Use This Template to Create a Realistic User Research Budget

Does anyone like to budget? Usually not. Creating a budget for anything can be stressful and difficult.

I remember the first time my manager tasked me with creating a user research budget. I was the organization's first and only user researcher, and was meant to build a framework and evangelize research.

Not only was that a huge responsibility, but I'd never created a user research budget. In the past, I had others who did this magical task that gave me access to incentives and particular tools. The success of research seemed to hinge on getting this budget right. If it was too little, I risked not being able to do enough research. If it was too much, I risked not getting buy-in right from the beginning.

It was challenging, but I learned much from that experience and have since created many user research budgets (although it's still not my favorite responsibility).

In case you have a similar experience to mine or hate creating budgets, I'm here to walk you through how I make a user budget with a handy template!

Why budgeting is important

At the beginning of my career, I didn't think about budgeting our user research. Many projects I did were reactive or didn't involve much planning. In fact, at my first company, we didn't even incentivize participants beyond them having a say in how we built our product.

With that approach, there were no Amazon gift cards to buy and not too much to plan for. We had a rotating list of customers we regularly spoke to, and that was that.

I quickly realized this was different from how things worked at most other companies. So, after leaving that company, I had to change my ways and look ahead. However, I immediately realized how helpful it could be to plan a user research budget.

Budgeting and thinking ahead are essential to ensure you:

• Conduct enough research over the quarter (or year)
• Make your life easier with recruitment incentives
• Get tools you need access to
• Ask for any budget for hiring new team members

Even if you aren't in charge of the budget at your organization, it’s a great practice to think through what your plan and budget would look like. Eventually, that responsibility will come to you!

How to calculate your next user research budget

Let's get into the nitty-gritty. I promise to make this as painless (and maybe fun?) as possible.

You can create a user research budget on a quarterly, bi-annual, or annual basis. I like the bi-annual approach, because it allows me to change things if necessary. With the bi-annual budget, I'm not locked into an entire year, and don't have to plan a quarterly budget. Now, this might depend on how your organization runs budget planning, so ask and default to the budgeting cadence of your company.

The two types of budgets

After I choose the cadence, I always calculate two types of budgets (I will use a bi-annual budget example):

1. Lean budget

The absolute bare minimum of research we should do over six months, and the fewest amount of tools/team members.

2. Strategic budget

This dual-budget approach might not be necessary, depending on your organization. For example, I commonly worked in startups or smaller companies with a lower budget for user research. So, when I first started pitching budgets, I would always get the question, "How low can we go?"

Instead of repeatedly answering that question, I now create these two budgets and hope to settle somewhere in between. This approach has helped me gain more trust from stakeholders because they can see my transparent decision-making process.

Whenever I present the two budgets, I tell people the significant differences between a lean versus strategic approach and the pros and cons associated with them.

For instance, by focusing on a strategic budget, we can:

• Gather a more strategic outlook on our holistic customer base, opening up the possibility of testing multiple features across teams
• Have more chances for teams to connect and talk with customers regularly
• Establish a rolling research program to help other teams outside of the product get the customer input they need
• Reach out to a more diverse set of customers, truly understanding the space and creating deliverables such as personas and journey maps
• Prioritize our decisions and next steps with a more extensive customer base
• Find tools that help streamline and optimize the user research process, enabling projects to run smoother and faster

By explaining each approach's benefits (and drawbacks), my colleagues can make the most informed decision. They also know exactly what to expect from research in the coming six months.

Calculating your budget (+ a template)

Once I have an idea of the cadence and the type of budget, I go through the following steps to calculate precisely how much money I need (again, I will use a bi-annual example). I always start with the strategic research budget.

✔ Conduct research

For conducting research, I look at the following:

• Projects – The overall number of projects I plan to run over the next six months. I consult the backlog or sit down with my stakeholders to get an idea of what we need to accomplish through research.
• Methodologies – For each project, what methodologies I run, and the time it will take for each method (ex: 90-minute interviews, 45-minute usability tests). The timing is necessary because it helps determine the incentive and required amount of participants.
• Numbers – The number of participants per each project and the average amount of cost per participant

Once I finish this, I calculate:
(total cost of the number of projects)*( number of participants)*( cost per participant)

This lands me with a solid total number.

For example...

I have four projects I want to run (I don't recommend only four projects, it just makes math easier)!
☑ Two 45-minute usability tests requiring seven participants each (14 total)

• Each participant costs $45

☑ One 60-minute 1x1 interview project requiring fifteen participants

• Each participant costs $60

☑ One unmoderated card sort requiring twenty-five participants

• Each participant costs $35
  

Now I calculate each project and then the total:

• Usability test total: 14*45 = $630
• Interview total: 60*15 = $900
• Card sorting total: 25*35 = $875

Total research cost: $2,405

✔ Tools

The first time I created a user research budget, I forgot all about the tools. It was undoubtedly a "d’oh" moment.

Whenever I think about tools, I separate them into the following categories:

• Planning research
• Recruitment and scheduling
• Conducting research
• Analysis and synthesis
• Sharing research

I aim to have at least one tool for each step. However, I could only sometimes get tools because I primarily worked in startups or companies with lower budgets. If you don't have the general budget for tools, I recommend looking at your process and determining the following:

• What takes up the most time
• What is your most significant pain point

For me, those typically were within the recruitment and scheduling phase of the research process. So, I focused on recruitment and scheduling tools whenever I pitched tools. I then could talk about the tangible benefits of adding a tool into this process, such as more studies, faster time to research, less time spent on recruitment, or a broader participant base.

Whenever I budget for tools, especially if I have a lower budget, I look at several options, from a lower cost to a higher price, and present the options.

✔ Hiring

The last part of a budget is hiring. This part may or may not be included, depending on your responsibilities. It was usually a separate process for me, but I have also worked in companies where this was a part of the overall research budget.

Whenever thinking about hiring, it is about pitching the value another team member could bring to an organization.

This pitch includes points like:

• To build an empathetic, user-focused company that aligns the product and business strategy with users' core needs and goals.
• To understand how people perform tasks and achieve their goals to design an effective and pleasurable UX
• To create a shorter development time upfront, with a clear vision of what you are trying to build
• To avoid costly fixes of development problems later down the road
• To allow different teams to work collaboratively, ensuring a cohesive user experience across the entire product/service
• To solve differences in opinion of "What should we do now?" by replacing it with the phrases: "Let's test it" or "Let's see what the research showed us."
• To design and build something people will use that solves a relevant problem that people are having—and keeps teams motivated!

Whenever I create a budget for hiring, I do a lot of research into what the market pays and what average salaries are for the role level and location. It’s almost identical to my research when applying to roles and discussing salary. The important part is that you do your research to explain to colleagues how you arrived at specific numbers.

Overall, creating a user research budget can be stressful and time-consuming, but it helps ensure user research is successful at an organization.