Why Understanding Business Models is Important to Interaction Designers

Jared Spool

September 25th, 2008

Interaction design is hard enough to do when the business model is clear. When the designer knows exactly how making a better design will increase the value of the company, (thereby increasing the chances they’ll get a raise if they do a good job,) it’s still hard to know what to do.

All one has to do is look to Apple to see how this works. When iTunes 6.0 came out in January of 2006, they introduced a feature called the mini-store, which, for all practical purposes, bombed.

This past month, in iTunes 8, they reintroduced the same business model, this time with a different interaction design called the Genius. It looks like this new design of the old mini-store is going to be a big contributor to Apple’s next year of revenues. (How much? Well, they are now selling more than 1 billion songs each year. The Genius functionality could easily add another 20%-30% on top of that.)

Some model, different design, huge increase in revenues.

When the business model doesn’t match the user experience or (as was “discussed” in the IxDA.org insane-people’s-death-match thread) when nobody seems to understand what the business model is, the designer can’t know if they are helping or hurting the company by creating a better experience for the user.

Creating a great experience can be an expensive investment. Unless the designer can clearly show the value of that investment, they’ll be constantly fighting the forces of reducing costs to increase profitability. It’s always cheaper to produce crap, so if you don’t understand how quality factors into long term profitability, crap is what will win.

Designers that can’t talk to value in the business model also can’t explain why they themselves should be on the payroll.

This is why understanding the business model is essential to good interaction design.

[Thanks to Robert Hoekman for encouraging me to make this into a blog post.]

10 Responses to “Why Understanding Business Models is Important to Interaction Designers”

  1. Eric Fields Says:

    Couldn’t agree more.

    As a designer, I love talking through the business application of landing page X or feature Y. I’ve encountered moments where a half hour of explaining and question asking has gone back and forth and suddenly there’s an air of confusion in the room, and I’m not always the confused one. You sometimes help a client find a small hole or two in their model, so you talk out how it might be able to be fixed this way or that way. There’s a chance that at the end of the meeting, I’ve helped him figure out a missing link of sorts. Now I know I’ve got a client for life.

    To know the business is to know the design. When the client knows you know the business, then he or she will have total confidence in your work.

  2. Rahel Bailie Says:

    So right! Having a UX that matches a user’s cognitive model makes all the difference, as does having an interaction designer who understands business. In the world of “provide a service and show ads” as a revenue model, it’s easy to forget that there are many other business models that exist, and need to be understood. The rhythm of other market sectors are quite different, and understanding the processes, motivations, and requirements are often better understood by those who have had experience in the old-school sectors. There’s nothing like having worked a shop floor, in a manufacturing plant, or a distribution centre to have a deep understanding of the business model – a great shortcut, if you will, to getting to the tough questions…and answers.

  3. 2008 September 25 - Links for today « My (almost) Daily Links Says:

    [...] Jared Spool enlightens us with Why Understanding Business Models is Important to Interaction Designers [...]

  4. Daniel Szuc Says:

    Sometimes we assume the business understands their business and the business model. Often they don’t – scary but true.

    Just as its important to validate design decisions about what you know about the customer, it can be just as refreshing to revisit assumptions the business is making about their own business.

    Unfortunately, discussions sometimes turn into “design by committee” and the framework of business and customer discussions disappear quickly.

  5. Miskeeto Bytes » Business models and interaction design Says:

    [...] From the article: “Creating a great experience can be an expensive investment. Unless the designer can clearly show the value of that investment, they’ll be constantly fighting the forces of reducing costs to increase profitability. It’s always cheaper to produce crap, so if you don’t understand how quality factors into long term profitability, crap is what will win. [...]

  6. nortypig » Blog Archive » Understanding Business Models Says:

    [...] Jared Spool briefly explains why understanding business models is important for interaction designers. [...]

  7. Panda's Thinking & Practice » 设计是需要简化再简化的,渐渐理解Jobs为什么“暴君”了 Says:

    [...] 和有些交互设计师讨论设计,我常常觉的他脑子里只考虑页面信息的呈现逻辑和功能上的交互,会忘记用户的目的和用户的行为,讨论中,经常会变成说两件事情,这是我比较害怕的。交互设计师只考虑交互,那是件很恐怖的事情,UIE Brain Sparks也在说这个事情 http://www.uie.com/brainsparks/2008/09/25/why-understanding-business-models-is-important-to-interact… 。 [...]

  8. Weekly Points of Interest 2008-10-03 at Experience Matters Says:

    [...] Why Understanding Business Models Is Important To Interaction Designers [...]

  9. Sarah Garnsey Says:

    It shocks me when web “designers” don’t have any real interest in understanding the design of business.

    As Eric Fields and Daniel Szuc point out in their comments, the best partners not only get it, but can add great value as a result. My experience has been that some clients — for whatever reason — sometimes fail to understand their own businesses well enough to work effectively with their web partners. Perhaps they just can’t see the forest for the trees, or maybe they’ve never needed to dig deep before. But as a friend and colleague once told a clueless internal customer, “You need to understand, the website can’t miraculously solve your business problem; it can, however, magnify your dysfunction.”

    If you’ve got the right skillset at the table, the site or application design process can (and should) expose business processes to the light of day, driving improvement, promoting efficiency and revealing new opportunities. And what could be better for business than that?

  10. Interesting reading « Notes from the web Says:

    [...] Interesting reading Why Understanding Business Models is Important to Interaction Designers » UIE Brain Sparks [...]

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