Business Thinking for Designers

Let’s talk quantification!
When numbers do exist, you’re in a great position. Now, 
when you conduct experiments with specific desirability 
measurements, your product partners will be better able to 
calculate viability. Together, these numbers will make a strong 
case in trade-off decisions.
To get a baseline for quantification, let’s look at an equation 
for calculating the percentage of customers a company keeps 
and “retains” over time. To calculate the ROI of Retention, you 
need four metrics:
01. The number of customers you’re targeting 
02. The current percentage rate of retention 

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03. The projected rate of retention 
04. The lifetime customer value of a targeted customer
Pro tip
Once you know what metrics responsible businesses should 
be calculating, you can ask whether or not the numbers exist 
in your company and what numeric goals the organization 
targets.
Figure 4-11: Designing for the ROI of Retention equation by Ryan 
Rumsey

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Using ROI formulas is a great way to validate that math is being 
used and frame experiments for desirability. From looking 
at the formula in figure 4-11, you can identify three crucial 
insights:
• The potential dollars earned for this model is $3.8 million. 
That’s the target for viability. The project costs involved 
should not exceed $3.8 million unless value is created in 
another way.
• 1.9 million customers is a number that typically comes 
from segmentation data. While segments are not 
personas, this audience is where the business assumes 
a competitive advantage can be created. Having a target 
audience allows designers to focus on personas specific 
to that segment and to either validate or push back on the 
assumption.
• Projected and current percentages of retention indicate 
the viability outcome for an experiment. It’s a target to 
test different solutions against and in this hypothetical 
equation, your experiments should test if a desirability 
metric helps increase retention from 10 to 12%.

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