Attentive SMS Marketing allows brands to optimize the impact of the SMS channel through faster subscriber growth, more precise customer identification and tagging, higher message deliverability, and better engagement through triggered messages and personalization by driving higher conversion rates, revenue, and profitability. A strategic partnership with Attentive also positions brands to take advantage of innovations such as conversational AI and automation that may further increase the value of the SMS channel in the future.
Attentive commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Attentive SMS Marketing.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Attentive SMS Marketing on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives of four organizations with experience using Attentive SMS Marketing. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a retail organization with 1.5 million SMS subscribers and revenue of $3 billion per year.
Interviewees noted that prior to investing in Attentive SMS Marketing, their organizations struggled to sustain the early benefits of their entries into the SMS marketing channel. The organizations’ SMS subscriber growth reached stagnation while efforts to increase opt ins often resulted in even more unsubscribes. Given their limited personnel resources, it was difficult for them to develop sophisticated SMS campaigns, triggered customer journeys, and personalization at scale. Several interviewees also said their organization faced legal challenges related to privacy incidents in the SMS channel.
Interviewees said that after partnering with Attentive, their organizations saw revenue and profit benefits in the SMS channel associated with faster subscriber growth, more precise customer identification and tagging, higher message deliverability, and better engagement through triggered messages and personalization — and they achieved all of these results with fewer dedicated marketing and technical resources than before. Interviewees also highlighted improvements to customer experience, support from the Attentive team, and perceived improvements to compliance that could help avoid legal penalties in the future.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Profit increase from SMS subscriber growth of up to 25% subscribers annually. Attentive SMS Marketing allows the composite organization to drive an increase in qualified SMS subscribers while minimizing unsubscribes, delivering an additional $4.5 to $11.8 million in revenue to the organization.
- Profit growth from better subscriber identification and conversion with Attentive. Working with Attentive improves the composite organization’s profitability in the SMS channel with its existing customer base through more precise customer identification and tagging, higher message deliverability, and better engagement through triggered messages and personalization. These improvements yield a higher conversion rate at the bottom of the funnel, delivering $19.6 million to $27.7 million in additional revenue to the composite organization.
- Avoided marketing and developer staff labor of $721,000. With Attentive SMS Marketing, the composite organization requires fewer marketing resources to maintain and grow its SMS channel while technical resources are restaffed to other initiatives. This represents nearly $721,000 PV in productivity benefits to the organization over three years.
- Avoided legacy SMS marketing costs of $2.7 million. Once the composite organization migrates to Attentive SMS Marketing, it phases out its previously contracted SMS solutions that are now redundant. It also no longer needs to pay the associated per-message fees, saving nearly $2.7 million PV over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- A partnership with Attentive. Interviewees said that they feel as though a partnership with Attentive keeps their organizations on the leading edge of innovations in the space through additional product innovations (for SMS Marketing) while continuing to help their organizations drive results in the SMS channel.
- Receiving strong support from the Attentive team. Interviewees said support from the Attentive team from account management to strategy recommendations surpasses the level of support their organizations receive or received from other current or former SMS marketing vendors.
- Security and compliance benefits. Interviewees said their organizations switched to Attentive SMS Marketing in part due to Attentive’s scrutiny when it comes to customer communication and information security. They said this instills confidence that their organizations may avoid information breaches or legal consequences in the future.
- Improved customer experience and deeper engagement. Beyond the benefits quantified in this report, interviewees said Attentive SMS Marketing gives their organizations the ability to drive personalization and one-to-one engagement with their customers through the SMS channel through triggered messages such as post-purchase messaging. Over time, this deeper engagement with an organization’s customer base may result in higher overall lifetime value.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Attentive subscription fees and carrier costs. The composite organization pays Attentive on a per-message basis in addition to paying a per-message carrier fee. It also incurs an annual list management fee across its 1.8 million subscribers. Over three years, this costs the composite organization $3.4 million PV.
- Attentive implementation and ongoing management costs. The composite organization dedicates marketing and IT personnel resources to Attentive SMS Marketing implementation tasks as well as to ongoing management tasks post-deployment. This costs the composite organization $158,000 PV over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $10.11 million over three years versus costs of $3.60 million, adding up to a net present value (NPV) of $6.51 million and an ROI of 181%.
Key Statistics
-
Return on investment (ROI):
181%
-
Benefits PV:
$10.11M
-
Net present value (NPV):
$6.51M
-
Payback:
<6 months
Benefits (Three-Year)
Profit increase from SMS subscriber growth with Attentive Profit growth from better subscriber identification and conversion with Attentive (existing SMS customers) Avoided marketing staff and developer labor Avoided legacy SMS marketing costsTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Attentive SMS Marketing.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Attentive SMS Marketing can have on an organization.
