This template has been developed by Conduit.

It is based on many other templates and our

It should be considered “open source” and you are welcome to adapt it based on your spe

Please note that it is a generic cost:benefit analysis template that leans towards custom
and is based on the assumptions on the 'Introduction' worksheet.

While much of the structure will apply regardless of your business and category, there will b

Regretably we aren't able to accept any responsibility or provide any warranty for the templ

However, if you need any help completing the cost:benefit analysis or preparing the data an

Remember that a cost:benefit analysis isn't a business case.

Discover more about business case best practice and how to build a bullet proof business c

In the spirit of openess and developing this as a standard tool for all marketers, please shar

Enjoy.

About Conduit

We optimise marketing performance.

First through Data and then through People, Process and Technology.

Too often marketing is unaccountable and delivers poor customer experiences.

We deliver commercial benefit fast using a Consultancy-as-a-Service model.

other templates and our extensive experience building business cases for clients.

pt it based on your specific requirements and nature of business.

leans towards customer marketing, loyalty marketing or CRM (with a Retail flavour)

nd category, there will be tweaks required.

warranty for the template or your use of it.

or preparing the data and strategy that it supports then please contact us:

bullet proof business case by dow our free business case template.

marketers, please share your feedback, enhancements and tweaks.

d Technology.

customer experiences. We don't think that this is acceptable in a data-enabled world.

as-a-Service model.
 Business Case - Cost:Benefit Analysis Template

The principle behind this template is to demonstrate whether there is incremental financial return on your investment in customer marketing.
There may well be other significant benefits, such as brand loyalty, customer satisfaction and positive customer experiences, but the business case focuses on financial metrics.
The model assumes that there is a customer marketing programme in which a proportion of the customer base participate. This could be because they opt-in to a programme, that only
certain customers are eligible or that specific customer segments are targeted.

The analysis is based on 3 levers: attracting more customers to the loyalty progamme (Customer Volume), getting customers to spend more money (Average Transaction Value) and getting customer to
purchase more often (Frequency)

The model works by entering data into 'Programme Inputs' to construct a cost:benefit analsysis that is based on specific commercial variables to your business and the market in which you operate.
The list of inputs is not exhaustive: you may wish to add some or to leave some of the existing inputs blank if they don't apply to your business or marketing plan.

The cost:benefit analysis uses 4 time periods - current year and 3 years forecast performance based on the assumptions that you make. Additional columns can be added.

In order to construct the business case and make it relevant and accurate, you will require a number of metrics. These include:
Total number of customers % of customers for who you have email addresses Promotional costs
Members of the marketing programme as defined above % of customers for who you have mobile numbers Resourcing requriements
Target new customers (acquisition volume) Estimated marketing costs
Average transaction value (Total and for any customer segments) Retention rates
Average visit frequency per year (total and for any customer segme Estimated volume of customer communications
Gross Margin
Make assumptions, leave blank or remove if you don't have the data to enter these variables.

Cost:benefit analysis - definitions

Metric Definition
Total sales Sales from all customers
Incremental sales The increase in sales that has come from changes in customer behaviour due to the marketing programme vs the behaviour of customers not participating in the marketing programme
Incremental margin Incremental sales x gross margin %
Costs All programme costs in the year (3rd parties, internal and others)
Net margin Incremental margin minus costs
Cost per member (CPM) Marketing programme costs / customers
Customer contribution Incremental margin / customers

Costs as % of sales Marketing costs / total sales

Incremental sales / cost multiple Incremental sales / programme costs

Other metrics can be added to your specific requirements

All data contained in the cost:benefit analysis is dummy data and should not be considered as benchmarks or quotes for marketing services.

Introduction Quant Presky Maves, Confidential

 Business Case - Cost:Benefit Analysis Template

Year

Item Variables Multiplier pa Current year Year 1 Year 2 Year 3

Notes
1a Number of existing customers per annum 500,000 475,000 550,000 625,000

1b Number of new customers 75,000 100,000 100,000 100,000

2 % of customers participating in marketing programme 60% 60% 60% 60%

3a Average transaction value - marketing programme members 1% £ 25.00 £ 25.25 £ 25.50 £ 25.76 Enter a multiplier % to forecast future years

3b Average transaction value - non marketing programme members -2% £ 25.00 £ 24.50 £ 24.01 £ 23.53 Enter a multiplier % to forecast future years

