Good design always moves a product in the direction of value.
Use the x-Factor to magnify your product’s value.
The purpose of design is to create value. Think about it this way. Why does design cost money? Because great design makes any product more valuable. When managers hire designers, the smart questions to ask are: What valuable result do we want from design? Should a product be redesigned?, Why and how should I spend on UX to get value from design work? Design is only valuable when it is directed at clear goals. In this article, I hope to help design managers get the best value in directing designers and to help designers be heroic contributors to business value.
The risk of not taking design seriously
Customers will pay more if you increase product value, but there’s always the risk of commoditization. If high-volume competitors make something similar for less, your product becomes a commodity where price is the only differentiator. You’re at risk in the same way retail was destroyed by Amazon, Costco, and Walmart.
All software risks becoming commoditized. Competition isn’t the problem. It’s clinging to the idea that product value is based on what it does, not on how it does it. Tech companies don’t need Walmart to commoditize them, they do it to themselves by treating their products as just a set of functional components. Good design can stop your product from being devalued and commoditized.
Could your product be worth more?
Yes. If users perceive more value, you can charge more, instill loyalty and sell more products. Let’s start with a simple formula for value.
Trying to increase value by adding more features is dead wrong. Adding features often makes something less valuable.
We tend to think of a product’s value as the sum total of features we offer, as below:
value = features
However, adding more features isn’t inherently valuable. Doing a few things really well is valuable.
more features ≠ more value
What is the x-Factor? a value multiplier
The way your customers interact with your products forms an experience (x). Is it a great one or does it suck? The experience determines how much they value it. I call that the x-Factor. X-Factor is high when using the product is a great experience. Is it great to be your customer, or is it merely ok?
value = features × experience
(value = features × x-factor)
A good or bad experience completely colors the way customers value product features. It doesn’t matter what you offer if the experience sucks to use it.
An x-Factor example
Consider dinner as a real world example. Tell your spouse you’re surprising them with a romantic dinner. Should you make the insane choice of taking them to McDonald’s (option A) or choose option B, your spouse’s favorite classy restaurant with a favored table by the sea timed for sunset. Option B is obviously worth more, but what are you really paying for? You go out, eat chicken and come home. Unless your spouse finds fast food romantic, what you’re paying for is the superior experience of Option B.
These two extremes point out something important about design. For a supposedly romantic surprise, she won’t be thrilled by a pedestrian restaurant like Denny’s or TGI Fridays. At best, it will be forgettable and at worst, memorably disappointing. Most software products are commodities (it’s all about price) or pedestrian (utilitarian, with window dressing). In both cases, the customer won’t value your product highly, be loyal or rave to their friends to use it.
This applies to you
People used to get fast food from mom & pop diners. Fast food chains destroyed their market by commoditizing it. If you think your software is valuable only because of what it does, you are vulnerable to cheaper, faster competitors on the low end and sophisticated competitors on the high end doing what you do with a better experience. For example, Stripe quickly climbed to #1 in online payments based on better experience. Even in a dull category like payments, experience is king. As it is absurd for McDonald’s to compete with fine dining, it’s just as absurd to ignore the experience x-Factor in your products.
Better design = higher value
dictionary definition:
x-factor: “a variable in a given situation that could have the most significant impact on the outcome.”
If you want your products to be highly valued, design to improve the experience (x-factor) for customers.
Most software is merely serviceable, built by developers, with a pretty UI applied at the end. McDonald’s and Subway are serviceable. Serviceable isn’t great, so it only rates an experience (x-factor) between 20% and 50%. Ergo, most software products are only worth 20-50% of their inherent value to customers because the experience is merely serviceable.
A design’s x-Factor
has the most significant impact
on business success.
Don’t pretty up a serviceable product
If you recognize that experience is important, don’t just throw money at design.
Making a hard-to-use product prettier only makes the bad usability stick out more.
Great design always has great flow.
If software has a lousy experience (an x-factor < 25%), many companies put effort into making it pretty while ignoring the root problem. A prettied-up McDonald’s is a bit better than an ugly one, but it is still just a low value fast food joint.
If you want customers to like or love your product, you need a designed experience.
Great design goes deep, beyond the look of things. A strategic UX plan makes best use of designer and coder time to get the best results.
When I am working on a problem,
I never think about beauty but when I have finished,
if the solution is not beautiful, I know it is wrong.
-Buckminister Fuller
True UX design: a strategic approach to results
User experience is all about the users. Who’s the product for? What do they want to do? What actions have business value? Why will they care? Graphics design is wasted when these questions are unasked and unanswered. The core of UX is determining what will get better results and then measuring and iterating. Great UX is a holistic approach to value.
The ux-factor is a
holistic approach to value.
Product design has evolved proven methods for success with User-centered design (UCD) and Design Thinking. Good UX produces tangible superior results.
