The Total Economic Impact™ Of Bloomreach Engagement
Cost Savings And Business Benefits Enabled By Bloomreach Engagement
A Forrester Total Economic Impact™ Study Commissioned By Bloomreach, July 2024
Bombarded with marketing messages across myriad channels, today’s digital consumers experience frustration and fatigue. This constant influx of offers and promotions can desensitize customers, prompting them to ignore or unsubscribe from communications altogether. It is increasingly crucial for marketers to engage the right audiences with relevant and timely messages to avoid customer churn. Organizations need an engagement solution that helps them align marketing with customers’ preferences and behavior to ensure a mutual value exchange.
Bloomreach Engagement is an omnichannel marketing automation platform with a built-in customer data platform that brings together over 13 different marketing channels into a single AI-powered platform. This allows marketers to simplify their daily operations, consolidate costs, and enable end-to-end personalization to boost engagement and conversions.
Bloomreach commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Bloomreach Engagement.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Bloomreach Engagement on their organizations.
Return on investment (ROI)
251%
Net present value (NPV)
$6.72M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives at four organizations that are currently using Bloomreach Engagement. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a multibillion-dollar fashion retailer with 60 million customers.
Interviewees said that prior to using Bloomreach Engagement, their organizations used legacy providers or standalone marketing solutions for email, SMS, and web personalization. However, these solutions were clunky to set up and use and had limited personalization capabilities. Interviewees also shared that setting up email campaigns in particular required extensive communication and inefficient back-and-forth with different parties. As email is one of the largest online sources of revenue, interviewees were motivated to find a modern solution to optimize their customer engagement process and eventually integrate additional channels like SMS and web.
With the agility of the Bloomreach Engagement platform, the interviewees said they can now manage their marketing campaigns independently and with more flexibility and agility.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Incremental profit from email marketing. Interviewees found that with Bloomreach’s AI and machine learning (ML) capabilities, they could now target customers with much more relevant messages and product recommendations, thus improving the engagement and conversion rates of emails sent with Bloomreach Engagement. Interviewees also shared that the increased engagement and conversions in turn improved email deliverability, creating a virtuous cycle for the email marketing funnel. For the composite organization, this is equivalent to $3.74 million in incremental profits in the first three years.
- Business growth from the SMS channel. Adopting Bloomreach Engagement also allowed interviewees to focus on growing other key channels like SMS and mobile messaging. For instance, two of the interviewees shared that by adding personalized web banners (or weblayers) to encourage mobile opt-in subscriptions, they grew their SMS databases quickly. The ability to seamlessly manage the two channels on the same platform allowed marketers to combine and enrich customer data from two different sources, enabling them to strategically grow these channels beyond what would have been possible with two channels managed independently. With this additional channel, the composite organization sees business growth of $2.83 million over three years.
- Incremental profits from improved agility and speed to market. Interviewees shared that Bloomreach Engagement made it much easier to plan and execute new campaigns. What used to take one to two weeks could now be achieved within a day. In addition, Bloomreach Engagement also made it easy for interviewees to set up web banners and other automations to engage site visitors/customers. For instance, organizations can add web banners to collect first-party data and marketing consent, instantly update all customer profiles, and set up triggered automations to engage with these customers based on their behavior on the site or on other channels. For the composite organization, these new campaigns and automations contribute to a further $543,000 in profit over three years.
- Cost savings from retiring legacy marketing solutions and processes. All four interviewees reported that in the process of switching to Bloomreach Engagement, they were able to retire their legacy email marketing solution and/or customer experience platform. Interviewees also shared that they significantly lowered their reliance on third-party services as they could now run most of the processes in-house themselves. One customer was able to eliminate third-party email marketing agency fees, while a second was able to cut back on development fees that applied when they had to update their product catalog on their legacy solution. For the composite organization, these savings amount to $2.29 million.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Improved job satisfaction for marketing employees. Interviewees told us that the ease of managing campaigns with Bloomreach Engagement cuts down on unnecessary communications with vendors/tech developers, saving marketing employees considerable time and effort. Marketing employees can now focus on more meaningful work, and they have more autonomy over the entire marketing process.
