What Are ROI and KPI?
How are key performance indicators set to measure performance reliably and intelligibly? You determine the correct metrics by knowing its purpose, goals, and results for the selected process, and by setting target targets.
In this article, we will cover the following topics:
- What are KPIs?
- What is the difference between KPI and ROI?
- Why should you measure UX KPIs?
- Why is it important to measure the right data?
Ready? Let’s go!
Why should you measure UX KPI’s?
Most companies have slowly but surely arrived in the 21st century, collecting large amounts of data every day. But by no means all data are relevant.
Many organizations use metrics such as visitor numbers to assess the success of their website. You think: more visitors → more success → everything in the green area.
But are the KPIs really measured, which effectively “move the needle” and make the company more successful? Or are they so-called Vanity Metrics that feel good but don’t really benefit?
Moreover, it’s amazing how many design decisions are still being made today without basing them on UX KPI data. For example, your conversion rate could suffer from increasing the number of form questions on a login page from six to nine. If you don’t continuously measure the relevant KPIs, you’ll have a hard time identifying such issues on time.
What are (UX) KPIs?
KPIs (Key performance indicators) translate the success factors of your project, department, or company into number form and bring successes as well as failures to light. The performance indicators are usually different for each project and should always be defined individually. For example, the KPIs relevant to Superman could be:
- Rescued people per hour
- Flight time until arrival at the crime scene
- Clothing change time in nanoseconds
For the sales department of a company, the conversion rate (e.g. 10 customer visits → 2 contracts) is often very relevant.
The genus of UX KPIs differs from other KPIs in that they have the difficult task of bringing human behavior, opinions, and sensations into numerical form.
UX aficionados distinguish between behavioral and attitudinal UX KPIs:
Behavioral UX KPIs (what they do):
- Task Success Rate
- Time on task
- Search vs. Navigation
- User error rate
Attitudinal UX KPIs (what they say)
- System Usability Scale (SUS)
- Net Promoter Score (NPS)
- Customer Satisfaction (CSAT)
KPI and ROI – what’s the difference?
Using ROI and KPI, companies can measure how successful they have been in achieving a specific goal.
The ROI (Return on investment) is a purely financial metric and quantifies how successful a project was in its investment. For example, if a company invests 10,000 euros in UX measures to improve its online store and then generates 25,000 euros more revenue in the following year, this corresponds to an ROI of 150%.
KPIs, on the other hand, are self-chosen or defining key figures that translate the success of a project, however, defined, into tangible figures.
While ROI is only a financial metric, KPIs are relevant to almost all employees of an organization, from call center employees to CEOs, and can be applied to a variety of processes and tasks.
Why should you measure the UX KPIs?
There are many reasons to start measuring your organization’s UX KPIs. These are the most important:
KPIs help you position your UX topics and related strategic goals more successfully with the relevant decision-makers in your company. You no longer have to envelop your bosses vaguely and qualitatively with a lot of charm, but can base your arguments on cold, hard facts and numbers.
Without these metrics, it is basically not possible to prove before, during, or after a project whether your UX team’s actions are or have been meaningful. With reliable data, it is also much easier to argue if the ANNUAL UX budget is to be set once again.
If your salary includes a performance-based bonus, you’ll probably find it much easier to prove your “bottom line” effect using KPIs metrics.
As with route planning, you should first find out where you stand before trying to target a destination. Only then can you move step by step in the right direction, no matter how far away from your goal.
With your UX KPIs, you always have a powerful business navigation tool at your hand that protects you from turning wrong and wasting valuable time (and money).
The UX data also allows you to benchmark your project against internal or external reference data sources (e.g. competitors, if data is accessible) and find out where you still have homework to do.
Early warning system
UX KPIs drastically reduce the complexity of large amounts of data and give you quick and accurate information about the “health status” of your product. In the combined totality, the UX KPIs act like pulse, temperature, and blood pressure for a doctor, who can quickly use this vital data to quickly heuristically read for the whole organism whether something goes wrong and should be intervened.
What should be measured?
It is of great importance for the success of your UX actions to measure the really relevant KPIs. Figuratively, it is probably of little use when a doctor measures a patient’s hip circumference to heal his sprained arm.
It’s best to focus on measuring the two or three most important UX KPIs for your organization or project. This way you keep track and do not confuse yourself unnecessarily at the beginning.
There are matching UX KPIs for different goals and projects, which you should measure. Here are two practical examples:
Increase in website registrations
- Time-On-Task (of the login flow)
- User error rate
- Task Success Rate
- Number of clicks per purchase process
Further information on “Measuring UX KPIs” can be found here: measuringu.com/ux-measurement/
You can now find out which are the seven most important UX KPIs and how you can measure them in detail:
The 7 Most Important UX KPIs and How To Measure Them
Rahaf Ebraheem Itechonics - Web Developer