-
Due Diligence
Interviewed Attentive stakeholders and Forrester analysts to gather data relative to Attentive SMS Marketing.
-
Interviews
Interviewed five representatives at four organizations using Attentive SMS Marketing to obtain data about costs, benefits, and risks.
-
Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
-
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 interviewees.
-
Case Study
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Disclosures
Readers should be aware of the following:
This study is commissioned by Attentive and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Attentive SMS Marketing.
Attentive reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.
Attentive provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Richard Cavallaro
Jonny Cook
Drivers leading to the Attentive SMS Marketing investment
Interviews
| Role | Industry | Region | Revenue |
|---|---|---|---|
| Director of DTC retention marketing and CRM | Retail: Apparel | North America | $2.1B |
| Director of digital CRM Senior digital CRM specialist |
Retail: Footwear | North America | $3.3B |
| Senior director of direct marketing and personalization | Retail: Sports and leisure | North America | $12.6B |
| Senior director of retention and CRM | Retail: Apparel | North America | $2.0B |
Key Challenges
Prior to investing in Attentive SMS Marketing, interviewees’ organizations struggled with their legacy SMS solutions in terms of subscriber growth rate, increased opt-out rates, and missed revenue-generating opportunities.
Interviewees noted how their organizations struggled with common challenges, including:
- Stagnation of subscriber growth and an increase in unsubscribes. Interviewees said that prior to implementing Attentive SMS Marketing, their organizations’ previous solutions did not drive subscriber growth through identification of “proper” customers, resulting in unsubscribes and high churn. The senior director of direct marketing and personalization at a retail organization noted: “We were losing as many customers as we were gaining. Our opt-in rate and opt-outs were pretty much the same. We were not really growing [the channel].”
- Continued optimization of the SMS channel. Some of the interviewees’ organizations found that their legacy SMS marketing providers were not helping them maximize the value of the SMS channel as a whole. Interviewees noted that this “strictly vendor” relationship resulted in inordinate amounts of internal marketing and IT staff time dedicated to managing the SMS channel on a day-to-day basis, which left less time for more strategic work such as improving subscriber identification efforts or launching additional brands or products on the SMS channel. The senior director of direct marketing and personalization explained, “[Our previous vendor] did not really give us much from a strategic-thinking standpoint [around the SMS channel], or how to evolve the program over subsequent years.”
-
Legal ramifications. Some interviewees shared that prior to investing in Attentive SMS Marketing, their organizations saw legal ramifications resulting from security incidents with their previous providers. In one instance, one of the organizations discontinued its SMS program altogether for several years due to the perceived risk posed by the channel.
The director of digital CRM in retail explained: “[There were] technical errors not unsubscribing people successfully when they had asked to be to a point where we couldn’t definitively tell who within our subscriber list was eligible to receive messages and who wasn’t. We literally had to start from scratch when we went through an RFP (request for proposal) to find a new vendor.”
While Attentive can’t guarantee fewer compliance and/or legal incidents, interviewees expressed confidence that because Attentive is an incumbent in the SMS space, it would give their organizations the best opportunity to avoid these pitfalls.
Investment Objectives
The interviewees’ organizations searched for a solution that could:
- Grow their existing subscriber bases with quality subscribers to take advantage of the increasingly important SMS channel.
- Ensure message deliverability.
- Minimize technical and marketing staff involvement.
- Assist with personalization and development of an SMS channel.
- Enhance security capabilities.
- Provide market leadership in the SMS space.
Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the five interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The composite organization is a retailer with $3 billion in annual revenue, a net operating margin of 10%, and 15,000 employees. Before implementing Attentive SMS Marketing, it had an SMS subscriber list size of 1.5 million with its legacy SMS marketing solution.