- Improved use of data and collaboration throughout the organization. Bloomreach Engagement provides a wide array of marketing data and insights that are useful not only for the CRM and marketing team but also for customer insights and other areas of digital and social media marketing. Interviewees told us that the data makes it easy to attribute revenue back to each channel, allowing marketers to assess the value of each individual channel. At the same time, this data can also be used to target individual customers on the channel they’re most likely to convert on — so marketers can only show SMS campaigns to those most likely to convert on SMS and use less expensive channels for everyone else.
- Enhanced customer insights. Interviewees shared that having data and oversight for each individual customer’s journey and behavior was incredibly valuable and complemented the macro view of customers from web analytics data.
- Personalized customer experience. Interviewees told us that marketers can use Bloomreach Engagement to personalize communications to customers, ensuring that they receive only hyper-relevant, value-adding content at the right time and on the right channel. These improved experiences can then result in higher conversions and revenue.
- Optimization of attribution and targeting in other online channels. Bloomreach Engagement enables marketers to collect first-party data on an individual level (for those who have opted in and given consent); interviewees shared that this helps them build an accurate and complete view of individual customers. In turn, this allows marketers to target customers with more relevant content and ads in other channels (e.g., social media), thus improving their overall return on ad spend.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Bloomreach Engagement fees. The service fees of Bloomreach Engagement for the composite organization are $2.5 million over three years; these fees depend largely on the volume of messages sent out.
- Implementation and training costs. The upfront costs of deploying Bloomreach Engagement include implementation fees for help with integrating Bloomreach with other existing marketing and product management solutions; resources (time) spent on implementing the solution across the organization over a four-month period; and time spent on learning how to use Bloomreach Engagement. For the composite organization, these upfront costs total $175,000.
The representative interviews and financial analysis found that a composite organization experiences benefits of $9.40 million over three years versus costs of $2.68 million, adding up to a net present value (NPV) of $6.72 million and an ROI of 251%.
Key Statistics
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Return on investment (ROI)
251%
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Benefits PV
$9.40M
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Net present value (NPV)
$6.72M
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Payback
<6 months
Benefits (Three-Year)
Incremental profit from email marketing Business growth from SMS channel Increased profits from introducing automations and accelerating speed to market of campaigns Cost savings from retiring legacy email marketing solutionsTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Bloomreach Engagement.
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 Bloomreach Engagement can have on an organization.
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Due Diligence
Interviewed Bloomreach stakeholders and Forrester analysts to gather data relative to Bloomreach Engagement.
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Interviews
Interviewed five representatives at four organizations using Bloomreach Engagement to obtain data about costs, benefits, and risks.
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Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
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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.
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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 Bloomreach 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 Bloomreach Engagement.
Bloomreach 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.
Bloomreach provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Josephine Phua
Drivers leading to the Bloomreach Engagement investment
Interviews
| Role | Industry | Region | Experience Using Bloomreach Engagement |
|---|---|---|---|
| President | Home furnishing | United States | 2.5 years |
| Director, email marketing | Fashion accessories | Europe HQ with global operations | 3.5 years |
| CRM
manager Customer insights manager |
Fashion | Europe HQ with global operations | 2.5 years |
| Head of CRM | Fashion | Europe HQ with global operations | 1.5 years |
Key Challenges
The interviewees noted that prior to adopting Bloomreach Engagement, they had legacy marketing solutions that were clunky to use and had limited functionalities. Consequently, their organizations struggled with common pain points, including:
- Lengthy, manual processes to set up, execute, and manage email campaigns. With legacy architecture that required moderate coding experience, marketers depended on third-party agencies and developers to help set up and execute email campaigns. This could often take one to two weeks, making it nearly impossible for teams to be agile and flexible. As a result, there was a limit to how fast they could grow their email marketing operations and on their ability to run “last-minute campaigns.”
