How to measure ROI for continuous discovery

Change is an inevitable part of life that affects everyone. However, we often overlook the fact that this principle also applies to the products we create and ship. Inexperienced companies tend to rely excessively on initial project-based discovery research to build confidence in their product development. Once the product is shipped, further research is often neglected until the onset of the next project. This approach is not ideal, as it significantly undermines our decision-making, designs, and customers' needs. We should always be open to adaptation, and investing in ongoing research is crucial for achieving this objective.

The continuous discovery approach is an effective strategy to keep up with evolving consumer needs. However, a common challenge is persuading key stakeholders to invest in or support this methodology. A crucial element in these discussions is demonstrating the measurable return on investment (ROI) of continuous discovery. In this article, we'll delve into the nuances of considering ROI in continuous discovery and how to effectively influence stakeholders' decisions.

Start with the business objectives

When deciding on metrics to measure, clarity on your main goal is essential. Avoid the temptation to measure everything; focus on key performance indicators (KPIs) and how they align with your overall company strategy. You can achieve many things, but not all at once – prioritise and focus on what matters most.

Get clear on that one metric you think your feature or product would move. And more importantly, get specific on how much you expect to see it move. Your stakeholders want to see the cold, hard numbers; the less murky it is, the better.

Remember that if the anticipated change doesn’t occur, consider that as valuable feedback to learn from. By being able to continuously talk to customers and experiment, you can deliver product features that do shift needles far quicker than if you had built it all in a silo without customer input. 

Presenting Continuous Discovery's ROI Value

Each company has unique metrics that align with its business objectives and goals. Understanding the metrics that resonate with your stakeholders is vital when presenting the value of Continuous Discovery.

For instance, if you are looking to improve an existing product or feature, some common metrics that can be tracked are conversion rates, customer retention rates, time spent on a page, click-through rate, bounce rate, etc. 

However, these will vary depending on the industry and company focus. An e-commerce platform might prioritize conversion rates, while a social media site might aim to increase user engagement time.

What’s key here is that you’re setting a benchmark for your continuous discovery to be measured against. This key metric is what you base your decision against and what you want to see move with your product choices. 

Other strategies and leading indicators

Here are some examples of easy ways to begin sharing the value of continuous discovery with your stakeholders: 

Time to market: We can show that a shorter development cycle means a shorter time to market.

The 1:10:100 rule: Every $1 spent in research saves $10 in development and $100 after delivery in support costs. Presenting this rule can build trust that the investment now saves much more later. 

Compare product costs of building and reworking pre and post-continuous discovery: Present what the build cost was for the latest feature released. Then show how that cost is expected to change with these new habits. 

Build the right thing quickly: It's proven that when we have a feedback loop with our customers and a team that quickly iterate on features and products, we avoid supporting or building unimportant features.

Team morale and retention: Emphasise how continuous discovery improves team morale, decision-making, and work satisfaction, potentially reducing turnover costs.

The easiest way to adopt this at your company if this is new to your team, is to start slow. This new behaviour won’t happen overnight. But I can assure you that by regularly talking to stakeholders and customers, you can prove the value of continuous discovery and create beautiful experiences for your customers and end users, resulting in you being a shining light for your team.