Deployment characteristics. The composite organization implements Attentive SMS Marketing over the course of 1.5 months and migrates its SMS subscriber base from another SMS marketing solution. Three marketing and IT staff members are tasked with the implementation of the SMS program, and three marketing personnel spend a small portion of their time overseeing the program.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Profit increase from SMS subscriber growth with Attentive | $405,000 | $729,000 | $1,069,200 | $2,203,200 | $1,773,967 |
| Btr | Profit growth from better subscriber identification and conversion with Attentive for existing SMS customers | $1,669,613 | $2,003,535 | $2,354,154 | $6,027,301 | $4,942,354 |
| Ctr | Avoided marketing staff and developer labor | $289,913 | $289,913 | $289,913 | $869,738 | $720,969 |
| Dtr | Avoided legacy SMS marketing costs | $1,037,700 | $1,074,960 | $1,114,083 | $3,226,743 | $2,668,787 |
| Total benefits (risk-adjusted) | $3,402,225 | $4,097,408 | $4,827,349 | $12,326,982 | $10,106,077 |
Profit Increase From SMS Subscriber Growth With Attentive
Evidence and data. Interviewees said that prior to implementing Attentive SMS Marketing, their organizations faced several challenges in the SMS channel with their previous efforts and solutions. Among these pain points, several interviewees highlighted driving consistent subscriber identification as a challenge. As these organizations’ brands and their subscriber counts reached maturity in the SMS channel, their subscriber growth would plateau and decline as their efforts to drive additional growth led to opt-outs or unsubscribes. Interviewees told Forrester that Attentive SMS Marketing allowed their organizations to drive growth for both new brands and mature brands to the channel alike, capitalizing on the revenue and profit each additional subscriber represents to the organization.
- The director of DTC retention marketing at a retail organizations told Forrester that Attentive SMS Marketing is a critical part of their organization’s funnel growth because it grows their SMS subscriber counts across their brands that are both newly launched and mature in SMS. Speaking about a brand newly launched on the SMS channel with Attentive, the interviewee added, “Our subscriber growth was tremendous in Year 1 and still continues to grow as we’re approaching our second year.”
- The director of DTC retention marketing and CRM at a retail organization said their company explored other SMS marketing providers as part of a due diligence process when launching another brand on the channel. They said: “[Other providers] weren’t [delivering] comparable results to the brands on Attentive.” The interviewee also noted that Attentive’s sign-up experience for subscribers was more persistent than that of the other piloted solutions and that Attentive yielded higher growth in the channel overall. They said, “We can capture customers [with Attentive SMS Marketing], but we can also convert them down the funnel faster.” The interviewee estimated that Attentive SMS Marketing grew this newly launched brand on SMS twice as fast as the next most effective solution demoed.
- The director of digital CRM at a retail organization said their company needed to relaunch its brand on the SMS channel after abandoning previous efforts with another provider due to security concerns. With Attentive SMS Marketing, the organization grew its subscriber base to 1.3 million customers in less than one year while ramping very quickly to capitalize on the 2022 holiday season. The interviewee noted that customers who have come in through the SMS channel (and who represent approximately $12 million in revenue) tend to spend slightly more than those from other channels.
-
The senior director of direct marketing and personalization at a $12.6 billion retailer explained that their organization was able to migrate its existing SMS customer subscriber base for both e-commerce and in-person customers to Attentive without starting the program from scratch. At that point, subscriber growth with a previous solution had stagnated. By moving to Attentive SMS Marketing, the organization boosted its subscriber growth by up to 30%.
The interviewee explained: “One of the reasons we chose Attentive is that when they presented their [SMS marketing] capabilities, they were very aggressive in their [activities to grow subscribers]. … We did see this significant growth when we switched to Attentive [SMS Marketing]. From the beginning of the year until now, our [subscriber] database grew by about 18%, and we’re estimating that at the end of the year, it will be almost 30% growth year over year.”
Through holdout testing, the interviewee’s organization calculated that an SMS subscriber is worth an additional $9.20 in incremental revenue than a customer who is not, which supports its case to grow SMS subscribers and the channel as a whole.
Modeling and assumptions. Forrester makes the following assumptions about the composite organization:
- Before using Attentive SMS Marketing, the composite had an SMS marketing subscriber list of 1.5 million subscribers that growing by 5% annually.
- With Attentive SMS Marketing, the composite’s SMS subscriber growth rate is 25% in Year 1, 20% in Year 2, and $17.5% in Year 3. This growth is attributable to the Attentive partnership and its tactics to drive more opt-ins and fewer unsubscribes.
- An SMS subscriber represents an additional $12 in revenue to the subscriber organization.
- The composite organization has a 10% net margin.
Risks. This benefit will vary among organizations based on:
- The organization’s preexisting SMS marketing program and subscriber base as it relates to the potential uplift with Attentive SMS Marketing.
- The propensity of the organization’s customers to spend, subscribe, or unsubscribe.
- The organization’s industry as it relates to revenue per customer, order value, net margin, and other industry-specific factors of variance.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of nearly $1.8 million.
