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Executive Summary
Growing digital expectations and competition for empowered consumers and business buyers is forcing organizations to invest in new capabilities that enable them to optimize the value of their customer interactions. Businesses across every industry are looking to digital experience technologies in order to deliver contextually relevant and personalized digital content, with 51% of global software decision makers revealing that they are increasing spend on digital experience solutions over the next 12 months.1 These investments in experience are well-founded:
This study examined the potential return on investment (ROI) enterprises may realize by adopting Adobe Experience Cloud and transforming into an experience-driven business. Adobe Experience Cloud — consisting of Adobe Analytics, Adobe Audience Manager, Adobe Experience Manager, Adobe Campaign, Adobe Advertising Cloud, Adobe Target, and Magento Commerce Cloud — is an integrated cloud platform that serves as the foundation for delivering experiences across marketing, analytics, advertising, and commerce.
To better understand the benefits, costs, and risks associated with this investment, thee were nine customers interviewed across seven industries with an average of nearly five Adobe Experience Cloud products implemented, above average product adoption scores, and years of experience using these solutions within their marketing, customer experience, and analytics functions.
Prior to using Adobe Experience Cloud, interviewed organizations struggled to get a 360-degree view of their customers using disparate, homegrown and third-party marketing and digital experience technologies that were poorly integrated. Furthermore, organizations had no way to empirically test what impacted the customer experience, thereby leading to organizational gaps in what stakeholders knew would help to engage, convert, and retain customers across the customer life cycle.
Key Findings
The following risk-adjusted present value (PV) quantified benefits are representative of those experienced by the interviewed customers, as realized by the composite organization built for this study. Similar to Adobe customers interviewed for this study, the composite organization has an above average Adobe product adoption score using multiple Adobe Experience Cloud solutions including Adobe Analytics, Adobe Audience Manager, Adobe Experience Manager, Adobe Campaign, Adobe Advertising Cloud, and Adobe Target.
Financial growth: Interviewed organizations leveraged Adobe Experience Cloud to drive CX transformation that resulted in the following superior business results across the customer life cycle:
A 14% year-over-year (YOY) growth in new unique visitor site traffic by Year 3 of the analysis. Organizations drove significant improvements in customer acquisition and brand engagement metrics by leveraging behavioral analytics to optimize sites for organic search and using lookalike modeling and advertising retargeting to identify, activate, and engage new high value customer segments. Furthermore, improved content velocity and effectiveness using Adobe Experience Manager helped drive earned media traffic growth. Over three years, the uplift in profit from increased traffic for the composite organization totaled a PV of just under $5 million.
A 25% increase in web and mobile conversion rates. Interviewees built a testing culture, enabling them to deliver personalized and optimized messaging, promotions, and content to targeted audiences at scale. Collectively, these capabilities improved customer engagement and lead quality, ultimately resulting in incremental closed business. For the composite organization, Adobe Experience Cloud drove a 25% increase in conversion rate by Year 3 of the analysis, generating a PV of over $11 million in incremental profit over the three-year analysis.
A 10% uplift in average order values over three years through improved targeting and messaging to high value segments. Using Adobe Audience Manager to identify and activate high value audiences and a combination of Adobe Target and Adobe Experience Manager to provide consistent, highly personalized omnichannel engagement, the composite organization was able to grow average order values by 10%, generating a PV of $3.7 million in additional profit over three years.
A 10% YOY growth in loyalty program membership and a 60% three-year increase in upselling loyalty program members. Adobe Experience Cloud helped organizations exceed expectations for customer experience metrics, improving customer engagement and helping drive loyalty and rewards program membership growth. Improved loyalty program membership in turn enabled organizations to personalize each loyal members’ experience on the website using Adobe Target, helping drive upselling and repeat purchase metrics. Loyalty program membership growth and improved upselling conversion rates generated a PV of over $2.8 million in additional profit for the composite organization over three years.
Operational productivity gains: Interviewees boosted customer digital engagement and streamlined marketing, customer insights, digital analytics, and experience team business processes using Adobe Experience Cloud. The following risk-adjusted present value (PV) quantified benefits are representative of those experienced by the interviewed organizations:
› Repurposed 2.5 FTE analyst and digital marketing resources to testing and personalization activities. By streamlining several formerly manual, labor-intensive data analysis, reporting, segmentation, and multivariate testing activities, the composite organization was able to save time and refocus the equivalent of 2.5 FTE analyst and digital marketing resources to personalization and cross-channel optimization.
