The truth about the ROI of Web Accessibility
This isn’t the first time that I’ve talked about the “Business Case” for accessibility. In 2011, I created a series of about a half-dozen posts on the topic. Some of my thoughts have refined over the years, though the general message remains the same. Here are my updated thoughts on the ROI of Accessibility.
First, to set the stage, we need to understand what ROI is. ROI = (Net Profit / Cost of Investment) x 100. Put in its simplest form, a good ROI increases Net Profit by increasing revenue. In other words, you (the business) spends $x dollars with the goal of gaining an amount that is greater than $x dollars. So, if I spend money and get less back than I put into it, that’s bad.
Increasing revenue is only one part of the picture. It is also possible that an investment now can save us on expenses later. Either way, the calculation is the same: Your ROI is any money that comes back (or, doesn’t leave) as a result of what I put in.
Let’s focus on new money first
Some money doesn’t come back right away. For instance, at Tenon, we keep track of the amount of time it takes for a person to register for an account once they’ve run a demo test on the Tenon site. That time might be several days. We also keep track of how long it takes from the time they register until the time they purchase. That time might be several weeks. Finally, we keep track of the average amount of money they spend once they’ve become a customer. That amount is several hundred dollars for SaaS customers and tens-of-thousands of dollars for consulting customers
Which of these numbers actually matter? Is it the time-to-register? Is it the time-to-purchase? No, the number that really matters is the latter: The customer’s LTV (Lifetime value). That’s our actual true, final gross profit per person.
To track our ROI on any marketing & sales campaign, the number that matters is not the number of demo runs. It is not the number of registrations. It is only the total number of customers acquired multiplied by the average LTV, minus the amount of money you spent to acquire that customer (CAC: (newCustomers * ltv) - costOfAcquisition),
Let’s put this in practice: Let’s say we spend $5,000 in Google AdWords per month. Let’s also say we have an average LTV per customer of $500. In order to achieve a postive ROI from Google Adwords, we’d need to win the business of 11 new customers each month to gain a positive ROI from Google Adwords.
Our cost-of-acquisition needs to be lower than our customer LTV. This is why we need 11 new customers. At 10 new customers, we’d have a cost-of-acquisition of $500 each which gives us $0 ROI.
At 11 new customers, we’d have a cost-of-acquisition of $454 which gives us an ROI per customer of $6. Naturally we’d want to lower that cost-of-acquistion - ideally by getting more customers for the same amount of total investment.
Anything less than 11 new customers each month is a negative ROI and the longer we spent on Google Adwords with that negative ROI, the more money we’d be wasting.
How does this apply to Accessibility ROI? Simple: In order to claim that you’re getting a positive ROI from accessibility, you need to either increase the customer LTV (by increasing customer retention), increase the number of new customers that you gain, or deduce the amount of money you spend to acquire new customers.
The math is simple. Again: ROI = (Net Profit / Cost of Investment) x 100. To claim ROI from accessibility you need to be able to argue that the net profit (either by new business you acquire or customer loyalty you gain) you get from accessibility is more than the money you’ve spent to do so.
You should also note that your goal should be to maximize your ration between LTV and CAC. To be blunt, break-even is not enough to call your campaign a success. An ideal LTV:CAC ratio should be 3:1. The value of a customer should be three times more than the cost of acquiring them. If the ratio is too close, you are spending too much to get that customer.
To bring this back to accessibility: If you’re going to argue that accessibility increases business, you need to show that the amount of new money earned strictly from accessibility is 300% as much as it cost you to make your systems more accessible.
What about cost savings & loss avoidance?
What about not improving accessibility? How does that impact your ROI for accessibility? You can calculate that as well, calculating your possible loss by not being accessible. This is a little harder to track down because, logically speaking, proof that somethind didn’t happen isn’t proof that it would have otherwise happened. Yeah, that’s another topic for another day.
We can, however, discuss probability and risk. Specifically, we can make an informed judgment that engaging in risky behavior might lead to a possible loss. The first step in doing so is to calculate your probability of loss. Your probability is the # of negative events divided by the total number of other organizations who engage in similar activities and have suffered a loss (numEvents/numPeers) * 100.