Profit Increase From SMS Subscriber Growth With Attentive
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Baseline SMS subscribers before Attentive | Composite | 1,500,000 | 1,575,000 | 1,653,750 | |
| A2 | Growth attributable to Attentive | Interviews | 25% | 20% | 17.5% | |
| A3 | SMS subscribers with Attentive | A1*A2 | 1,875,000 | 2,250,000 | 2,643,750 | |
| A4 | Net new SMS subscribers with Attentive | A3-A1 | 375,000 | 675,000 | 990,000 | |
| A5 | Incremental revenue per SMS subscriber | Interviews | $12.00 | $12.00 | $12.00 | |
| A6 | Subtotal: Revenue from new SMS subscribers | A4*A5 | $4,500,000 | $8,100,000 | $11,880,000 | |
| A7 | Net margin | Composite | 10% | 10% | 10% | |
| At | Profit increase from SMS subscriber growth with Attentive | A6*A7 | $450,000 | $810,000 | $1,188,000 | |
| Risk adjustment | ↓10% | |||||
| Atr | Profit increase from SMS subscriber growth with Attentive (risk-adjusted) | $405,000 | $729,000 | $1,069,200 | ||
| Three-year total: $2,203,200 | Three-year present value: $1,773,967 | |||||
Profit Growth From Better Subscriber Identification And Conversion With Attentive For Existing SMS Customers
Evidence and data. On aggregate, interviewees told Forrester that working with Attentive improved their organization’s profitability in the SMS channel with their existing customer bases through more precise customer identification and tagging, higher message deliverability, and better engagement through triggered messages and personalization. These improvements ultimately yield higher conversion rates at the bottom of the funnel and deliver additional revenue and profit for the organizations.
-
Representatives spoke to the increased sophistication of their organizations’ triggered SMS messages with Attentive, and they highlighted their ability to send discount codes, key reminders, and personalized engagement that drives e-commerce traffic, in-store traffic, and, ultimately, improved conversion rates.
The senior director of retention and CRM explained to Forrester that one of their organization’s main KPIs for the SMS channel is website traffic, particularly after deploying an SMS-based campaign to subscribers. They said: “We can’t control conversion directly, but we can influence conversion. Our job [with Attentive SMS Marketing] is to make sure that we get qualified individuals to land on a site to make that purchase.”
The interviewee noted that with Attentive-based SMS campaigns, their organization’s web traffic spikes have been so significant that if the company is just 15 minutes late deploying a campaign, they’ll be questioned by the web team waiting to ensure a smooth experience for customers given the traffic spike.
The director of DTC retention marketing and CRM at a retail organization told Forrester they can see site traffic jump by up to 80% following an SMS campaign, inherently driving additional revenue from their customer base.
- The same interviewee told Forrester that the partnership with Attentive and its platform allows their organization to test and optimize its communication and content to drive the most impactful results in the SMS channel. The interviewee explained: “[With Attentive SMS Marketing,] we’ve done lots of different message testing. Attentive has some cool AI functionality that helps us. Their algorithm scales towards what’s going to drive the most clicks and revenue for us. They’ve helped us run some tests on incrementality of touch points, which has been great. [For example,] it will highlight opportunities we have to inpoints [and] contact frequency without increasing unsubscribes.”
- The senior director of direct marketing and personalization at a retailer highlighted the value of the Attentive partnership in terms of strategy optimization and journey development: “We really appreciate Attentive’s input in getting new ideas to experiment in the SMS channel.”
- With respect to message deliverability, interviewees told Forrester that with Attentive, deliverability is high to the point where it is not a concern at all.
Modeling and assumptions. Forrester makes the following assumptions about the composite organization:
- Each of the composite organization’s SMS subscribers (more than 1.8 million in Year 1) receives an average of 48 SMS messages annually. These messages have an average open rate of 97%.
- Before using Attentive SMS Marketing, the composite’s message deliverability rate was 90%. With Attentive SMS Marketing, this improves to 95%.
- Before using Attentive SMS Marketing, the composite had a 25% message open rate and a 2.5% conversion rate. This conversion rate improves to 3% with Attentive SMS Marketing.
- The composite’s average annual order value per customer of $150.
- The composite organization has a 10% net margin.
Risks. This benefit will vary among organizations based on:
- The sophistication of the organization’s preexisting SMS marketing program as it relates to the potential uplift in targeting, deliverability, and engagement with Attentive SMS Marketing.
- The level of engagement of the organization’s customer base as it relates to open rate, click-through rate, and conversion rate on SMS messages.
- The organization’s industry as it relates to average order value, net margin, and other industry-specific factors of variance.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV of $4.9 million.