- Costly marketing operations. Working with outdated solutions meant that teams needed to rely on highly technical expertise and resources to help set up audiences and product offers properly — for instance, extracting the right audience segment from their CRM system and ensuring that the product catalog from their ERP system was synched with their email service provider. The development hours required to maintain well-functioning marketing operations quickly racked up, with two interviewees sharing that it cost them upwards of $100,000 per year.
- Lack of personalization capabilities. Their legacy marketing solutions also had limited personalization capabilities. “At best, we could only create demographic segments and send emails based on those,” one interviewee shared. Another interviewee said that with their old solution, “recommendations were based on what content customers interacted with in the past, not what they are shopping for now.” This meant that customers did not always receive relevant communications and product recommendations, leading to lost opportunities.
Overall, their legacy marketing solutions meant that interviewees found it hard to scale up their marketing operations to match their growth ambitions.
Solution Requirements
The interviewees’ organizations searched for a solution that:
- Is easy to use. They wanted a system that allows marketers to manage campaigns independently, without the need for deep coding knowledge.
- Integrates easily with other platforms. They needed a solution that could streamline the management of different channels and data.
- Has advanced functionalities. The solution needs to support the personalization of campaigns across various channels.
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 organizations of the four 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. It is a multibillion-dollar global fashion retailer with a strong brand and global sales. It has a large customer base of 60 million customers in 100+ countries, and its online channels account for 20% of its annual revenue. It has set up separate functions for CRM, customer insights, e-commerce, and digital marketing, with a global center of excellence that oversees and supports local teams. While larger markets may have more resources available to run specific functions, smaller markets often use general marketers who are responsible for executing all marketing functions.
Deployment characteristics. The composite organization deploys Bloomreach Engagement across all markets, following a four-month implementation period.
While the composite organization and deployment characteristics are built with a retail organization in mind, the financial model is also partially applicable to other B2C organizations. However, different industry benchmarks will apply.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Incremental profit from email marketing | $1,254,313 | $1,505,176 | $1,806,211 | $4,565,700 | $3,741,265 |
| Btr | Business growth from the SMS channel | $1,037,837 | $1,141,620 | $1,255,783 | $3,435,240 | $2,830,464 |
| Ctr | Incremental profits from improved agility and speed to market | $176,847 | $220,077 | $267,187 | $664,111 | $543,393 |
| Dtr | Cost savings from retiring legacy marketing solutions and processes | $819,000 | $919,800 | $1,040,760 | $2,779,560 | $2,286,649 |
| Total benefits (risk-adjusted) | $3,287,997 | $3,786,673 | $4,369,940 | $11,444,610 | $9,401,771 | |
Incremental Profit From Email Marketing
Evidence and data. Interviewees shared that Bloomreach’s AI-powered capabilities improved multiple aspects of their email marketing programs:
- Email deliverability and open rates. With the ease of performing A/B testing to optimize subject lines, interviewees quickly saw email open rates improve. Bloomreach Engagement could also suggest optimal send times and set smart frequency policies to further improve email deliverability and inbox placements. Across the four interviewees, the average improvement in email deliverability was 12.4%, while open rates improved by 35.3%.
- Clicks and engagement. With Bloomreach Engagement, interviewees were able to stitch customer identities from different sources (e.g., in-store and online activity), which allowed them to collect customer insights at an individual level and to personalize messaging and communications with hyper-relevant content and product recommendations. One interviewee described Bloomreach Engagement’s contextual personalization capabilities as “close to matching the experience of a salesperson recommending products to you.” For the interviewees, this was also a significant upgrade over their previous solution. Overall, clickthrough rates increased 83% with Bloomreach.