4a Frequency of visit pa - marketing programme members 4.2 4.4 4.6 5.0

4b Frequency of visit pa - non marketing programme members 4.0 4.0 4.1 4.1

5 Gross Margin % -2% 48% 47% 46% 45% Enter a multiplier % to forecast future years

6 Customer retention rate 75% 75% 75% 75% This is the % of customers retained from one year to the next

7a % of customers who can be contacted for marketing 80% 80% 80% 80%

7b Number of customers who can be contacted 400,000 380,000 440,000 500,000

8a Email as % of all communications 73% 73% 73% 73% Your communications mix by channel

8b SMS as % of all communications 25% 25% 25% 25% Your communications mix by channel

8c Snail mail as % of all communications 2% 2% 2% 2% Your communications mix by channel

9a Average number of programme campaigns per year 6 6 6 6 The number of planned marketing campaigns you plan to run each year to most customers (eg. new product, sale activity)

9b Average number of triggers per year per programme member 12 12 12 12 The number of rule-driven and behaviour-led triggers that a customer is likely to receive per year (eg. cross-sell, win-back)

9c Average number of events per year per programme member 2 2 2 2 The number of customised event-based communications that a customer will receive per year (eg. birthday, anniversary)

Marketing costs

10 Cost per Acquisition -£5.00

Average cost to acquire a new customer
11 Content creation -£20,000.00
Total cost of producing content for the marketing programme.
12 Printing offer per item -£0.50

13 Postage costs -£1.00

14 Cost per SMS -£0.03

15 Cost per email -£0.01

16 Welcome pack for new customers eligible for the marketing programme -£2.75
Production and fulfilment of collateral for new customers
17 Margin give-away/promotions -£200,000 -£250,000 -£300,000 -£400,000
Promotional budget for the marketing programme
18 Number of margin give-aways per year 4 5 6 8

19 % Redemption of margin give-aways 35%

% of customers who receive a promotional offer that go on to redeem
20 Internal communications -£100,000 Budget for promoting the marketing programme internally, training etc

21 Marketing technology (customer database, ESP etc) 10% -£100,000 -£110,000 -£121,000 -£133,100 Enter a multiplier % to forecast future years

22 Data analytics, reporting and campaign selections 10% -£75,000 -£82,500 -£90,750 -£99,825 Enter a multiplier % to forecast future years

23a FTE resources required for programme 2.0 2.5 4.0 6.0

23b Average FTE fully-loaded cost -£50,000 -£50,000 -£55,000 -£55,000 Cost per FTE including all employment costs

24 Contingency as % of total costs 10% A contingency rate applied to the total marketing costs

Rate

23 Inflation applied to costs from Current Year 3.0%

Only change these

values

Inputs Quant Presky Maves, Confidential

Business Case - Cost:Benefit Analysis Template

Created by Conduit Data Services Ltd, April 2014

Current year Year 1 Year 2 Year 3

Total Sales £ 60,000,000 £ 62,572,500 £ 74,365,425 £ 90,139,484

% chg 4.3% 18.8% 21.2%

Incrementality of marketing programme

Incremental sales from marketing programme £ 4,225,000 £ 8,968,500 £ 13,479,825 £ 24,065,523
% chg 112.3% 50.3% 78.5%

Incremental margin from marketing programme £ 2,028,000 £ 4,218,782 £ 6,214,091 £ 10,872,133

% chg 108.0% 47.3% 75.0%

Marketing programme costs -£ 1,043,979 -£ 1,111,398 -£ 1,256,818 -£ 1,418,738

% chg 6.5% 13.1% 12.9%

Other marketing costs -£ 375,000 -£ 500,000 -£ 500,000 -£ 500,000

Net margin £ 984,021 £ 3,107,385 £ 4,957,274 £ 9,453,396

% chg 215.8% 59.5% 90.7%

Marketing programme KPIs

Member volume 545,000 535,000 610,000 685,000
Incremental Sales per Member £ 7.75 £ 16.76 £ 22.10 £ 35.13
Incremental Sales as % of Total Sales 7.0% 14.3% 18.1% 26.7%
Cost per Member -£ 1.92 -£ 2.08 -£ 2.06 -£ 2.07
Cost as % of sales 1.7% 1.8% 1.7% 1.6%

Outputs Quant Presky Maves, Confidential