Profit Growth From Better Subscriber Identification And Conversion With Attentive For Existing SMS Customers
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | Total SMS subscribers | A3 | 1,875,000 | 2,250,000 | 2,643,750 | |
| B2 | Messages sent per subscriber | Composite | 48 | 48 | 48 | |
| B3 | Average open rate | Assumption | 97% | 97% | 97% | |
| B4 | Average click-through rate | Interviews | 25% | 25% | 25% | |
| B5 | Average legacy per message conversion rate | Interviews | 2.5% | 2.5% | 2.5% | |
| B6 | Legacy deliverability rate | Assumption | 90% | 90% | 90% | |
| B7 | Average order value | Composite | $150 | $150 | $150 | |
| B8 | Subtotal: Revenue attributable to SMS marketing in legacy environment | B1*B2*B3*B4*B5*B6*B7 | $73,659,375 | $88,391,250 | $103,859,719 | |
| B9 | Per message conversion rate with Attentive | Interviews | 3.0% | 3.0% | 3.0% | |
| B10 | Deliverability rate with Attentive | Interviews | 95% | 95% | 95% | |
| B11 | Subtotal: Revenue with Attentive SMS Marketing | B1*B2*B3*B4*B7*B9*B10 | $93,301,875 | $111,962,250 | $131,555,644 | |
| B12 | Revenue increase with Attentive | B11-B8 | $19,642,500 | $23,571,000 | $27,695,925 | |
| B13 | Net margin | Composite | 10% | 10% | 10% | |
| Bt | Profit growth from better subscriber identification and conversion with Attentive for existing SMS customers | B12*B13 | $1,964,250 | $2,357,100 | $2,769,593 | |
| Risk adjustment | ↓15% | |||||
| Btr | Profit growth from better subscriber identification and conversion with Attentive for existing SMS customers (risk-adjusted) | $1,669,613 | $2,003,535 | $2,354,154 | ||
| Three-year total: $6,027,301 | Three-year present value: $4,942,354 | |||||
Avoided Marketing Staff And Developer Labor
Evidence and data. Representatives highlighted the relative simplicity of using Attentive SMS Marketing for their organizations’ marketing staff. They also said marketing personnel can manage it on a day-to-day basis rather than needing IT or developer resources as compared with previous and/or concurrently used marketing solutions. As a result, the organizations require fewer marketing FTE resources to maintain and grow the SMS channel with Attentive SMS Marketing, while IT or developer resources can be avoided entirely and restaffed to other initiatives.
- The director of DTC retention marketing and CRM at a retail organization said Attentive SMS Marketing feels like a tool for marketers rather than for IT staff and that this greatly reduced friction around campaign development. They stated: “[Attentive SMS Marketing] is marketing-led and not IT-led. And when a tool is marketing-led, it’s a very easy turnkey tool to use. If there is zero intimidation and something is easy to use, then use you are [naturally] going to use it. This is a huge difference compared to our other providers that we [have used]. I can train somebody in 15 minutes on Attentive [SMS Marketing], and they can develop SMS campaigns. [It’s] not difficult at all.”
- The senior director of direct marketing and personalization at a large retailer explained the productivity benefits of setting up and automating triggered SMS journeys with Attentive SMS Marketing, and they noted this helps to eliminate ongoing manual work for marketing personnel.
-
The director of digital CRM at a retailer attributed gained efficiencies to the high ROI their organization has seen from the SMS channel. They stated: “Attentive [SMS Marketing] gives us the ability [in the SMS channel] to get out there and generate revenue without a tremendous amount of effort. For email, it’s all hands on deck. We’ve got a pretty lean team, and they’re worn pretty thin in terms of all the things they need to do.”
The senior digital CRM specialist at the same organization estimated that all activities across their SMS — which is the company’s most profitable channel — takes up less than 10% of their team’s time and capacity.
Modeling and assumptions. Forrester makes the following assumptions about the composite organization:
- Two marketing FTEs who were responsible for the SMS channel reclaim 75% of the time they previously used to manage SMS strategy and campaign development on the previous solution because Attentive allows them to automate several of these previously manual tasks.
- The composite reallocates one developer resource to another project because the technical implementation tasks that required IT resources with the previous SMS solution are now avoidable.
- The average annual salary of a marketing staff member is $114,750.
- The average annual salary of a developer staff member is $150,000.
Risks. This benefit will vary among organizations based on:
- The scale and scope of the organization’s preexisting SMS marketing program as it relates to required marketing and technical staff involvement.
