The Value Of Building An Economic Business Case With Forrester Cost Savings And Business Benefits Enabled By A Forrester Total Economic Impact™Study July 2022 A FORRESTER TOTAL ECONOMIC IMPACT STUDY
“We love having the Forrester brand next to us when we share data. It’s one thing when we use data because everyone sees our brand name and knows it’s a marketing project. But when we have that Forrester logo next to a data point, it brings so much credibility to what we’re doing, and our trust is being improved significantly.” — Director of product marketing, SaaS
3 Forrester’s Total Economic Impact™(TEI) is Forrester’s proven methodology to justify, quantify, and articulate the value of an investment. This independent and objective analysis helps companies to align their product, sales, and marketing teams with quantitative and qualitative data straight from the voice of their customers. Key Findings ROI 134% BENEFITS PV $368K NPV $211K PAYBACK <6 months Key Metrics $177.1K $133.0K $57.9K Incremental profit from generating new leads Business case development time savings Content marketing creation time savings
4 Methodology FINANCIAL MODEL FRAMEWORK Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewed organizations. COMPOSITE ORGANIZATIONS Designed a composite organization based on characteristics of the interviewed organizations. CUSTOMER INTERVIEWS Interviewed 8 decision-makers at organizations TEI to obtain data with respect to costs, benefits, and risks. Customer Interviews Industry Interviewee Title Revenue Cybersecurity SaaS VP of marketing $300 million SaaS Director of product marketing $120 million Telecommunications services Director of product marketing $60 million Legal document management Global director of product marketing $110 million Software development Senior director of research and innovation $40 million Service cloud Solution marketing leader for value $5 billion Operations management software Marketing and research strategist $85 million Cybersecurity Director of product marketing $4.3 billion
$368K 18-month total benefits PV Total Benefits Incremental profit from generating new leads Content marketing creation time savings Business case development time savings
Leads Increased By 60% And Conversion Rate Increased From 1% To 2.5%, Resulting In A Boost To New Profit Interviewed decision-makers shared that their organizations saw an increase in number and quality of leads, which led to an increase in incremental profit. This was one of the interviewees’ main objectives in purchasing the TEI study, as the analysis provided the insight needed into both the quantitative and qualitative benefits of their solutions. Because Forrester is an objective, third-party organization, the interviewees indicated that both prospects and customers were more inclined to believe the results and therefore more inclined to buy. A director of product marketing for a telecommunications company shared these results: “Since the TEI has gone live, we’ve been able to generate over 3,785 leads from the report itself. It is one of the best-performing assets that we have in our portfolio. Our number two white paper asset has only 1,500 to 1,600 leads. The TEI is double that.” Leads increased due to TEI case study 40% to 60% $177K 18-month total benefits PV 48%
“The TEI study has proven incredibly impactful because of the quality of leads interested in purchasing our solution.” — Director of product marketing, cybersecurity
A TEI study helped salespeople more efficiently build a business case for those customers who needed one. Furthermore, because the TEI study was available, it alleviated questions that a VP of marketing’s team would have received, giving valuable time back to his employees. Not only did the TEI study provide a clear business value case study for sales to use, but it also was a differentiation from competitors as a third-party validation of their solution. The present value benefit for time savings is $133K over 18 months. Business Case Development Time Savings Of 33% $133K 18-month total benefits PV 36%
“Because we have the TEI study, we can tell our salespeople, ‘Here is what you do when pricing comes up. Here is where you justify value.’ We had tried to create our own business case studies, but they were sort of like the poor man’s version of it versus having this ready-made thing that this third party validated. The TEI 100% made our [salespeople’s] lives easier.” — VP of marketing, cybersecurity SaaS
By choosing to work with the Forrester TEI team, the interviewees avoided needing to dedicate internal resources to develop an asset with ROI analysis based on the substantial data from several customers. They saw significant time savings throughout the content creation process, including savings around roadmapping, scoping, and actual content development. The present value benefit for content marketing creation time savings is $58,000 over 18 months. Content Marketing Creation Time Savings Of 95% $58K 18-month total benefits PV 16%
“The Forrester TEI study is the only third-party asset that was well-written. I’ve been engaged with six or seven in the last year and a half, and it’s the only one that was well-written. They actually understood what we did, and we didn’t have to make any tweaks.” — Director of product marketing, telecommunications services
Unquantified Benefits Additional benefits that customers experienced but were not quantified include: Engaged decision-makers who were otherwise uncertain or reluctant with purchase support Created consistency and alignment around providers’ or sellers’ value propositions Supplied primary research and voice-of-the-customer data and feedback Elevated brand awareness across the customer lifecycle
“The TEI is the gold standard. It comes from Forrester and provides an ROI and justification for our software.” — VP of marketing, cybersecurity SaaS
Appendix A: Total Economic Impact Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders. . Total Economic Impact Approach Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization. Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution. Flexibilityrepresents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated. Risks measure the uncertainty of benefit and cost estimates given 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.” ! Present value (PV) The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows. Net present value (NPV) The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have higher NPVs. Return on investment (ROI) A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs. Discount rate The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%. The initial investment column contains costs incurred at “Time 0” or at the beginning of Month 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the 18-month period. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur. Payback period The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.
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