- Conversion. With more relevant messaging and product recommendations, interviewees found that audiences were also 27% more likely to make a purchase. Although two interviewees provided anecdotal evidence of upselling and increased basket sizes, they acknowledged that there were also numerous external factors influencing basket sizes, such as seasonality, sales cycles, and macroeconomic factors. For this financial model, Forrester assumes a fixed average order value.
Overall, interviewees shared that the increased engagement and conversions in turn improved email deliverability, creating a virtuous cycle for the email marketing funnel.
Modeling and assumptions. For the composite organization, Forrester assumes:
- 800 million emails are sent out annually. Before using Bloomreach Engagement, the baseline deliverability rate is 87.8% — i.e., 87.8% are delivered to the customer inbox — and the baseline email open rate is 29.5%. With Bloomreach Engagement, these improve to 98.7% and 39.9%, respectively.
- Before using Bloomreach Engagement, the clickthrough and web conversion rates are 1.2% and 2.2%, respectively. With Bloomreach Engagement, these improve to 2.2% and 2.8%, respectively.
- The average order value is $100.
Risks. The composite organization is a global fashion retailer, so differences across other organizations that may impact the benefits include:
- Inherent variances in different retail verticals, such as web conversion rates, average order frequency, and average order value.
- Baseline marketing performance and the scale of marketing operations.
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 $3.74 million.
Improvements In Email Marketing Metrics With Bloomreach Engagement
| Metric | Before | After | Percentage Improvement |
|---|---|---|---|
| Email deliverability rate | 87.8% | 98.7% | 12% |
| Email open rate | 29.5% | 39.9% | 35% |
| Clickthrough rate | 1.2% | 2.2% | 83% |
| Web conversion rate | 2.2% | 2.8% | 27% |
Incremental Profit From Email Marketing
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Number of emails sent | Composite | 800,000,000 | 960,000,000 | 1,152,000,000 | |
| A2 | Email deliverability rate: before Bloomreach | Interviews | 87.8% | 87.8% | 87.8% | |
| A3 | Emails delivered: before Bloomreach | A1*A2 | 702,400,000 | 842,880,000 | 1,011,456,000 | |
| A4 | Email open rate: before Bloomreach | Interviews | 29.5% | 29.5% | 29.5% | |
| A5 | Emails opened: before Bloomreach | A3*A4 | 207,208,000 | 248,649,600 | 298,379,520 | |
| A6 | Clickthrough rate: before Bloomreach | Interviews | 1.2% | 1.2% | 1.2% | |
| A7 | Conversion rate: before Bloomreach | Interviews | 2.2% | 2.2% | 2.2% | |
| A8 | Subtotal: email conversions before Bloomreach | A5*A6*A7 | 54,703 | 65,643 | 78,772 | |
| A9 | Email deliverability rate: with Bloomreach | Interviews | 98.7% | 98.7% | 98.7% | |
| A10 | Emails delivered: with Bloomreach | A1*A8 | 789,600,000 | 947,520,000 | 1,137,024,000 | |
| A11 | Email open rate: with Bloomreach | Interviews | 39.9% | 39.9% | 39.9% | |
| A12 | Emails opened: with Bloomreach | A9*A10 | 315,050,400 | 378,060,480 | 453,672,576 | |
| A13 | Clickthrough rate: with Bloomreach | Interviews | 2.2% | 2.2% | 2.2% | |
| A14 | Conversion rate: with Bloomreach | Interviews | 2.8% | 2.8% | 2.8% | |
| A15 | Subtotal: email conversions with Bloomreach | A12*A13*A14 | 194,071 | 232,885 | 279,462 | |
| A16 | Incremental email conversions with Bloomreach | A15-A8 | 139,368 | 167,242 | 200,690 | |
| A17 | Average order value | Composite | $100 | $100 | $100 | |
| A18 | Additional revenue generated through increased engagement | A16*A17 | $13,936,813 | $16,724,176 | $20,069,011 | |
| A19 | Profit margin | Industry benchmark | 10% | 10% | 10% | |
| At | Incremental profit from email marketing | A18*A19 | $1,393,681 | $1,672,418 | $2,006,901 | |
| Risk adjustment | ↓10% | |||||
| Atr | Incremental profit from email marketing (risk-adjusted) | $1,254,313 | $1,505,176 | $1,806,211 | ||
| Three-year total: $4,565,700 | Three-year present value: $3,741,265 | |||||
Business Growth From The SMS Channel
Evidence and data. Adopting Bloomreach Engagement also gave interviewees the opportunity to grow other marketing channels like SMS and mobile messaging. Two interviewees shared that by using Bloomreach Engagement’s web banners (or weblayers) to secure mobile opt-in subscriptions, they were able to grow their SMS and mobile messaging database quite quickly.
