A Forrester Total Economic Impact™ Study Commissioned By Coconut Software, April 2024
For financial institutions, delivering great customer experiences (CX) is essential to driving loyalty and revenue.1 Coconut Software helps banks and credit unions ensure staff are equipped to deliver exceptional experiences at every stage of the customer journey to drive satisfaction and business growth.
Coconut Software offers appointment scheduling, queue management, and video banking solutions built for financial institutions. Coconut’s suite enables banks and credit unions to bring customers and qualified staff together for productive conversations around high-value products including new accounts, loans, mortgages, and financial advice. With Coconut, financial institutions can improve revenue, growth, operational efficiency, and customer satisfaction.
Coconut Software commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) financial institutions may realize by deploying Coconut Software.2 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Coconut Software on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives from four financial institutions with experience using Coconut Software. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a financial institution with several physical branches.
Interviewees said that prior to using Coconut Software, their organizations lacked any formal appointment scheduling or queue management system. They explained this made it challenging for customers to connect for financial advice, which limited the ability of staff to adequately prepare for conversations with customers and didn’t offer leadership any insights into branch traffic patterns. These limitations led to poor CX, long handle times, and missed opportunities for business growth.
Interviewees said that after the investment in Coconut Software, their organizations gained capabilities that enabled customers to conveniently book time with qualified staff to address their needs. The organizations were also able to provide staff with more time and better access to important customer information that allowed them to prepare for conversations around high-value products. Key results from the investment include increased revenue, productivity gains, and improved CX.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
The representative interviews and financial analysis found that a composite organization experiences benefits of $2.21 million over three years versus total costs of $521,000, adding up to a net present value (NPV) of $1.69 million and an ROI of 325%.
Return on investment (ROI)
Benefits PV
Net present value (NPV)
Payback
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Coconut Software.
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 Coconut Software can have on an organization.
Interviewed Coconut Software stakeholders and Forrester analysts to gather data relative to Coconut Software.
Interviewed five representatives at four financial institutions using Coconut Software to obtain data about costs, benefits, and risks.
Designed a composite financial institution based on characteristics of the interviewees’ financial institutions.
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.
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 Coconut Software 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 Coconut Software.
Coconut Software 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.
Coconut Software provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Kara Luk
Chengcheng Dong
Role | Financial institution type | Assets under management | Annual engagements |
---|---|---|---|
Contact center manager | Credit union | $7.4B | 32,805 |
EVP and chief community banking officer | Bank | $6.2B | 6,204 |
SVP of retail operations | Credit union | $3B | 18,000 |
AVP of member experience Member delivery administrator | Credit union | $3B | 46,000 |
Before adopting Coconut software, the interviewees’ financial institutions lacked any formal appointment scheduling system. Two handled appointment scheduling manually using [a web-based email service and calendar]. The other two did not offer pre-booked appointments at all, which required customers to visit branches to be served on a first come, first served basis. Several interviewees said their financial institution also lacked queue management systems to effectively manage walk-in branch traffic.
The interviewees noted how their financial institutions struggled with common challenges, including:
The interviewees shared the following reasons their financial institutions selected Coconut Software:
Investment Objectives
The interviewees’ financial institutions searched for a solution that could:
Based on the interviews, Forrester constructed a TEI framework, a composite financial institution, 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 financial institution that offers a range of financial products and services to customers. It has $4.5 billion in total assets under management and several physical branches customers visit to conduct transactions, receive advice, and access services.
Before adopting Coconut Software, the composite had no formal appointment scheduling system. Administrative staff manually handled pre-booked appointments. Customers without pre-scheduled appointments were required to wait and be seen on a first come, first served basis.
Deployment characteristics. The composite financial institution adopts Coconut Software to streamline its appointment scheduling processes and to empower staff to better serve customers. It books 30,000 total appointments (including pre-scheduled and walk-in appointments) through Coconut Software in Year 1 of the investment, and the number of appointments grows by 5% each following year. Three-hundred staff members are users of Coconut Software, and this includes appointment-taking individuals, administrative staff who schedule appointments, and managers or other leaders that access Coconut’s data.
Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|
Atr | Incremental revenue from mortgages and loans | $318,314 | $656,642 | $1,006,918 | $1,981,874 | $1,588,568 |
Btr | Incremental revenue from deposit account growth | $66,697 | $136,345 | $209,535 | $412,577 | $330,742 |
Ctr | Productivity savings | $113,230 | $118,892 | $124,836 | $356,958 | $294,985 |
Total benefits (risk-adjusted) | $498,241 | $911,879 | $1,341,289 | $2,751,410 | $2,214,295 | |
Evidence and data. Interviewees told Forrester that Coconut Software helped their financial institutions increase pull-through rates and complete more product sales by improving customer and staff preparedness for appointments. With automated reminders and communications, customers arrived to appointments better informed and were more likely to have all the necessary documentation required to complete a product purchase. Additionally, staff gained access to key customer information, enabling them to effectively serve customers and provide personalized product recommendations. Interviewees shared that Coconut Software helped their financial institutions in the following ways:
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. Forrester recognizes these results may not be representative of all experiences. The impact of this benefit will vary depending on:
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.6 million.
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|
A1 | Appointments booked through Coconut Software | Composite | 30,000 | 31,500 | 33,075 |
A2 | Portion of appointments related to loans | Composite | 15% | 15% | 15% |
A3 | Loan appointments | A1*A2 | 4,500 | 4,725 | 4,961 |
A4 | Percent increase in loan pull-through rate attributed to Coconut Software | Interviews | 8.5% | 8.5% | 8.5% |
A5 | Additional loans sold due to Coconut Software (rounded) | A3*A4 | 383 | 402 | 422 |
A6 | Cumulative additional loans sold due to Coconut Software | Year 1:
A5 Years 2 & 3: A5+A5PY |
383 | 785 | 1,207 |
A7 | Average loan size | TransUnion | $7,700 | $7,700 | $7,700 |
A8 | Net interest margin | FDIC | 3% | 3% | 3% |
A9 | Subtotal: Incremental revenue from loans | A6*A7*A8 | $88,473 | $181,335 | $278,817 |
A10 | Portion of appointments related to mortgages | Composite | 10% | 10% | 10% |
A11 | Mortgage appointments | A1*A10 | 3,000 | 3,150 | 3,308 |
A12 | Percent increase in mortgage pull-through rate attributed to Coconut Software | Interviews | 1% | 1% | 1% |
A13 | Additional mortgages sold due to Coconut Software | A11*A12 | 30 | 32 | 33 |
A14 | Cumulative additional mortgages sold due to Coconut Software | Year 1:
A13 Years 2 & 3: A13+A13PY |
30 | 62 | 95 |
A15 | Average mortgage size | Composite | $343,800 | $343,800 | $343,800 |
A16 | Subtotal: Incremental revenue from mortgages | A8*A14*A15 | $309,420 | $639,468 | $979,830 |
At | Incremental revenue from mortgages and loans | A9+A16 | $397,893 | $820,803 | $1,258,647 |
Risk adjustment | ↓20% | ||||
Atr | Incremental revenue from mortgages and loans (risk-adjusted) | $318,314 | $656,642 | $1,006,918 | |
Three-year total: $1,981,874 | Three-year present value: $1,588,568 |
Evidence and data. Interviewees noted that Coconut Software made it easier for customers to connect with staff to discuss new account options that were best suited to them, which drove new customer acquisition. By providing convenient and flexible scheduling options, the interviewees’ financial institutions reduced barriers to engage with their institutions, which helped drive new customer growth and improved the efficiency and outcomes of account-related appointments. Interviewees shared that Coconut Software helped their financial institutions in the following ways:
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. Forrester recognizes these results may not be representative of all experiences. The impact of this benefit will vary depending on:
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $331,000.