- The skill and capacity of the organization’s marketing and IT resources.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV of nearly $721,000.
Avoided Marketing Staff And Developer Labor
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Marketing FTEs required to manage prior SMS marketing tools/program | Composite | 2 | 2 | 2 | |
| C2 | Reduction in effort with Attentive | Interviews | 75% | 75% | 75% | |
| C3 | Average annual burdened rate of a marketing FTE | Assumption | $114,750 | $114,750 | $114,750 | |
| C4 | Avoided marketing FTE costs | C1*C2*C3 | $172,125 | $172,125 | $172,125 | |
| C5 | Avoided/reallocated developer resources | Interviews | 1 | 1 | 1 | |
| C6 | Average annual burdened rate of a developer FTE | Assumption | $150,000 | $150,000 | $150,000 | |
| Ct | Avoided marketing staff and developer labor | C4+C6 | $322,125 | $322,125 | $322,125 | |
| Risk adjustment | ↓10% | |||||
| Ctr | Avoided marketing staff and developer labor (risk-adjusted) | $289,913 | $289,913 | $289,913 | ||
| Three-year total: $869,738 | Three-year present value: $720,969 | |||||
Avoided Legacy SMS Marketing Costs
Evidence and data. Interviewees said that once their organizations migrated to Attentive SMS Marketing, they were able to phase out previously contracted SMS solutions and the associated per-message fees. On aggregate, interviewees told Forrester that their organizations’ previous SMS marketing solutions were less expensive than Attentive SMS Marketing, but that they lacked functionality. This led them to ultimately adopt Attentive SMS Marketing.
Modeling and assumptions. Forrester makes the following assumptions about the composite organization:
- The composite organization avoids a $0.009 platform fee and $0.0025 carrier fee for each message sent out across its subscriber base.
- The composite delivers an average of 48 messages per subscriber annually across its 1.5 million customer subscriber base.
- The composite avoids paying $250,000 annually in average maintenance and licensing costs for its previous solution.
- The composite avoids $75,000 annually in reduced professional service requirements.
Risks. This benefit will vary among organizations based on:
- The scale of the organization’s SMS marketing program as it relates to per-message and carrier fees avoidable after the migration to Attentive SMS Marketing.
- The contract specifics for the organization’s existing SMS marketing programs as they relate to per-message, licensing, and professional services costs.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV of nearly $2.7 million.
Avoided Marketing Staff And Developer Labor
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| D1 | Baseline SMS subscribers | A1 | 1,500,000 | 1,575,000 | 1,653,750 | |
| D2 | SMS messages sent per subscriber | B2 | 48 | 48 | 48 | |
| D3 | Legacy SMS marketing message cost per message | Assumption | $0.009 | $0.009 | $0.009 | |
| D4 | Subtotal: Avoided message costs | D1*D2*D3 | $648,000 | $680,400 | $714,420 | |
| D5 | Carrier cost per message | Assumption | $0.0025 | $0.0025 | $0.0025 | |
| D6 | Subtotal: Avoided carrier costs | D1*D5 | $180,000 | $189,000 | $198,450 | |
| D7 | Average maintenance and license costs savings from legacy messaging solution | TEI standard | $250,000 | $250,000 | $250,000 | |
| D8 | Reduction in professional services requirement | TEI standard | $75,000 | $75,000 | $75,000 | |
| Dt | Avoided legacy SMS marketing costs | D4+D6+D7+D8 | $1,153,000 | $1,194,400 | $1,237,870 | |
| Risk adjustment | ↓10% | |||||
| Dtr | Avoided legacy SMS marketing costs (risk-adjusted) | $1,037,700 | $1,074,960 | $1,114,083 | ||
| Three-year total: $3,226,743 | Three-year present value: $2,668,787 | |||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Partnering with a market leader in SMS marketing. Several interviewees told Forester their organizations chose Attentive as a partner not only for the results it could deliver in the SMS channel, but for Attentive’s perceived role as a market leader in the space. Interviewees expressed confidence that Attentive can keep their organizations on the leading edge of innovations in the SMS marketing space while continuing to drive results in the channel. The senior director of direct marketing and personalization at a retailer summarized, “Even just since we’ve been with Attentive [during the past two years], the rate at which they have grown and progressed to truly being the expert in [the] SMS world is pretty overwhelming.”
- Receiving strong support from the Attentive team. Interviewees collectively told Forrester that the support their organizations receive from the Attentive team — from account management to strategy recommendations — instills confidence that they’re getting the most out of the SMS channel and that it surpasses the support other current or former vendors provide.