With mobile data integrated into the customer data platform and SMS integrated into Bloomreach Engagement alongside email, marketers could seamlessly manage different channels. Just as they did with emails, marketers could personalize the SMS and mobile messages they sent to individual customers’ profiles and buying behavior.
Modeling and assumptions. For this financial model, Forrester assumes:
- The composite organization grows its SMS and mobile messaging marketing database by 1.2 million.
- On average, it sends out SMS campaigns biweekly.
- The SMS clickthrough rate is 14.3%, and web conversion rates are similar to those of email messages.
Risks. As with email marketing, some factors that may impact the benefits include:
- Inherent variances in different retail verticals, such as web conversion rates, average order frequency, and average order value.
- Baseline marketing performance and scale of marketing operations.
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 $2.83 million.
Business Growth From The SMS Channel
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | Growth of SMS database | Interviews | 1,200,000 | 1,320,000 | 1,452,000 | |
| B2 | Total messages sent | 24*B1 | 28,800,000 | 31,680,000 | 34,848,000 | |
| B3 | SMS clickthrough rate | Interviews | 14.3% | 14.3% | 14.3% | |
| B4 | Conversion rate | A14 | 2.8% | 2.8% | 2.8% | |
| B5 | New revenue from SMS | Industry benchmark | $11,531,520 | $12,684,672 | $13,953,139 | |
| B6 | Profit margin | Industry benchmark | 10% | 10% | 10% | |
| Bt | Business growth from the SMS channel | B8*B9 | $1,153,152 | $1,268,467 | $1,395,314 | |
| Risk adjustment | ↓10% | |||||
| Btr | Business growth from the SMS channel (risk-adjusted) | $1,037,837 | $1,141,620 | $1,255,783 | ||
| Three-year total: $3,435,240 | Three-year present value: $2,830,464 | |||||
Incremental Profits From Improved Agility And Speed To Market
Evidence and data. Prior to Bloomreach, interviewees shared that email marketers often had to rely on third parties, such as development teams and external agencies, with the relevant technical expertise to execute campaigns — for instance, to link their product catalog, create specific audiences (or segments) for emails, and design email messages. Waiting on these back-and-forth communications was time-consuming and a bottleneck for the team. Bloomreach Engagement empowered marketers to plan and execute email campaigns by themselves without the need to involve external parties.
Furthermore, it also made it much easier to set up web banners and other automations to collect zero- and first-party data, including consent and opt-in subscriptions. The team could then quickly set up automated campaigns and messages to engage with these customers. For instance, some of the common automation programs that interviewees used include birthday reminders, welcome discounts, gamification banners, and exit-intent banners.
All interviewees expressed that this sped up their work significantly; more importantly, it offered a lot more flexibility and agility, allowing them to scale up their operations.
“We used to have our internal database in a data lake. To run audience segmentation, we had to send in a request to our data engineering team, and they might take two weeks to fulfill that request. Now, with Bloomreach Engagement, we can create an audience set within seconds,” shared the email marketing director at a fashion retailer.
