Calculating the costs of poor UX design

User experience (UX) can determine the success or failure of any platform. However, the rise and fall of MySpace is perhaps the starkest example—some of today’s tech founders have even cautioned about avoiding “MySpace syndrome.”

At its peak in 2007, MySpace boasted over 150 million users and an impressive market valuation of $12 billion, dominating the social media landscape with more than 80% market share. However, by 2012, its valuation plummeted to less than $35 million, and Facebook soared past a billion monthly active users (MAU).

Such a dramatic decline highlights how poor UX/UI can translate to colossal financial loss and user attrition, emphasizing the critical need for effective UX design to maintain a competitive edge. MySpace's cluttered interface, excessive ads, and inconsistent UX alienated users, driving them to more streamlined and user-friendly platforms like Facebook​.

Mind you, not every app or platform with lackluster UX becomes a cautionary tale of this magnitude—it’s well-documented that MySpace suffered more than ‘poor UX’—the platform has been widely criticized for bureaucratic leadership, failure to innovate, being too lenient about fake users, and other strategic missteps.

Still, its story remains relevant to all product people, highlighting the importance of integrating user needs with long-term strategic vision. Understanding this balance starts with recognizing and quantifying the many costs of poor UX design.

Investing in UX not only enhances user satisfaction and loyalty but plays a critical role in driving revenue growth and maintaining a competitive advantage:

Lost conversions and revenue

When users experience frustration or confusion while interacting online, such as attempting a purchase, signing up for a service, or consuming content, they stop what they’re doing. This abandonment directly results in lost sales and conversions and significantly impacts revenue streams.

For instance, in a 2024 quantitative study, the Baymard Institute analyzed why over 1,000 people in the U.S. abandoned their carts during checkout. Note that answers were normalized by excluding ‘I was just browsing’ as a reason.

The study revealed various reasons for abandoning their carts. However, when the researchers zoomed in on reasons that were solely due to usability problems (excluding unrelated reasons like "high shipping costs" or "payment declined"), they concluded that improving checkout UX could help American and European e-commerce sites recover $260 billion in lost orders. 

Erosion of trust and loyalty

Consistently poor user experiences can erode customer trust and loyalty over time. Users who encounter usability issues or inefficiencies on a website or app may develop a negative perception of the brand.

Undoubtedly, you’ve experienced such a letdown at one point or another with at least one app or platform. However, you might be surprised by how fast one lousy experience can repel users:

In 2018, PwC surveyed 15,000 people from 12 countries using an online questionnaire and face-to-face interviews. The results revealed that 32% would stop doing business with a brand they loved after just one bad experience, emphasizing the importance of knowing your users and designing for their needs. 

Attrition vs. loyalty

Poor UX that leads to attrition (also known as customer churn) is expensive. Not only does it lead to immediate revenue losses from abandoned transactions, but it also impacts the customer lifetime value (CLV).

Analyzing the cost of high churn is a complex (but not impossible) task. An in-depth analysis calls for measuring increased customer acquisition costs (CAC), not to mention related outcomes like dwindling team morale and struggles to retain talent.

According to the Net Promoter Score (NPS) inventor Frederick Reichheld of Bain & Company, if you can retain 5% more customers, their loyalty may increase your profits between 25–95%. 

Search engine rankings and visibility

Seamless user experiences are crucial in improving search engine rankings and visibility. Search engines analyze loading speed, mobile responsiveness, bounce rates, and the ease of finding information to assess user satisfaction and subsequently influence rankings.

Notably, Google’s 2017 report, “The State of Online Retail Performance,” highlights that for every second of delay in mobile page load, conversions can drop as much as 20%. 

Financial benefits of good UX design

Let’s set aside ways bad UX can be a costly detractor momentarily.

Investing in providing an excellent user experience comes with significant financial benefits.

A well-designed user experience reduces friction, making it easier for users to navigate and complete tasks, directly translating into higher conversion rates and customer satisfaction. This seamless interaction fosters customer loyalty and encourages repeat business.

Additionally, improved UX shortens the time to value, meaning users can quickly realize a product's or service's benefits, leading to faster adoption and reduced churn rates. This reduction can be especially pivotal for products encouraging users to switch from a free subscription to a premium (paid) version.

Here are some prevalent but avoidable mistakes to watch out for:

1. Confusing navigation and information architecture

Websites with cluttered menus, inconsistent categorization, and confusing pathways frustrate users, leading to higher bounce rates and reduced user satisfaction.

2. Slow-loading pages and suboptimal performance

Sites burdened with heavy content, excessive scripts, or inadequate server resources suffer from slow load times, discouraging users and negatively impacting engagement.

3. Lack of mobile responsiveness

Platforms that fail to adapt seamlessly across different screen sizes and devices risk alienating mobile users, resulting in decreased engagement and missed conversion opportunities.

4. Inconsistent design and branding

Applications that lack cohesive design elements, such as mismatched fonts or colors and inconsistent branding across pages or sections, can confuse users and weaken brand perception.

5. Poor accessibility features

Platforms that overlook accessibility considerations, such as alt text for images, keyboard navigation options, and compatibility with assistive technologies, exclude users with disabilities, reducing audience reach and usability.

The importance of delivering a great user experience can’t be overstated. No product can afford to ignore its impact on satisfaction, loyalty, and, ultimately, financial success. By deeply understanding customer needs and behaviors and employing tools such as competitor benchmark analysis, usability tests, discovery interviews, and the Kano model, companies can enhance user experiences effectively.

Simplifying user flows and optimizing processes improves UX, boosts conversion rates, and fosters lasting customer loyalty. This strategic investment mitigates the risks associated with poor UX and positions businesses to thrive in competitive markets, ensuring sustained growth and profitability.

While understanding the cost of poor UX is essential, taking actionable steps to improve it is even more crucial. Tap into the top UX research platform today and discover how quickly you can go from interview to insights.