The Total Economic Impact™

Of Amplitude
Cost Savings And Business Benefits
Enabled By Amplitude

AUGUST 2023

A FORRESTER TOTAL ECONOMIC IMPACT™ STUDY COMMISSIONED BY AMPLITUDE

Table Of Contents Consulting Team: Adi Sarosa
Isabel Carey
Executive Summary ................................................. 1
The Amplitude Customer Journey ......................... 6
Key Challenges ...................................................... 6
Investment Objectives ............................................ 7
Composite Organization ......................................... 9
Analysis Of Benefits .............................................. 10
Revenue Impact Benefits ...................................... 10
■ Incremental Profit Growth From User Growth ... 10
■ Incremental Profit Growth From Better
Monetization Of Existing Customer Base ............. 13
■ Revenue Retention From Preventing Customer
Churn .................................................................... 14
Operational Efficiency Benefits ............................ 16
■ Time Savings Related To Product Development
And Management Work........................................ 16
■ Time Savings In Addressing Ad Hoc Requests
From Other Teams ............................................... 18
■ Cost Savings Related To Tech Stack ............... 19
Qualitative Benefits .............................................. 21
Flexibility ............................................................... 21
Analysis Of Costs .................................................. 23
Software License Fees ......................................... 23
Internal Labor Costs Related To Setting Up
Amplitude And User Training ............................... 24
Internal Labor Costs Related To Ongoing
Management Of Amplitude................................... 25
Financial Summary ................................................ 27
Appendix A: Total Economic Impact ................... 28
Appendix B: Supplemental Material .................... 29
Appendix C: Endnotes .......................................... 29

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE

Executive Summary
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 KEY STATISTICS
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.
Return on investment (ROI) Net present value (NPV)
Amplitude commissioned Forrester Consulting to
conduct a Total Economic Impact™ (TEI) study and
217% $5.34M
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 or not they had the right data and information. These
framework to evaluate the potential financial impact limitations led to an inability to understand customer
of Amplitude on their organizations. trends and journeys within their digital products and
experiences, and this created a lack of confidence
To better understand the benefits, costs, and risks
when introducing new features and improvements
associated with this investment, Forrester interviewed
that impacted the business growth and market
four representatives of organizations that use
opportunities they could capture.
Amplitude. For the purposes of this study, Forrester
aggregated the interviewees’ experiences and Interviewees shared that after investing in Amplitude,
combined the results into a composite organization their organizations’ product teams, data scientists,
that is trying to improve its digital capabilities and and engineers were able to realize significant time
operates a consumer-facing application as part of its savings in various analytics and experimentation
overall strategy. activities. Additionally, users from other teams like
marketing or growth could directly access insights
Interviewees noted that prior to using Amplitude, their
from the platform instead of having to put in requests
organizations lacked true visibility into how customers
for data and engineering teams to resolve. As a
were using their products and offerings because they
result, their organizations could make data-driven
did not have a comprehensive digital analytics
decisions, experiment with new features, and take
platform. If the organizations did use any tools for
needed steps to grow business.
analytics, the data and metrics were often unreliable,
which led employees to spend time checking whether

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 1

 EXECUTIVE SUMMARY
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
customers 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.
• 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.
• 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.
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
THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE
time savings for data scientists and engineers are
worth $873,700 to the composite organization.
• 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.
• 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.
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.
2
 EXECUTIVE SUMMARY

Interviewees shared that Amplitude’s self-service ongoing management of Amplitude totals

functionality promotes data democratization so $164,100.
that anyone at the company can execute
The representative interviews and financial analysis
analytics. It is no longer a process that can only
found that a composite organization experiences
data scientists, analysts, or engineers can
benefits of $7.79 million over three years versus
handle. In turn, this elevates the work that more
costs of $2.46 million, adding up to a net present
technical workers can do related to analytics and
value (NPV) of $5.34 million and an ROI of 217%.
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.

• 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.

