How to Better Connect Research to Revenue

Published:

May 6, 2024

Last Updated:

May 6, 2024

When research teams have impact, they create tangible benefits for their stakeholders, customers, and the wider business. Teams big and small are thinking about how to generate more impact, hoping to influence more decisions throughout the organization.

Those tangible business benefits can be the most elusive. Knowing what drives the entire company can feel ambiguous and difficult to work against. Claudia Natasia has spent a lot of time thinking about one element of business impact: revenue. She has worked in finance, led product teams, and recently founded Riley, an AI startup. Each of these experiences helped her recognize and grow the important relationship between research and revenue.

She joined a special live episode of the Awkward Silences podcast to discuss what revenue means for today’s research team and how UXRs can start creating this kind of impact today.

‍Watch the full conversation here.

Create and maintain a revenue mindset

Research is important to any business. Activities like talking with customers, analyzing product data, and conducting exploratory or discovery studies all help the business identify growth opportunities and friction points standing in the way of that growth. Too often, Claudia maintains, researchers forget that fact, feeling isolated from more “business-centric” parts of a company (like sales or marketing).

The first step to creating a connection between revenue and research is recognizing that research is critical to revenue generation. The feelings of isolation can happen in companies big and small. Sometimes it is a function of how the company is organized, with a user researcher being embedded on a specific product team within a larger product department.

That can create a feeling of “distance” between the humming (and invisible) energy of revenue and research, but Claudia says we need to close those perceived gaps or silos.

Even if you are a smaller organization under different departmental layers, realize you are still in fact part of the business. And as such, you need to have the same amount of desire to learn about the objectives that are driving the business. Not just the product goals—the business-level ones. What metrics or signals is your business using to move forward? ~Claudia Natasia

Learn what revenue means to the company

Although the literal “revenue” is likely the same across companies—currency earned through products and services—the way that revenue is earned might not be. Your company’s business model (e.g., do you sell subscriptions or bill for service hours?) and the stage of your company’s maturity (e.g., early-stage or growth-stage) will affect the “how” of revenue, too.

Claudia offers two examples:

A newer company might be focused on customer acquisition and more specifically, the average amount of revenue (money) each new customer account brings. This is sometimes called the “average contract value” or ACV.
A more established company might be focused on expanding existing customer relationships, increasing the “lifetime value” (LTV) of each account, while at the same time reducing the amount of customers who opt not to stay customers, or “churn.”

Need help finding your company's revenue goals? Check out these assets and documents for help:

All-hands decks
Earnings calls
Product roadmaps
Sales goals
Financial reports

Connecting with colleagues who might have access to these artifacts not only helps you make friends on more revenue-visible teams, but it gives you an influential audience when it is time to share out your next research results (more on that below).

If you know that your research findings won’t have an immediate revenue impact, start socializing before the study is even finished. Give stakeholders a rough time horizon of when results might start to show in whatever revenue stream is implicated. You could say “I envision average recurring revenue will go up after six months of this new product launch.” ~Claudia Natasia

Design research to influence revenue goals

With a clearer idea of what revenue means to your company and the ways it seeks to measure that revenue, you can begin designing research projects to help your company and teammates reach those goals.

If a company needs to acquire new customers, maybe discovery methods are called for, such as developing personas or segments . Or, if a company wants to attract more existing customers to use a new feature, evaluative methods like usability studies might identify optimization opportunities.

In this way, you are baking revenue considerations into the rationale for your research methodology. It should not change how you approach a persona or usability study, but it can help you create a more revenue-minded frame when sharing findings.

If, for example, you discover a new persona whose needs are unmet, that is a missed revenue opportunity in addition to being a product one. Injecting your readouts with this mindset will build more action into your results, because you are reminding colleagues of the risks associated with inaction: namely, lost revenue potential.

If it is difficult to draw a line between user research outputs and traditional revenue, here are other revenue-influencing metrics worth tracking:

User session times
Stakeholder decision times
Sales cycles
Rework reduction
Operational efficiency

Be clear about your revenue impact (and socialize it)

One of the most challenging parts of connecting user research to revenue is the lag between research results and documentable, tangible revenue impact. A persona study might open the doors for new customers, but those accounts might take weeks or months to close. Claudia urges researchers to remain patient, and to build-in longer time horizons into their hypotheses and questions.

In addition to building clear timeline expectations into your research’s design, providing regular progress updates to stakeholders can help you stay top-of-mind with decision makers. Claudia advises researchers to discuss the rationale for a research project, what is being learned, and how those learnings feed the business’s longer-term revenue goals.

Create a summary of your high level insights. My team calls it a “skim.” Start with the business objective that everyone cares about right now, and then list all of the insights research has produced that tie into that objective, that help everyone move toward it.

This helps you generate a presence with division makers and influencers. It might not happen right away, but being consistent will remind executives what research is for and how important it is. ~Claudia Natasia

Make sure the colleagues and stakeholders you connected with to learn about important revenue streams before starting a project (remember from above?) are also included on these updates. This way, you are closing the loop and showing how reliable and valuable a partner user research can be—not just for product decisions, but for the bigger business ones, too.