Web, mobile, and product page content changes that would take nearly a week could be implemented in hours using Adobe Experience Manager. By consolidating redundant content management systems (CMS) and leveraging Experience Fragments in Adobe Experience Manager to propagate content changes across channels, organizations increased content velocity. In addition, Adobe Experience Manager helped marketing to implement content changes in a fraction of the time of their legacy systems without the involvement of IT. Over three years, the efficiencies from content management totaled a PV of over $370,000.
Marketing used Adobe Campaign to build campaigns in half the time it took with their legacy tools. Using Adobe Campaign, Adobe Experience Manager, and Adobe Target, organizations reduced campaign execution time from at least five weeks to two-and-a-half weeks. Over three years, the efficiencies from faster campaign execution totaled a PV of $3.9 million.
A 40% reduction in contact center call volumes from self-service customer care. Organizations were able to empower customers with contextually relevant self-service digital content that helped resolve customer service requests faster, improving the customer experience and reducing contact center call volumes. Over three years, customer care center calls were reduced by 40%, saving the composite organization a PV of $1.7 million.
Customer acquisition and technology cost savings: Organizations were able to retire and consolidate legacy content management and analytics tools, saving both technology and IT administration time and labor. Furthermore, organizations accrued a variety of media, agency, and customer acquisition cost savings by bringing audience management in- house and optimizing their campaign and media spend. The following risk- adjusted present value (PV) quantified benefits are representative of those experienced by the interviewed organizations:
› Customer retention improved by 2% saving nearly $1.5 million in customer replacement costs. Organizations were able to avoid unnecessary customer acquisitions costs by improving customer retention and improving brand loyalty. Over three years, total savings from improved customer retention totaled a PV of $1.5 million.
› A 2.5% reduction in customer acquisition and agency costs freed up capital of CX transformation. In-house advertising suppression, retargeting, audience management, and personalization capabilities using Adobe Advertising Cloud, Adobe Target, and Adobe Audience Manager reduced customer acquisition costs while concurrently limiting reliance on outside agencies, saving the composite organization a PV of just under $2.7 million over three years.
› Over $2 million in cost savings from the retirement of legacy technologies. Organizations eliminated poorly integrated and redundant content management systems and analytics tools. For the composite organization, this saved a PV of just over $2 million in technology and people costs over three years.
Costs. The interviewed organizations experienced the following risk- and present-value adjusted costs, which have been included in the financial analysis for the composite organization:
› Adobe software licensing costs. Software licensing and other fees paid to Adobe for use of Adobe Analytics, Adobe Audience Manager, Adobe Experience Manager, Adobe Target, Adobe Campaign, and Adobe Advertising Cloud, which totaled a PV of $2.6 million over the three-year analysis.
› Professional and managed services fees. These are engagement fees paid to professional services firms to assist with the initial proof-of- concept, full implementation, and ongoing management and maintenance of Adobe Experience Cloud solutions, which totaled a PV of $3.6 million over the three-year analysis.
› Internal resource costs. These are internal resource costs to support and manage the initial proof-of-concept and full implementation of Adobe Experience Cloud solutions. In addition, this cost category includes the ongoing analytics, digital marketing, testing, personalization, IT administration, and development resources required to manage and harness the full capabilities of Adobe Experience Cloud. These costs totaled a PV of just under $3.6 million over the three-year analysis.
› Training costs. These are the training costs for new and existing Adobe power and self-service users. Training costs totaled a PV of over $460,000 over the three-year analysis.
Forrester’s interviews with nine existing customers and subsequent financial analysis found that an organization based on these interviewed organizations experienced benefits of $35.1 million over three years versus costs of $10.3 million, adding up to a net present value (NPV) of $24.8 million and an ROI of 242%.
TEI Framework And Methodology
From the information provided in the interviews, Forrester has constructed a Total Economic ImpactTM (TEI) framework for those organizations considering adopting Adobe Experience Cloud.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. The study took a multistep approach to evaluate the impact that Adobe Experience Cloud can have on an organization:
DUE DILIGENCE
Interviewed Adobe stakeholders and Forrester analysts to gather data relative to Adobe Experience Cloud.
CUSTOMER INTERVIEWS
Interviewed nine organizations using Adobe Experience Cloud to obtain data with respect to costs, benefits, and risks.
COMPOSITE ORGANIZATION
Designed a composite organization based on characteristics of the interviewed 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 interviewed organizations.
CASE STUDY
Employed four fundamental elements of TEI in modeling Adobe Experience Cloud’s impact: benefits, costs, flexibility, and risks. Given the increasing sophistication that enterprises have regarding ROI analyses related to IT investments,