• 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

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 3

 EXECUTIVE SUMMARY

ROI BENEFITS PV NPV PAYBACK

217% $7.79M $5.34M <6
months
Benefits (Three-Year)

Incremental profit growth from user growth $1.8M

Incremental profit growth from better

$2.1M
Revenue benefits
monetization of existing customer base

Revenue retention from preventing

$1.3M
customer churn

z
Time savings related to product
$873.7K
development and management work

Operational efficiency
Time savings in addressing ad hoc
$151.4K
requests from other teams
& Cost savings

Cost savings related to tech stack $1.6M

“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
THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 4
 EXECUTIVE SUMMARY
TEI FRAMEWORK AND METHODOLOGY
From the information provided in the interviews,
Forrester constructed a Total Economic Impact™
framework for those organizations considering an
investment in 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.
DISCLOSURES
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.
THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE
DUE DILIGENCE
Interviewed Amplitude stakeholders and
Forrester analysts to gather data relative to
Amplitude.
INTERVIEWS
Interviewed four representatives at
organizations using Amplitude to obtain data
with respect to costs, benefits, and risks.
COMPOSITE ORGANIZATION
Designed a composite organization based on
characteristics of the interviewees’
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 interviewees.
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.
5
The Amplitude Customer Journey
Drivers leading to the Amplitude investment

Interviews
Estimated
Role Industry Region Annual revenue number of active
users
Chief architect Social media North America Less than $10M Less than 10M

Chief product officer Entertainment Global $5B to $10B 10M to 50M

Director of product
Healthcare North America $5B to $10B Less than 10M
management

Software engineer Consumer application Global $100M to $500M 10M to 50M

truth for their enterprise data on customer journey

KEY CHALLENGES
and product usage. This led to a complete lack of
Interviewees noted that improving their organization’s
ability to know how their products or applications
digital analytics capabilities was a key priority.
were being used as well as an inability to do
Without it, the company had limited to no visibility into
comprehensive analytics to generate key insights
how people were using its products, purchasing its
or trends to determine the best courses of action.
offerings, and interacting with the organization.
The director of product management in
Continuing with this status quo would create a
healthcare said: “We were going to start the
tremendous amount of business risk. The director of
process of building an amazing patient portal
product management at a healthcare company told
experience, which was going to be a massive
Forrester: “We had an industry study showing the
investment. Prior to [using] Amplitude, we didn’t
majority of consumers [were] dissatisfied with their
have the analytics, so were essentially flying
digital [experiences]. Half of them said they would
blind.”
switch providers to get that better experience.”
• Irrelevant and inaccurate data and metrics.
Prior to investing in Amplitude, interviewees’
Some interviewees from organizations that used
organizations had varying degrees of what their
a different tool or vendor said they were
analytics or experimentation environments looked
dissatisfied with the types of data, metrics, and
like. For some, investing in Amplitude was their first
venture into the analytics and experimentation space.
Others already used a different tool to do their
product analytics and experimentation work while
some worked with different vendors and others tried
“We need to understand why
building their own homegrown tools. people are paying for the
platform. Which features are
The interviewees noted how their organizations
struggled with common challenges, including:
engaging our users? What are
they looking for?”
• Lack of analytics and visibility. Interviewees
said that prior to using Amplitude, their Chief product officer, entertainment
organizations did not have a single source of

