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  • User Experience (UX) Means More than a Good Website for a Business

    Oct 18, 2016

    IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities. Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog has been provided by Jeff Chen:

    User Experience (UX) Means More Than a Good Website for a Business

    When User Experience or ‘UX’ is mentioned, many business people immediately think of tailoring their website to the needs of their target customer. But limiting UX to your website design neglects the multitude of other ways that customers interact with your business.

    A good way to understand this is through the 4 P’s of Marketing framework.

    The 4 P’s are:

    1. Product: A product can be either a tangible good or an intangible service. How can the product and features be tailored to best appeal to a targeted customer?
    2. Price: How should price for a given product offering be set to maximize revenue or sales volume among other considerations?
    3. Promotion: How should the product be promoted to bolster its perceived value relative to competitive offerings and increase sales?
    4. Place: Where and how is the product sold? In addition to physical selling locations, place also includes digital sales channels including websites, mobile and email.

    Based on this framework, optimizing website UX only addresses the Place element of the 4Ps of Marketing. I’d like to share a recent experience that illustrates why the user experience your business provides in terms of Product, Price & Promotion can affect consumer preference for your products or services relative to those of your competitors.

    In addition to being a UX researcher, I also own Dirt Merchant Bikes (http://www.dirtmerchantbikes.com/) which is a specialty retailer of high-end mountain bikes and components. Shipping is a significant part of my operational expenses and can easily yield 2-3% of additional margin. The key companies that I most use for shipping are FedEx and US Postal Service (‘USPS’). In terms of the quality of these companies’ “product” for small business shipping, these are my perceptions:

    FedEx: More preferred product for me.

    • Web interface is the easiest to use of these three companies for both creating shipping labels and for tracking.
    • FedEx Office store locations with long hours (typically 6am to 12 midnight or open 24 hours a day) can do anything that that a FedEx agent at a FedEx shipping center can do.
    • The wait to get service either at a FedEx staffed location or by phone is short.

    USPS: Less preferred product for me.

    • The Web interface is somewhat difficult to use for creating shipping labels.
    • USPS offers no in-person customer service for small business shipping. Creating labels for shipping through a business account has to be done via the Web portal
    • The interface for tracking packages is good.
    • The postal service generally delivers within expected timeframes, but sometimes fails to do so.

    For my purposes, FedEx has the better product that is both easier to use and is more predictable in terms of shipping time, but up until earlier this year I had greater usage of shipping via the US Postal Service. The key drivers for me to use USPS were their ‘typically’ faster shipping with their Priority Mail product at a similar or lower price than FedEx. I say ‘typically’ since I’ve found that USPS is sometimes not reliable in meeting their stated delivery dates. USPS indeed do emphasize that their expected delivery dates are not a firm commitment.

    USPS made ONE change earlier this year that caused me to shift just about all of my shipping spend to FedEx: USPS raised their prices on Priority Mail package shipping. Their prices are now often higher than FedEx’s Ground shipping prices. Though USPS generally does deliver packages in 2 or 3 days, my perception is that the USPS Priority Mail product is not as high quality as guaranteed 2 or 3 day delivery from FedEx or UPS. By shifting their prices to be higher than those for FedEx Ground, my preferences have now shifted to FedEx’s product. My perception is that USPS misjudged how much customers would be willing to pay for its Priority Mail product and priced it to compete with competitors’ 2 & 3 day express delivery products rather than their Ground delivery products.

    Taking a higher level view of this change, USPS had three separate opportunities to better understand their customers’ perceptions & preferences:

    1. Product:

    a. How did existing Priority Mail customers view the strengths and weaknesses of that product compared to competitors’ offerings?

    b. Was Priority Mail competing against competitors’ ground delivery services or their more premium 2 and 3 day delivery services?

    c. What would USPS need to have changed from a product perspective if they wanted Priority Mail to have competed more effectively against competitors’ premium 2 and 3 day delivery services?

    2. Price: For the existing Priority Mail product, what was existing customers’ sensitivity to changes in price before they would elect to shift to competitive shipping services?

    3. Promotion: What could USPS have done from a promotion standpoint to have increased the perceived value of the Priority Mail products to better support higher pricing?

    As it stands, I don’t believe USPS took any of these steps other than to raise pricing on their Priority Mail product. Though the dollar value of my shipping is relatively low for USPS, multiplying that low dollar amount by millions of small business customers who also switch their preferences for shipping providers can result in a multi-billion dollar change in revenue for USPS. In today’s highly connected world, barriers to switching providers are becoming increasingly low. Mistakes in optimizing customer experience are quickly shared via digital channels to multiple customers who in turn react quickly to find better value solutions.

    To maximize sales, UX now needs to mean more than just a well-functioning Web site. Taking customer perceptions, attitudes and preferences into account is a prudent consideration in deciding how best to connect with prospective customers via Product, Price, Promotion & Place. Modern UX research offers multiple ways with both qualitative and quantitative data to understand how customers are likely to respond to changes in business strategy or execution. Reach out to us at info@ignite-ux.com to book a free 30 minute consultation on how we can accelerate revenue growth for your business.

    Postscript: The US Postal Service has now lowered their price again on certain services. Unfortunately for the Postal Service, most of their customer that left due to their price increases probably are not aware of this. I was only aware of this as I use ShipStation, a 3rd party shipping software, that allows me to quickly compare pricing between USPS, FedEx, UPS and other shipping services.

    IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

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