- Security and compliance benefits. While no vendor can guarantee complete privacy and security of sensitive customer information, interviewees told Forrester that Attentive allows them to feel as secure as they can with their organization’s customer data. Several interviewees said their company switched to Attentive SMS Marketing in part due to this perception after they faced legal consequences for breaches with previous SMS marketing efforts. Representatives expressed confidence in Attentive’s scrutiny when it comes to customer communication and information security.
- Improved customer experience and deeper engagement. Beyond the benefits quantified in this report, interviewees noted that Attentive SMS Marketing gives their organizations the ability to drive personalization and one-to-one engagement with their customers through the SMS channel through triggered messages such as post-purchase messaging. Interviewees said that over time, they expect this deeper engagement with their organizations’ customer bases to manifest in more precise product recommendations and higher overall lifetime value. The director of DTC retention marketing and CRM at a retail organization added that Attentive SMS Marketing has opened an additional channel for their company’s customer care team to provide support, which further bolstered the customer experience.
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Attentive SMS Marketing and later realize additional uses and business opportunities, including:
- Burgeoning AI use cases in SMS marketing. Representatives said Attentive continues to roll out AI features in SMS marketing and that this helps their organizations implement new strategies into their programs in the future. They explained that tools such as Attentive Concierge can drive one-on-one customer communication with conversational AI and that AI-led campaign design may support additional profitability in the SMS channel in subsequent years. Representatives specifically expressed optimism that these innovations can help their organizations avoid stagnation in the channel with their more mature brands.
- Expanding the SMS channel to additional brands and/or regions. Several of the interviewees said their organizations have already launched or plan to launch additional brands or regions on the SMS channel with Attentive SMS Marketing. The director of DTC retention marketing and CRM at a retailer noted how their organization has launched four brands with Attentive SMS Marketing, while the senior director of direct marketing and personalization at another retailer said their organization is currently onboarding two significant brands. Interviewees said that because of the relative speed and simplicity to launch additional brands with Attentive SMS Marketing, organizations may stand to unlock more revenue for their organizations in the SMS channel.
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
Quantified cost data as applied to the composite
Total Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Etr | Attentive subscription fees and carrier costs | $0 | $1,162,500 | $1,395,000 | $1,639,125 | $4,196,625 | $3,441,210 |
| Ftr | Attentive implementation and ongoing management costs | $49,500 | $43,808 | $43,808 | $43,808 | $180,923 | $158,443 |
| Total costs (risk-adjusted) | $49,500 | $1,206,308 | $1,438,808 | $1,682,933 | $4,377,548 | $3,599,653 |
Attentive Subscription Fees And Carrier Costs
Evidence and data. Interviewees said their organizations pay Attentive on a per-message basis to send each message in addition to a per-message carrier fee. The also pay annual list management fees based on the size of the organization’s total SMS subscriber list.
Modeling and assumptions. Forrester makes the following assumptions about the composite organization:
- The composite pays Attentive a per-message fee of $0.01 and a carrier fee of $0.0025 per message.
- The composite sends an average of 48 messages per year to each subscriber.
- The composite pays Attentive a $0.02 per subscriber list management fee totaling between $37,500 and $52,875 annually.
- Pricing may vary. Contact Attentive for additional details.
Risks. This cost will vary among organizations based on:
- The size of the organization’s SMS subscriber list as it affects list management fees.
- The frequency of the organization’s SMS communication as it relates to per-message and carrier fees.
Results. Forrester did not risk-adjust this cost because Attentive provided exact estimates for the composite organization. The organization pays a three-year, risk-adjusted total PV (discounted at 10%) of $3.4 million.
Attentive Subscription Fees And Carrier Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| E1 | Total SMS subscribers | Composite | 0 | 1,875,000 | 2,250,000 | 2,643,750 |
| E2 | Attentive list management fee per subscriber | Attentive | $0 | $0.0200 | $0.0200 | $0.0200 |
| E3 | Subtotal: List management fees | E1*E2 | $0 | $37,500 | $45,000 | $52,875 |
| E4 | SMS messages sent per subscriber | Composite | 0 | 48 | 48 | 48 |
| E5 | Attentive message cost per message | Attentive | $0 | $0.0100 | $0.0100 | $0.0100 |
| E6 | Subtotal: Message costs | E1*E4*E5 | $0 | $900,000 | $1,080,000 | $1,269,000 |
| E7 | Carrier cost per message | Assumption | $0 | $0.0025 | $0.0025 | $0.0025 |
| E8 | Subtotal: Carrier costs | E1*E4*E7 | $0 | $225,000 | $270,000 | $317,250 |
| Et | Attentive subscription fees and carrier costs | E3+E5+E8 | $0 | $1,162,500 | $1,395,000 | $1,639,125 |
| Risk adjustment | 0% | |||||
| Etr | Attentive subscription fees and carrier costs (risk-adjusted) | $0 | $1,162,500 | $1,395,000 | $1,639,125 | |
| Three-year total: $4,196,625 | Three-year present value: $3,441,210 | |||||
Attentive Implementation And Ongoing Management Costs
Evidence and data. Interviewees collectively described their organizations’ Attentive SMS Marketing implementations as relatively brief and requiring few internal technical resources. On average, interviewees reported implementation durations ranging from weeks to several months depending on the complexity of the organization’s program and/or customer base.