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|
B1 | Total appointments | Composite | 30,000 | 31,500 | 33,075 |
B2 | Percent of appointments related to new deposit accounts | Composite | 15% | 15% | 15% |
B3 | Appointments related to new deposit accounts | B1*B2 | 4,500 | 4,725 | 4,961 |
B4 | Account growth attributed to Coconut Software | Interviews | 2.5% | 2.5% | 2.5% |
B5 | Additional account openings due to Coconut Software | B3*B4 | 113 | 118 | 124 |
B6 | Cumulative new accounts due to Coconut Software | Year 1:
B5 Years 2 & 3: B5+B5PY |
113 | 231 | 355 |
B7 | Average account size | Federal Research Board | $62,000 | $62,000 | $62,000 |
B8 | Return on average assets | FDIC | 1.12% | 1.12% | 1.12% |
Bt | Incremental revenue from deposit account growth | B6*B7*B8 | $78,467 | $160,406 | $246,512 |
Risk adjustment | ↓15% | ||||
Btr | Incremental revenue from deposit account growth (risk-adjusted) | $66,697 | $136,345 | $209,535 | |
Three-year total: $412,577 | Three-year present value: $330,742 |
Evidence and data. Interviewees shared that Coconut Software helped both appointment-scheduling staff and appointment-taking staff save time. They said that with scheduling tools and real-time calendar visibility, administrative staff and call-center agents reduced effort to schedule appointments. For bankers, advisors, and other appointment-takers, improved access to information ahead of appointments and pre-appointment communications reduced administrative work, handle times, and redundant conversations with customers. With Coconut Software, staff gained productivity in the following ways:
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. Forrester recognizes these results may not be representative of all experiences. The impact of this benefit will vary depending on:
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 $295,000.
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|
C1 | Appointments booked | Composite | 30,000 | 31,500 | 33,075 |
C2 | Average scheduling effort per appointment before using Coconut Software (minutes) | Interviews | 5 | 5 | 5 |
C3 | Reduction in scheduling effort with Coconut Software | Interviews | 50% | 50% | 50% |
C4 | Scheduling time saved per appointment (minutes) | C2*C3 | 2.5 | 2.5 | 2.5 |
C5 | Annual burdened cost for a scheduling resource | TEI standard | $54,300 | $54,300 | $54,300 |
C6 | Productivity recapture | TEI standard | 50% | 50% | 50% |
C7 | Subtotal: Productivity savings for appointment schedulers | C1*C4*(C5/2,080/60)*C6 | $16,316 | $17,132 | $17,989 |
C8 | Time savings per appointment due to Coconut Software (minutes) | Interviews | 10 | 10 | 10 |
C9 | Annual burdened cost for an appointment-taker | TEI standard | $91,100 | $91,100 | $91,100 |
C10 | Productivity recapture | TEI standard | 50% | 50% | 50% |
C11 | Subtotal: Productivity savings for appointment-takers | C1*C8*C9/2,080/60*C10 | $109,495 | $114,970 | $120,718 |
Ct | Productivity savings | C7+C11 | $125,811 | $132,102 | $138,707 |
Risk adjustment | ↓10% | ||||
Ctr | Productivity savings (risk-adjusted) | $113,230 | $118,892 | $124,836 | |
Three-year total: $356,958 | Three-year present value: $294,985 |
Interviewees mentioned the following additional benefits that their financial institutions experienced but were not able to quantify:
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Coconut Software and later realize additional uses and business opportunities, including:
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|
Dtr | Coconut Software fees | $22,000 | $163,350 | $163,350 | $163,350 | $512,050 | $428,227 |
Etr | Internal implementation, training, and ongoing management | $71,430 | $8,704 | $8,704 | $8,704 | $97,543 | $93,076 |
Total costs (risk-adjusted) | $93,430 | $172,054 | $172,054 | $172,054 | $609,593 | $521,303 | |
Evidence and data. Interviewees said their financial institutions paid Coconut Software one-time implementation services fees and pay annual licensing costs. Licensing costs were based on price per user, and they varied depending on the number of users, licensing tiers, add-on features, and other contract terms/agreements.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this benefit will vary depending on:
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $428,000.
