When to invest in an improved user experience

Tony MacDonell of Teknision has a great post over on InsideRIA about The supply and demand of user experience.

I left a comment there but whilst it's in moderation but it's raised some more thoughts for me so thought it deserved it's own post.

Tony writes about how an investment in user experience is driven by supply and demand of said experience. In slow moving uncompetitive markets, this added value of a slick user experience isn't necessary and therefore is unlikely to receive heavy recognition and investment. You only need to look at many banking systems, trading platforms and data entry software to believe this is the case (N.B. these being slow movers rather than uncompetitive).

Tony also mentions the example of router interfaces as something that blatantly receives little UX attention because it's more appropriate for router manufacturers to compete on price rather than improving user experience.

The general cycle of things seems to be as follows:

1 - New product enters market, has no competition, focuses on functionality over form, it works, it does the job, reaches x% of market.

2 - Competition appears, attention on products grows, market grows, slice of pie desired grows, product's prices reduced.

3 - Prices reach lowest reasonable point, value needs to be added, user experience rears its head, flash/flex guy gets a new contract.

This sucks. And in my view is stupid. At point 3 we're still trying to generate more sales/users/whatever so we try to build desire through improving the product experience. Yet we're now making less per unit than ever before.

Had we invested in a suitable UX in the first instance the costs of doing so would have been less (I.e. not having wasted time and money on the first iteration crappy implentation), we'd have a much better, more desirable product, we'd have benefited from the additional interest whilst we're charging a premium and we'd be raising barriers to entry for any future competition.

You could argue the new interface extends the product lifecycle which would otherwise have dropped off sooner but in my opinion the advantages of doing it right first time far outweigh that.