- The director of digital CRM at a retailer described using a “from scratch” implementation experience that launched in the middle of the summer and completed well ahead of the holiday season with a significant list of qualified subscribers.
- The senior director of direct marketing and personalization at a retailer said their organization seamlessly migrated its subscriber list to Attentive SMS Marketing from another SMS marketing provider.
Modeling and assumptions. This section explains how the modeling is done.
- The composite’s implementation period lasts 1.5 months and requires the efforts of three IT and marketing FTEs.
- The blended monthly rate of these IT FTEs is $10,000.
- Once Attentive SMS Marketing is deployed, three marketing resources allocate 10% of their time working with Attentive on SMS-program-related activities.
- The composite engages copywriters for campaign-related work, and they average 3 hours of work per campaign.
- The average annual salary of a marketing FTE is $114,750.
- The average hourly rate of a copywriter is $75.
Risks. This cost will vary among organizations based on:
- The scale and scope of the organization’s preexisting SMS marketing program as it relates to required marketing and IT staff implementation effort.
- The skill and capacity of the organization’s marketing resources as it relates to ongoing management of Attentive SMS Marketing.
- The requirement for copywriters as dictated by the organization’s marketing campaigns.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV of $158,000.
Attentive Implementation And Ongoing Management Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| F1 | Marketing/IT staff members tasked with implementation of Attentive | Interviews | 3 | 0 | 0 | 0 |
| F2 | Duration of implementation (months) | Interviews | 1.5 | 0 | 0 | 0 |
| F3 | Blended monthly cost of marketing/IT staff tasked with implementation of Attentive | Interviews | $10,000 | $0 | $0 | $0 |
| F4 | Internal personnel labor cost for implementation | F1*F2*F3 | $45,000 | $0 | $0 | $0 |
| F5 | Marketing personnel required for ongoing Attentive program oversight | Interviews | 0 | 3 | 3 | 3 |
| F6 | Percentage of time spent on Attentive oversight | Interviews | 0% | 10% | 10% | 10% |
| F7 | Average burdened rate of a marketing FTE | Assumption | $0 | $114,750 | $114,750 | $114,750 |
| F8 | Labor cost for ongoing Attentive oversight | F5*F6*F7 | $0 | $34,425 | $34,425 | $34,425 |
| F9 | Attentive SMS Marketing campaigns | Composite | 0 | 24 | 24 | 24 |
| F10 | Copywriter hours required per campaign | Interviews | 0 | 3 | 3 | 3 |
| F11 | Hourly rate of a copywriter | TEI standard | $0 | $75 | $75 | $75 |
| F12 | Campaign development cost | F9*F10*F11 | $0 | $5,400 | $5,400 | $5,400 |
| Ft | Attentive implementation and ongoing management costs | F4+F8+F12 | $45,000 | $39,825 | $39,825 | $39,825 |
| Risk adjustment | ↑10% | |||||
| Ftr | Attentive implementation and ongoing management costs (risk-adjusted) | $49,500 | $43,808 | $43,808 | $43,808 | |
| Three-year total: $180,923 | Three-year present value: $158,443 | |||||
Consolidated Three-Year Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits-
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
Cash Flow Analysis (Risk-Adjusted)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($49,500) | ($1,206,308) | ($1,438,808) | ($1,682,933) | ($4,377,548) | ($3,599,653) |
| Total benefits | $0 | $3,402,225 | $4,097,408 | $4,827,349 | $12,326,982 | $10,106,077 |
| Net benefits | ($49,500) | $2,195,918 | $2,658,600 | $3,144,417 | $7,949,434 | $6,506,424 |
| ROI | 181% | |||||
| Payback | <6 months |
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.
-
Flexibility represents 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.”
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. 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.
Appendix B: Endnotes
1 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.
PDF