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
D1 | Coconut Software fees | Composite | $20,000 | $148,500 | $148,500 | $148,500 | |
Dt | Coconut Software fees | D1 | $20,000 | $148,500 | $148,500 | $148,500 | |
Risk adjustment | ↑10% | ||||||
Dtr | Coconut Software fees (risk-adjusted) | $22,000 | $163,350 | $163,350 | $163,350 | ||
Three-year total: $512,050 | Three-year present value: $428,227 |
Evidence and data. The interviewees’ financial institutions incurred costs in the following areas:
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this benefit will vary depending on:
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $93,000.
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
E1 | Implementation time (months) | Interviews | 4 | ||||
E2 | Project manager resource FTEs | Interviews | 0.6 | ||||
E3 | Annual burdened salary for a project manager | TEI standard | $108,000 | ||||
E4 | IT resource FTEs | Interviews | 0.2 | ||||
E5 | Annual burdened salary for an IT resource | TEI standard | $114,750 | ||||
E6 | Operations resource FTEs | Interviews | 0.2 | ||||
E7 | Annual burdened salary for an operations resource | TEI standard | $94,500 | ||||
E8 | Change management champions | Composite | 20 | ||||
E9 | Time each champion spends per month on change-management activity (hours) | Interviews | 2 | ||||
E10 | Annual salary for a change-management champion | TEI standard | $72,700 | ||||
E11 | Subtotal: Implementation costs | E1*((E2*E3+E4* E5+E6*E7)/12)+ (E8*E9*E10/ 2,080)) |
$41,142 | ||||
E12 | Coconut users who participate in training | Composite | 300 | 60 | 60 | 60 | |
E13 | Training time required (hours) | Composite | 2 | 2 | 2 | 2 | |
E14 | Blended annual burdened cost for users | TEI standard | $72,700 | $72,700 | $72,700 | $72,700 | |
E15 | Subtotal: Training costs | E12*E13*E14/ 2,080 |
$20,971 | $4,194 | $4,194 | $4,194 | |
E16 | Ongoing admin labor FTEs | Interviews | 0.05 | 0.05 | 0.05 | ||
E17 | Annual burdened cost for an admin resource | TEI standard | $67,500 | $67,500 | $67,500 | ||
E18 | Subtotal: Ongoing management | E16*E17 | $3,375 | $3,375 | $3,375 | ||
Et | Internal implementation, training, and ongoing management | E11+E15+E18 | $62,113 | $7,569 | $7,569 | $7,569 | |
Risk adjustment | ↑15% | ||||||
Etr | Internal implementation, training, and ongoing management (risk-adjusted) | $71,430 | $8,704 | $8,704 | $8,704 | ||
Three-year total: $97,543 | Three-year present value: $93,076 |
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.
Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
---|---|---|---|---|---|---|
Total costs | ($93,430) | ($172,054) | ($172,054) | ($172,054) | ($609,593) | ($521,303) |
Total benefits | $0 | $498,241 | $911,879 | $1,341,289 | $2,751,410 | $2,214,295 |
Net benefits | ($93,430) | $326,187 | $739,825 | $1,169,235 | $2,141,817 | $1,692,992 |
ROI | 325% | |||||
Payback | <6 months | |||||
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.
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.
1 Source: Consumer Banking Trends, 2024, Forrester Research, Inc., January 17, 2024.
2 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.
3 Source: TransUnion Unsecured Personal Lending Industry Insights Report, Q3 2023, TransUnion.
4 Source: FDIC Quarterly, Volume 17, Number 2, Federal Deposit Insurance Corporation, 2023.
5 Source: Survey of Consumer Finances, 1989 - 2022, Board of Governors of the Federal Reserve System, 2023.
6 Source: FDIC Quarterly, Volume 17, Number 1, Federal Deposit Insurance Corporation, 2023.
7 Source: The ROI Of CX Transformation, Forrester Research, Inc., February 7, 2024.
8 Source: How Customer Experience Drives Business Growth, 2023, Forrester Research, Inc., October 13, 2023.
9 Ibid.
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