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May 8, 2017 /UX/UI Design /

Why More Companies Are Putting Big Money Into UX

The case for user experience design is becoming an increasingly important part of many organizations’ strategies, which might explain why so many UX agencies, firms and platforms have been acquired in recent years and why UX designer salaries far surpass that of the national average.

Acquisitions are typically an indication that a company sees an opportunity to enhance its own product offerings by purchasing another company that specializes in those missing links. Take a look at this list of acquisitions of UX agencies, firms and platforms that have occurred in 2017 alone:

  • Capgemini closes its acquisition deal of Idean, an experience design consultancy firm, for an undisclosed amount (source)
  • UK-based Tangent acquires London-based UX firm Decibel Digital for £1m, approx. $1.3 million US (source)
  • WalkMe acquires usability platform Jaco for undisclosed amount (source)
  • Digital agency Zone acquires Head, another digital agency that specializes in UX (source)
  • Broadvoice acquires XBP to improve UX of VoIP-enabled devices (source)
  • Ad agency HY Connect acquires Merge Design + Interactive (source)
  • Digital agencies Questus and Velowerks form strategic partnership with UX at the core (source)

There are probably many more deals in the works, and maybe even some we missed, but the range of companies acquiring UX-focused businesses suggests an overall recognition and shift in perception on the role UX plays in business.

Ron Bess, the CEO and President of HY Connect, said the acquisition of Merge Design + Interactive takes their “offerings to a whole new level—a skillset combining creativity and technology not found in most other advertising agencies.” Jim Murphy, CEO at Broadvoice, said a similar thing about the acquisition of XBP. “This acquisition combines our award-winning customer service and XBP’s streamlined technology platform into one unbeatable offering for a match-up that solidifies our laser-like focus on delighting our customers,” he stated in the press release.

Central to these acquisitions is the notion that an increasing number of organizations are acknowledging how crucial UX is to the overall customer experience, customer retention and ROI.

An Investment in UX is an Opportunity for Increased ROI

Andrew Kucheriavy, founder and CEO of Intechnic, argued in a recent article published in Forbes that the business case for UX is “a matter of survival.”

In his piece, he talked about how companies that refuse to embrace UX will be outdone by their competitors. He compared the failures of MySpace to the success of Facebook noting that, “Facebook trumped MySpace with its superior innovation and user-friendly service — the same user-friendly service that other brands like Google, Amazon and Airbnb have used to propel them towards global success.”

Just look at the stats. Kucheriavy referenced recent research from Forrester that showed, “on average, every dollar invested in UX brings 100 in return. That’s an ROI of 9,900%.”

Another study, conducted by the Design Management Institute, analyzed 16 publicly traded stocks from design-centric companies based on a set of criteria called the Design Value Index, which includes criterion such as “design operates at scale across the enterprise” and “design sees a growing level of investment to support its growing influence.”

They found that the organizations that meet the Design Value Index showed “a 211% return over the [American stock market index] S&P 500. This marks the third year in a row we have seen such results in excess of 200% over the S&P,” the report said.

Designs’ influence could be felt in more than just the stock market rankings. The report said that companies that embrace and invest in design also showed, “a highly integrated and influential force that enables the organization to achieve outsized results.”

UX Designer Salaries Reflect Commitment to UX

While UX is good for ROI, a company that believes in the power and potential of user experience design is good news for UX designers as well. This commitment can be spotted in the salaries a company offers.

When examining the average salaries of user experience designers in America compared to the national income average a significant contrast emerges. UX designers reported making an average of $90,528 in 2015, with a median salary of $83,000, according to an article that appeared in The Next Web that examined self-reported data contributed by designers from around the world. Both salary averages were significantly higher than the median average household income in the United States, which was $55,775 in 2015, the latest year for which complete data is available.

Compare that to the self-reported salary data posted on Glassdoor.com, and UX designers report earning an average of $87,883 in 2017.

However, it should be noted that salaries vary vastly across the country with many of the highest salaries reported in San Francisco and New York and the lower salaries reported in Philadelphia and Orlando. Salaries range based on a number of variables including your experience level, the company you work for, the area/location you work in and the perceived value of UX in your industry and organization.

What Does This Mean for UX Design and Designers?

The success of UX depends on how willing a company is to invest in UX. Getting key stakeholders on board can be a challenge, but it’s crucial they understand, “the short and long-term benefits of UX to the business,” Kucheriavy said in his Forbes piece.

Kucheriavy makes a big argument for data, saying that when leaders rely on their own experience and intuition rather than listening to their users and understanding the data that supports UX decisions, they’re destined to fail and “will continue to do so until executives start putting their customers’ opinions first.”

All of this indicates that companies and designers that recognize the relationship between user experience design and business growth are the ones who are more likely to find increased profit, customer retention and a brighter talent pool. Those who see this are ahead of the game, are already acquiring the talent they believe will bridge that gap between them and the customer experience, and investing in UX and design across the organization.

Where does UX fall on your company’s list of priorities and what impact have you seen if have on the success of your business?

UX/UI Design

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