Put more simply: how many of your peers have experienced a loss based solely on having an inaccessible website? In this case, your peers are people in the same industry with similar revenue numbers, etc.
Let’s imagine for a moment that you’re in one of the top 100 retailers in the United States. Your probability of being sued for accessibility is close to 100% these days. In that case, your risk amount is an average of the amount(s) paid for legal settlements. For giggles let’s assume a settlement amount of $100,000.
With 100% probability of a $100k loss as long as you spend below $100k you’re golden. You can equate this to having a positive ROI from accessibility. Spend over $100k and you’re at risk of experiencing negative ROI. That is, unless you’re also gaining new customers or increasing the LTV of existing customers. And, as before, you really want to see a return that’s 3:1, not 1:1 (and certainly not less than 1:1).
Calculating your spend
How do you know how much you’re spending on accessibility? Easy: That’s how much money you spend on accessibility-related work. This includes outside consultants, audits, training, and tools. It also includes the fully loaded time and materials cost of any staff members involved in making changes to improve accessibility.
The latter part is easy to calculate: The fully loaded cost of an employee is the sum of their basic salary, employment taxes, and benefits. This usually ends up being about 1.5x their salary. To get their hourly cost, divide that number by 2080, which is the average number of work hours in a year.
According to Glassdoor, the average developer’s survey is $75k per year and their estimated fully loaded cost is $112,500. Their hourly cost, fully loaded, is $54 an hour. Using the same approach, we can get the cost of each person who may be involved in accessibility, from designers to developers, QA engineers and even corporate lawyers. Your investment, therefore, is how much time people spend improving accessibility.
Put simply, one way to get an ROI from accessibility is to spend as little as possible on it. Wait, what?
Being proactive offers incredible ROI
To reiterate, in order get a positive ROI from accessibility, you need to: increase customer longterm value and/ or add new customers (directly due to your accessibility efforts) and the amount of money attained must exceed the amount you paid.
This includes the amount paid to consultants, the amount paid for training, the amount paid for tools, and the fully-loaded cost of any emplpyees doing work on accessibility.
This is why we need to consider being proactive about accessibility.
Back in 2016, I coined the term Extreme Accessibility, which represents a philosophy of applying Extreme Programming (XP) principles to accessibility. The most important part of Extreme Accessibility is to tackle Accessibility as early as possible and to take a proactive approach. There’s no such thing as perfect in anything, and accessibility is no different, but starting now is always better than waiting, because waiting until accessibility is a problem is always more expensive, more disruptive, and more time-consuming than it needs to be.
The missing piece of ROI and Accessibility
There’s one final missing piece that everyone seems to skip when they talk about the ROI from Accessibility. While others in the accessibility field want to talk about things like the SEO benefits or reduced resource utilization or increased usability, the true missing piece is actually new business from people with disabilities.
Unfortunately, articles about the Business Case for Accessibility seem to act like all you need to do is make your website more accessible and all of a sudden your pockets will fill with money. Just making your website more accessible isn’t enough. In fact, simply making your website more accessible really only saves you money through reduction of legal risk. Your best ROI will come from marketing directly to people with disabilities.
The data speaks for itself. According to DisabilityStatistics.org:
- There are approximately 54,000,000 persons with a disability in the US
- People with disabilities represent 5% of employed persons in the US - that’s approximately 6.6 million people
- The median income for an employed person with a disability is roughly the same as those who are non-disabled
The true ROI from accessibility is to not only make your website more accessible but to also market to people with disabilities.
The harsh truth about web accessibility is rather abysmal. We know, for instance, what accessibility issues your site will have before we’ve even looked at it. The scope and nature of common accessibility problems means that you can capture a lot of new business and/ or retain more business by using accessibility as a market differentiator.
Ultimately, once a lawsuit is filed, the outcome is pre-determined but you can turn accessibility risk into accessibility ROI by being proactive about accessibility and by creating marketing campaigns that discuss your efforts around accessibility.