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 6

 THE AMPLITUDE CUSTOMER JOURNEY
insights generated. The chief product officer at an
entertainment organization shared: “There was a
tool implemented, but nobody trusted [it]. The
[measurement] features were not relevant. So,
there was nothing done [with] the metrics and
analytics generated from the tool.”
• Operational inefficiency. Some interviewees
said their organization tried working out a
process to analyze its product usage on its own
but that they quickly found the effort to be highly
inefficient. The chief product officer at an
entertainment company shared: “People were
randomly tagging applications without a coherent
strategy. I remember people trying for weeks to
generate some KPI on graph, but [they] found
they needed to double check and triple check
everything.”
“The number one thing we want
to get a handle on is how people
are using our product. The
event-based analytics [are] really
at the core of that. We want to be
data-oriented in our
understanding of how people
use our product.”
Chief architect, social media
INVESTMENT OBJECTIVES
The interviewees’ organizations searched for a
solution that could:
• Produce quality and in-depth analysis.
Interviewees said their organizations were
looking for a solution that could produce a higher-
level user behavior analysis in terms of quality
THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE
and depth. The chief architect at a social media
company said: “Amplitude was able to give us
more sophisticated, automated analysis [about
user behavior]. So, [Amplitude was] not just
taking a set of events, counting them, or splitting
them on some dimensions. … [It was] also able
to have some predictive insights about what
might be most relevant to our business.”
The same chief architect added: “Amplitude is
our primary source of both user segmentation
and event data. We run campaigns that are
targeted at a segment of users, and triggered by
events that happen in the system. We use
Amplitude’s Customer Data Platform (CDP) to
synchronize cohorts for targeting segments and
to stream events for campaign triggering. We can
then get events reported back to Amplitude for
the users who receive campaigns.”
• Generate insights with quick time to value. In
addition to speaking about the quality of insights,
interviewees also highlighted Amplitude’s ability
to generate insights at a faster pace than other
tools they compared it against. The same chief
architect shared: “There were other vendors that
had similar products, but [they] would have the
data available in 6 to 12 hours from the time we
did the data ingestion to the time we had the
analysis. With Amplitude, it was basically instant.”
• Be accessible to different people, roles, and
business units. Interviewees shared that their
organizations were also looking for a tool with a
self-service element to allow different people
across the business to access the tool and
extract the information or insights they need. A
software engineer from a consumer application
company noted: “The name of the game right
now is self-serve. If we want to keep up with
competitors, we need to keep up in terms of how
fast we can gain insights. To do that, we cannot
be waiting on data engineers and analysts to be
performing ad hoc analysis.”
7
 THE AMPLITUDE CUSTOMER JOURNEY

All in all, interviewees noted their organizations were

looking for a product that could improve the overall
digital experience of their consumers and users in
order to drive better business outcomes.

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 8

 THE AMPLITUDE CUSTOMER JOURNEY

COMPOSITE ORGANIZATION
Based on the interviews, Forrester constructed a TEI
framework, a composite company, and an ROI
analysis that illustrates the areas financially affected. Key Assumptions
The composite organization is representative of the
• 10 million monthly
four interviewees, and it is used to present the
aggregate financial analysis in the next section. The
active users
composite organization has the following • 50 employees involved
characteristics:
in product analytics and
Description of composite. The composite experimentation
organization is a retail organization that’s trying to
improve its digital presence from its legacy brick and • Moves from a variety of
mortar environment. It has 10 million monthly active disparate solutions to
users (MAUs) in the consumer application on which it Amplitude
plans to implement Amplitude. The consumer
application drives revenue to the composite
organization in two ways: 1) paying users pay a
recurring subscription fee, and 2) the organization
receives indirect revenue from third-party advertising
based on the application’s total paying and
nonpaying users.

Additionally, the composite has 50 employees (e.g.,

product managers, marketing managers, data
engineers, data scientists, and product analysts)
involved in product management.

Prior to using Amplitude, the organization used a

variety of solutions to understand digital customer
experience. These included business intelligence (BI)
tools and a customer data platform (CDP). The
organization wants a comprehensive digital analytics
platform to replace these disparate tools.

Deployment characteristics. The composite

organization plans to use Amplitude for its consumer
application use case. It allocates 10 people to be
involved in the six-month setup and deployment
phase. After the tool is set up, the composite
conducts ongoing training of 20 employees per year
to gradually grow the number of people familiar with
and comfortable enough to use Amplitude.

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 9

Analysis Of Benefits
Quantified benefit data as applied to the composite

Total Benefits
Present
Ref. Benefit Year 1 Year 2 Year 3 Total
Value
Incremental profit growth from
Atr $510,000 $765,000 $918,000 $2,193,000 $1,785,575
user growth
Incremental profit growth from
Btr better monetization of existing $544,000 $856,800 $1,224,000 $2,624,800 $2,122,254
customer base
Revenue retention from
Ctr $461,693 $525,178 $605,975 $1,592,846 $1,309,030
preventing customer churn
Time savings related to
Dtr product development and $144,500 $307,063 $650,250 $1,101,813 $873,677
management work
Time savings in addressing
Etr ad hoc requests from other $47,520 $61,776 $76,032 $185,328 $151,379
teams
Cost savings related to tech
Ftr $369,000 $759,870 $782,396 $1,911,266 $1,551,272
stack