“We can run a lot more last-minute campaigns because we save time. Even though we’re sending to multiple markets, it is easy and more seamless with Bloomreach versus the previous supplier,” shared the CRM manager at another fashion retailer.
“Analytics, segmentation, audience targeting — all these things can be done by an analyst, marketer, or email designer on their own, and we don’t have to go to IT. You don’t have to know specific coding languages like with big data warehouses. It’s all there, and it’s very fast. I would say that was the biggest thing that really surprised me,” said the president at a home furnishing retailer.
Modeling and assumptions. For the composite organization, Forrester assumes:
- It has 60 million customers in its database.
- It introduces 15 weblayers and automations in the first year and an additional five in each subsequent year.
- It also doubles the number of standard email campaigns from 24 per year to 48 — i.e. from biweekly to weekly.
Risks. Some factors that could impact the benefits include:
- Current marketing practices and the scale of operations.
- The availability of resources. Interviewees mentioned that inefficient processes were an obstacle to scaling up, but other organizations may need to provision additional resources to support these additional activities.
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 $543,000.
Incremental Profits From Improved Agility And Speed To Market
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Database (number of customers) | Composite | 60,000,000 | 63,000,000 | 66,150,000 | |
| C2 | New weblayers and automations introduced | Interviews | 15 | 20 | 25 | |
| C3 | Audience reached per weblayer/automation | 5%*C1 | 3,000,000 | 3,150,000 | 3,307,500 | |
| C4 | Incremental revenue from weblayers and automation | C2*C3*A9*A11*A13*A14*A17 | $1,091,650 | $1,528,309 | $2,005,906 | |
| C5 | Increase in number of email campaigns | Interviews | 24 | 24 | 24 | |
| C6 | Audience reached per campaign | 2.5%*C1 | 1,500,000 | 1,575,000 | 1,653,750 | |
| C7 | Incremental revenue from improving the speed to market of campaigns |
C5*C6*A9*A11* A13*A14*A17 |
$873,320 | $916,986 | $962,835 | |
| C8 | Profit margin | Industry benchmark | 10% | 10% | 10% | |
| Ct | Incremental profits from improved agility and speed to market | C4*C5 | $196,497 | $244,530 | $296,874 | |
| Risk adjustment | ↓10% | |||||
| Ctr | Incremental profits from improved agility and speed to market (risk-adjusted) | $176,847 | $220,077 | $267,187 | ||
| Three-year total: $664,111 | Three-year present value: $543,393 | |||||
Cost Savings From Retiring Legacy Marketing Solutions And Processes
Evidence and data. All four interviewees reported that in the process of switching to Bloomreach Engagement, they were able to retire their legacy email marketing solution and/or customer experience platform. One common pain point with these legacy solutions was that they required intermediate-level technical expertise in data analytics and/or coding. As a result, two of the interviewees also incurred hefty third-party agency fees. While the first had to outsource the email marketing function to an external agency in some markets, the second incurred additional fees every time it had to update its product catalog.
Modeling and assumptions. For the composite organization, Forrester assumes:
- The legacy marketing solutions costs vary based on the number of campaigns.
- Agency and development fees are about $350,000 per year.
Risks. Some factors that could impact the benefits include:
- The costs of existing marketing solutions.
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 $2.29 million.
Cost Savings From Retiring Legacy Marketing Solutions And Processes
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| D1 | Cost savings from retiring legacy marketing solutions and processes | Interviews | $560,000 | $672,000 | $806,400 |
| D2 | Avoided third-party agency and development fees | Interviews | $350,000 | $350,000 | $350,000 |
| Dt | Cost savings from retiring legacy marketing solutions and processes | D1+D2 | $910,000 | $1,022,000 | $1,156,400 |
| Risk adjustment | ↓10% | ||||
| Dtr | Cost savings from retiring legacy marketing solutions and processes (risk-adjusted) | $819,000 | $919,800 | $1,040,760 | |
| Three-year total: $2,779,560 | Three-year present value: $2,286,649 | ||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Improved job satisfaction for marketing employees. With Bloomreach Engagement, our interviewees told us that marketers could focus on more meaningful work like campaign planning and strategizing and less on the manual aspects of email marketing like communicating with vendors and tech developers, saving them considerable time and effort in the process. They also regained autonomy over email marketing operations, as they now have more control over timelines and changes.
