The Total Economic Impact™ Of Amplitude

Cost Savings And Business Benefits Enabled By Amplitude


Many firms struggle to effectively engage customers with continuous, individualized, and emotionally engaging experiences. Part of the challenge is in not understanding how customer journey influences why they engage, convert, and buy. Having the right tool to provide this visibility and help companies address these challenges can result in: 1) more new customers, 2) higher cross-sell and upsell potential, 3) increased customer retention, and 4) decreased cost to serve customers.

Amplitude is a digital analytics platform that provides organizations with full visibility into their customer journeys, which they can use to expose the realities of how customers are utilizing and engaging their companies. More than just improving visibility, organizations can then use the insights to build in more value for their customers that drives growth.

Amplitude commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Amplitude.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Amplitude on their organizations.

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives of organizations that use Amplitude. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a composite organization that is trying to improve its digital capabilities and operates a consumer-facing application as part of its overall strategy.

Interviewees noted that prior to using Amplitude, their organizations lacked true visibility into how customers were using their products and offerings because they did not have a comprehensive digital analytics platform. If the organizations did use any tools for analytics, the data and metrics were often unreliable, which led employees to spend time checking whether or not they had the right data and information. These limitations led to an inability to understand customer trends and journeys within their digital products and experiences, and this created a lack of confidence when introducing new features and improvements that impacted the business growth and market opportunities they could capture.

Interviewees shared that after investing in Amplitude, their organizations’ product teams, data scientists, and engineers were able to realize significant time savings in various analytics and experimentation activities. Additionally, users from other teams like marketing or growth could directly access insights from the platform instead of having to put in requests for data and engineering teams to resolve. As a result, their organizations could make data-driven decisions, experiment with new features, and take needed steps to grow business.

Key Findings

Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:

Revenue Impact Benefits

  • Business growth from acquiring new customers and growing user base. Because of the experimentation Amplitude enables, the composite organization is able to test new customer acquisition and growth strategies. These tests enable the composite to see what works, what increases the adoption of their digital products, and does not. Over three years, the composite organization’s new customer business growth is worth $1.78 million.

For , new customer business growth might be worth over three years.

  • Better monetization strategy of existing customer base. Amplitude’s experimentation capabilities support the monetization of the composite organization’s existing customer base. Over three years, improvements to its monetization strategy result in $2.1 million incremental profit to the composite organization.

For , improvements to its monetization strategy might result in in incremental profits over three years.

  • Better customer retention. Using Amplitude gives the composite organization the visibility to see exactly where in the customer journey someone is likely to fall off. As a result, it is able to take preventive action to improve its customer churn rate. Over three years, the better retention rate translates to $1.3 million of incremental profit for the composite organization.

For , a better retention rate might translate to in incremental profits over three years.

Operational Efficiency Benefits

  • Time savings in experiments and analytics activities. With Amplitude, the composite’s data scientists and engineers can go through an entire process of performing statistical analysis or projection of the outcome for a specific experiment in real time and the platform instantly generates the results. Over three years, these time savings for data scientists and engineers are worth $873,700 to the composite organization.

For , the time savings for data scientists and engineers might be worth over three years.

  • Significant reduction of ad hoc requests for data and engineering teams from other teams. Using Amplitude saves the time of the composite’s data scientists and engineers by reducing the number of ad hoc requests they have to address. With Amplitude, other business units self-serve to obtain the information they need without having to ask data scientists and engineers to generate that information. Over three years, these time savings are worth $151,400 to the composite organization.

For , these time savings might be worth over three years.

  • Cost savings from tech stack consolidation. Using Amplitude enables the composite organization to reduce its overall spend on its tech stack. Migrating from a different tool to Amplitude means the organization no longer needs to pay its legacy platform’s licensing fee. Instead of working with multiple vendors, the composite gains extra capabilities that enable it to reduce its stack to a single tool and payment. Over three years, this tech stack consolidation totals $1.6 million in savings for the composite organization.

For , tech stack consolidation might total in savings over three years.

Qualitative benefits. Benefits that provide value for the composite organization but that are not quantified in this study include:

  • Creating an insights-driven business (IDB).Forrester defines an insights-driven business as a firm that drives tangible business outcomes by acting on insights sourced from its enterprise data.2 Interviewees noted that having Amplitude allowed their organizations to become IDBs. Employees across different teams and units rely on Amplitude to generate the numbers and quantitative data they need to make certain business decisions.
  • Increased data literacy due to the democratization of analytics work. Interviewees shared that Amplitude’s self-service functionality promotes data democratization so that anyone at the company can execute analytics. It is no longer a process that can only data scientists, analysts, or engineers can handle. In turn, this elevates the work that more technical workers can do related to analytics and product experimentations.
  • Better knowledge management. Interviewees shared that Amplitude provided their organizations with the ability to better manage information they have related to their product usage and analytics. This means they can rely on Amplitude as their single source for full visibility on customer journeys and can work on exploring insights about certain trends on demand.

Costs. Three-year, risk-adjusted PV costs for the composite organization include:

  • Annual licensing for the Amplitude platform. The composite pays $675,000 for its Amplitude license in the first year, and this grows 3% each year. Over three years, this totals a PV of $1.8 million for the composite organization.

For , licensing for the Amplitude platform might total over three years.

  • Amplitude setup and training costs. Setting up Amplitude requires the composite organization to spend some time on feasibility assessment. Once it makes a decision, it also needs time to deploy the solution throughout the organization and to provide user training, which it does gradually on a rolling basis. Over three years, these time investments cost the composite organization $480,000.

For , time investments in setup and training might cost over three years.

  • Ongoing management costs. Once the composite organization sets up Amplitude, it dedicates a number of employees to manage it. This internal management includes performing data hygiene work, updating experimentation work, and periodically engaging with Amplitude account and customer success teams. Over three years, the cost of the time related to ongoing management of Amplitude totals $164,100.

The representative interviews and financial analysis found that a composite organization experiences benefits of $7.79 million over three years versus costs of $2.46 million, adding up to a net present value (NPV) of $5.34 million and an ROI of 217%.

might experience benefits of over three years versus costs of , adding up to a net present value of and an ROI of .

“More than the actual cost implications, if we build the wrong things, then this can all be a massive waste of time. Amplitude significantly increases the chance we will make the right decisions. The software cost is a small part of my [organization’s] overall budget, but it influences the vast majority of decisions we make.”

Director of product management, healthcare

Key Statistics

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    Return on investment (ROI)

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    Benefits PV

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    Net present value (NPV)

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    <6 months

Benefits (Three-Year)

Incremental profit growth from user growth Incremental profit growth from better monetization of existing customer base Revenue retention from preventing custom churn Time savings related to product development and management work Time savings in addressing ad hoc requests from other teams Cost savings related to tech stack

TEI Framework And Methodology

From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Amplitude.

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 Amplitude can have on an organization.

  1. Due Diligence

    Interviewed Amplitude stakeholders and Forrester analysts to gather data relative to Amplitude.

  2. Interviews

    Interviewed four representatives at organizations using Amplitude to obtain data about costs, benefits, and risks.

  3. Composite Organization

    Designed a composite organization based on characteristics of the interviewees’ organizations.

  4. 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.

  5. 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.


Readers should be aware of the following:

This study is commissioned by Amplitude 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 Amplitude.

Amplitude 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.

Amplitude provided the customer names for the interviews but did not participate in the interviews.

Consulting Team:

Adi Sarosa

Isabel Carey

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