For example, a cup of coffee contains only 2 cents of coffee beans. Go to a grocer and you pay about 25 cents for the same beans in a package. Go to a diner and you’ll pay a little over $1 for the same beans brewed in a cup. Yet people wait in line to buy fancy lattes at Starbucks for $5-$10. It’s the same 2 cents of coffee, but the x-factor and profit margins are enormous. It’s not the coffee. It’s the experience.
Use Experience-focused design to move up the value chain
Product design with a focus on experience allows you to move up the value chain. Be the Starbucks of your product category, able to charge higher prices while increasing customer satisfaction and loyalty. Good UX design harmonizes the customer needs with your business goals. That’s how it creates value.
What do you know about your customers? Why, when, & how do they use your product? What’s important to them? What would make the experience better? What would ruin it? You need to understand your customers to design effectively. Define important customer segments as personas and focus design on their needs.
What if I want to sell my products to *everyone*? Isn’t that what Apple does? No, they don’t. Trying to make all possible customers equally happy is a way to make nobody happy. Successful companies focus design on a few key personas.
The UX-Factor
Target the most important features for the most important customers. Every feature takes work to design, implement, document, maintain, and support. Personas help you choose what to focus design and dev time on and what to cut.
Get more product value from less work time.
If you don’t know and target customer needs, you produce a low-value serviceable experience “x”, no matter how pretty you make it. “ux” magnifies value by making your product a perfect fit for customers. The ux-factor is a strategic design focus on user needs.
value = features × user experience (ux-factor)
ux VS UX: Authenticity is valuable
Talk to real users to get powerful results from targeting user needs. The following just doesn’t work: “You don’t need to talk to users. I know who uses our product and what’s most important. I am the target market.”
If you work at a company making a product,
you are NOT the target market.
Good UX is like good science. Start with hypotheses and then gather evidence to correct your theories. Basing everything on what you think you know is sabotaging the whole design process. Using the product yourself doesn’t mean you understand real customers. Everyone at your company knows too much about the product to understand a real customer, an outsider who doesn’t care what it does or how it’s supposed to work. Customers want to know as little as possible to use your product to get something done. User research allows us to empathize and design for people who aren’t us.
Design based on guesses is “ux”, whereas design based on authentic user research and analysis is “UX”. Authentic understanding leads to superior designs with superior results. It’s a small investment for a big return. It costs 7 times as much to gain a customer as to keep one.
The question is then simply “How valuable do you want your products to be?”
How should I spend money on Product Design?
Let’s look at the best UX activities for a return on investment (ROI). The more specific your goals, the more effective UX can be.
- Goals
Define your goals as business outcomes, ideally following Peter Drucker’s SMART (Specific, Measurable, Achievable, Relevant, Timely) principles. If you don’t know what you want, you won’t get it. - Research
Understand and segment your customers. A little research will yield authentic personas, task lists and context. - Analysis & Wireframe
Analyze the research strategically to produce user flows, KPIs, and wireframes. - Implementation & Detail
As developers plan and implement code, designers work out a style guide, micro-interactions and visuals to make it look awesome. - Ongoing Testing & Iteration
Repeat steps 1-4 to go from bad to good or good to awesome. Test and iterate to stay in tune with changing needs and increase value over time.
Specific gains from investing in your product’s experience x-Factor:
- retain & satisfy existing customers
- gain new customers, sell more services
- raise profit margins & top line revenue
- grow virally with good word of mouth
How NOT to spend money on Product Design
- Don’t skip research. Really.
Steps 1-3 should be quick, but never skipped. Test your assumptions and make a plan. Step 4 is pointless on its own. - Don’t treat design as a step.
Product design is an iterative design process. You can’t “UX it” in a single step. UX is an iterative part of every step (planning, research, ideation, wireframing, prototyping, developing, testing, refining), even for waterfall projects. - Don’t get a jack-of-all-trades.
A product designer is like an architect on an office tower. You wouldn’t hire a top architect and expect them to also lay the bricks, install the plumbing and hook up every outlet, so don’t hire someone who claims they can do it all (coding, graphics, user centered design) equally awesomely. It never works. It’s good if an architect knows about construction, but if he’s more interested in interior design or laying bricks, he’s not a great architect. It’s the same with UX.
Making something pretty is NOT UX.
UX is an end-to-end design process, not a condiment.
UX is a hub, not a silo. A Product Design leader should bring every team member together around the authentic user needs.
Summary – Improve customer relationships
Good products are high value. High value requires a high experience x-Factor. Do it before you get sandbagged by competitors who do it first or do it better.
When customer touchpoints are painful, your products are devalued. Use great design to protect your customer relationships, gain new ones, and grow your business.
Action Steps
Are your company’s products in tune with the specific needs of its customers? In short, what’s your product’s x-Factor? If you don’t know, you are vulnerable to competitors who do.
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Contact me if you need a great UX Design Director/Manager
Also published on Medium.