- Improved use of data and collaboration throughout the organization. Bloomreach Engagement provides a wide array of marketing data and insights that are useful not only for the CRM team but also for customer insights and other areas of digital and social media marketing. One interviewee told us that: “Because [our] e-commerce and digital marketing teams can easily run the analysis on their own without involving developers, they could troubleshoot or QA journeys on their own. For instance, if a tracked metric suddenly dropped (e.g., if a metric dropped from 96% to 85%), they can narrow down why and fix it quickly.”
- Enhanced customer insights. Interviewees also unanimously agreed that they had a much better view of the customer with Bloomreach Engagement — and specifically that they could now have an overview of each individual customer’s journey and behavior. The president of a home furnishings retailer said: “With web analytics, everyone is anonymous and their journeys and paths are hard to tease out. The data is really high level, whereas now we can run more sophisticated analysis on unique users.”
- Personalized customer experience. With Bloomreach Engagement, the marketers we interviewed said they can personalize communications to customers and ensure that they receive only hyper-relevant, value-adding content at the right time. One interviewee shared that prior to Bloomreach: “It was really hard to personalize the content of the email we wanted to send. Product recommendations were based on what content you were interacting with in the past, and not on what you are shopping for now.”
- The optimization of advertising costs in other online channels. Bloomreach Engagement enables marketers to collect first-party data on an individual level (for those who have opted in and given consent); interviewees told us this helps them build an accurate and complete view of individual customers. In turn, this allows marketers to optimize advertising audiences in other channels — for instance, by targeting acquisition ads only to new customers, dropping customers from audiences when they make a purchase, or limiting ad spend on customers who are already engaged via email and SMS. Overall, this reduces customer acquisition costs and improves the return on ad spend.
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Bloomreach Engagement and later realize additional uses and business opportunities. For example, interviewees shared several Bloomreach capabilities and use cases that they planned to implement in the future:
- Integration with in-store data to build unified views of customers. In-store experiences are still a vital touchpoint of the customer journey for many retailers, with many customers relying on brick-and-mortar stores to try products in-person, get recommendations from salespeople, or make decisions on fabric types and colors. Two interviewees shared that they were already exploring the possibilities of integrating their physical stores with Bloomreach Engagement but were facing limitations with their outdated point-of-sale data architecture. The integration of online and offline customer data will further refine retailers’ view of customers and close the loop on what is now a distinct, standalone channel.
- AI-enabled personalization and customer experiences. As Bloomreach continues to build its Loomi AI capabilities, interviewees told us that marketers will also be able to leverage AI to further optimize their personalization — for instance, by uncovering previously undiscovered segments of customers, moving spend toward their most profitable segments, or making more specific and personalized product recommendations, leading to higher conversions. Furthermore, as AI continues to evolve, retailers will be able to leverage new innovations because their data foundation and web/e-commerce integrations are already in place.
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 | Bloomreach Engagement fees | $0 | $840,000 | $1,008,000 | $1,209,600 | $3,057,600 | $2,505,485 |
| Ftr | Cost of implementation and training | $175,224 | $0 | $0 | $0 | $175,224 | $175,224 |
| Total costs (risk-adjusted) | $175,224 | $840,000 | $1,008,000 | $1,209,600 | $3,232,824 | $2,680,709 | |
Bloomreach Engagement Fees
Evidence and data. Bloomreach Engagement fees consist of module fees and usage fees based on the volume of activities, such as new customers added to the database or messages sent. At the enterprise level, this includes an assigned customer success team that is on hand to help marketers navigate the platform more efficiently as well as access to training modules for marketers.
