t know Henrik, he runs the e-commerce consultancy Abilitor and is one of the top boys in the business. Henrik has worked with e-commerce of all sorts, but has specialized in online tourism. From 2002 to 2007 he was known as the danish champ of summer house rentals. Henrik is an old school guy with many years of experience in SEO and e-commerce. Unlike many others in what is now the user experience business, Henrik has the numbers to prove that an investment in user experience can really pay of.

Let me give you an example: This table shows some business metrics from a fictive shop. There are many more metrics that make up a real shop, but this examples shows the impact of the user experience.

In Scenario 1 the store gets almost all visitors from expensive PPC campaigns on Google. The store isn’t search engine optimized and the owners are not getting clicks from referring sites or much direct traffic from users who have heard of the store from friends or… The scenario shows that if you get most of your traffic by paying for it, and can’t turn a user into a buyer, it quickly becomes very bad business.

We could adjust all parameters and get different results, but you would quite quickly find, that the three really interesting parameters are Earning per conversion, PPC clicks, and Conversion rate. If you just adjust the number of visitors, you will either loose more or earn more money. But if you create smarter marketing by improving the SEO or creating intelligent viral campaigns, you can limit your spending on PPC and still get the same number of visitors.

This again should be a no-brainer, but never the less many shop go out of business because they never learn this.

I will finish of with the, in my opinion, most interesting perspective:

If you can get the users to spent money in your shop, you win.

If you spent the same money on marketing but provide a buying experience that results in a higher conversion rate, you can really make a difference in the numbers. In Scenario 4 we did the smart marketing reducing the number ohm PPC clicks, but what really made the difference was the fact that we managed to turn op the conversion rate. Also by utilizing great design, we managed to get the customers to spent more money per visit.

Those in the business knows that there isn’t a secret recipe for creating successful e-commerce. But most will agree that creating a great user experience is crucial for heightening the conversion rate.

Online the user is in total control and you will only be successful if you acknowledge that.

This why user experience really matters and why user experience should be seen in an ROI perspective.

/Jess