Modeling and assumptions. For the composite organization, these fees include:
- Out-of-the-box features and capabilities like omnichannel orchestration, email, mobile and app marketing, SMS and messaging, ads and retargeting, web personalization, as well as insights and analytics powered by AI.
- Usage fees based on 800 million emails sent annually.
Risks. Costs may vary widely based on the modules deployed, the number of channels included, and the volume of activities.
Results. To account for these risks and variances, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.50 million.
Bloomreach Engagement Fees
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| E1 | Bloomreach Engagement fees | Composite | $800,000 | $960,000 | $1,152,000 | ||
| Et | Bloomreach Engagement fees | E1 | $0 | $800,000 | $960,000 | $1,152,000 | |
| Risk adjustment | ↑5% | ||||||
| Etr | Bloomreach Engagement fees (risk-adjusted) | $0 | $840,000 | $1,008,000 | $1,209,600 | ||
| Three-year total: $3,057,600 | Three-year present value: $2,505,485 | ||||||
Cost Of Implementation And Training
Evidence and data. The major component of implementation costs is the professional service fees paid to Bloomreach for migration to the new platform, integration with other e-commerce and marketing solutions, and the time and resources invested in the implementation process. Interviewees shared that full implementation took between three to five months, although most were able to start sending emails through Bloomreach Engagement within two weeks.
Beyond this, marketers also spent between 20 to 40 hours on training modules that Bloomreach provided.
Modeling and assumptions. For the composite organization, Forrester assumes:
- Implementation fees of $100,000, similar to the interviewees’ organizations.
- An implementation period of four months.
- 35 marketers globally will go through training on how to use Bloomreach Engagement.
Risks. Factors that may impact the cost include:
- The complexity of the data architecture and solutions that need to be integrated with Bloomreach Engagement.
- The size of the marketing teams that need access to Bloomreach Engagement.
Results. To account for these risks, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $175,000.
Cost Of Implementation And Training
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| F1 | Implementation fees | Composite | $100,000 | |||
| F2 | Length of implementation (weeks) | Interviews | 16 | |||
| F3 | Number of FTEs involved in implementation | Interviews | 8 | |||
| F4 | Time spent on implementation per FTE per week (hours) | Interviews | 4 | |||
| F5 | Fully burdened hourly rate for an FTE involved in Bloomreach implementation | Industry benchmark | $60 | |||
| F6 | Subtotal: cost of implementation | F2*F3*F4*F5 | $26,880 | |||
| F7 | Number of power users | Interviews | 5 | |||
| F8 | Time spent on training through Bloomreach Academy (hours) | Interviews | 40 | |||
| F9 | Number of active users | Interviews | 30 | |||
| F10 | Time spent on training through Bloomreach Academy (hours) | Interviews | 20 | |||
| F11 | Fully burdened hourly rate for an FTE involved in Bloomreach training | Industry benchmark | $50 | |||
| F12 | Subtotal: training costs | [(D7*D8)+ (D9*D10)]*D11 |
$40,000 | |||
| Ft | Cost of implementation and training | F1+F6+F12 | $166,880 | $0 | $0 | $0 |
| Risk adjustment | ↑5% | |||||
| Ftr | Cost of implementation and training (risk-adjusted) | $175,224 | $0 | $0 | $0 | |
| Three-year total: $175,224 | Three-year present value: $175,224 | |||||
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 | ($175,224) | ($840,000) | ($1,008,000) | ($1,209,600) | ($3,232,824) | ($2,680,709) |
| Total benefits | $0 | $3,287,997 | $3,786,673 | $4,369,940 | $11,444,610 | $9,401,771 |
| Net benefits | ($175,224) | $2,447,997 | $2,778,673 | $3,160,340 | $8,211,786 | $6,721,062 |
| ROI | 251% | |||||
| Payback period (months) | <6 | |||||
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
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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.
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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.
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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.
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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.
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