Total benefits (risk-adjusted) $2,076,713 $3,275,686 $4,256,653 $9,609,052 $7,793,187

Revenue Impact Benefits

■ INCREMENTAL PROFIT GROWTH FROM USER to see things in Amplitude [as they happen]
GROWTH makes a huge difference.”
Evidence and data. Interviewees noted that using • The director of product management at a
Amplitude gave their teams and organizations the healthcare organization shared: “With Amplitude,
ability to see how their customers were using their we looked at the amount of people who weren’t
offerings and which features or product
characteristics resonated with users. As a result, they
were able to experiment and introduce new
capabilities that could attract new people to use their
“Amplitude is our exclusive tool
offerings.
we use to measure our progress,
• The chief architect at a social media company
test changes experimentally, and
noted: “The more impactful story is the free user
understand our users’ behavior
growth cycle. We are an application where the
word of one person brings another to the
in order to design the next round
platform. That’s how we acquire users. This can of improvement.”
get very complicated very fast with a lot of
Chief architect, social media
multidimensional impacts. Having the level of
control that we have over our data and being able

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 10

 ANALYSIS OF BENEFITS

paying their bills [and found] that we had made
bill pay a separate login. After making it easier to
pay bills on our app, we [saw] 90% of new users
coming through the application.
Modeling and assumptions. For the purposes of
the composite organization, Forrester assumes:
• The organization has 10 million MAUs.
Risks. The exact benefit realized by an organization
can vary, depending on factors such as:
• The size of the organization and its number of
customers or users.
• The organization’s industry, market, and
competitive landscape, which can impact the
ease of acquiring new customers.

• With the insights generated from analytics and
experimentation introduced by Amplitude, the
organization grows its user base by 5% in Year 1,
by 7.5% in Year 2, and by 9% in Year 3.
• The average revenue per user (ARPU) is $15 per
year.3
• The organization’s industry and geographic
location, which can impact the expected revenue
per customer/user and net margin.
Results. To account for these risks, Forrester
adjusted this benefit downward by 15%, yielding a
three-year, risk-adjusted total PV of $1.8 million.

• The net margin of the composite organization is

8%.

Incremental Profit Growth From User Growth

Ref. Metric Source Year 1 Year 2 Year 3

A1 MAUs Composite 10,000,000 10,000,000 10,000,000

Percentage of user growth per year with

A2 Interviews 5.0% 7.5% 9.0%
Amplitude
Subtotal: Total new users acquired with
A3 A1*A2 500,000 750,000 900,000
Amplitude

A4 ARPU Assumption $15 $15 $15

A5 Net margin TEI standard 8% 8% 8%

Incremental profit growth from user

At A3*A4*A5 $600,000 $900,000 $1,080,000
growth

Risk adjustment ↓15%

Incremental profit growth from user

Atr $510,000 $765,000 $918,000
growth (risk-adjusted)

Three-year total: $2,193,000 Three-year present value: $1,785,575

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 11

 ANALYSIS OF BENEFITS

▬ Forrester Perspective: Better

Digital CX Goes Hand-In-Hand
With Faster Revenue Growth
Great customer experiences correlate with
growth, particularly in industries in which
customers have a choice. Focusing on product
and service adoption through digital
communications, delivering great digital
customer service, and digitizing customer
onboarding all help drive profitable growth.

Digitizing these service interactions can bring

some of the most well-defined returns on
investment because it saves money, and that’s
easier to measure. At the same time, these
efforts can boost customer advocacy scores that
drive future purchase intent.

Source: “The Business Impact Of Digital Experience

Technology Is Profitable Growth,” Forrester Research, Inc.,
March 1, 2021.

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 ANALYSIS OF BENEFITS

■ INCREMENTAL PROFIT GROWTH FROM • Prior to using Amplitude, 2% of this user base
BETTER MONETIZATION OF EXISTING converted into paying users per year.
CUSTOMER BASE
• With Amplitude, this conversion rate improves by
Evidence and data. Similar to the user growth 20% in Year 1, by 30% in Year 2, and by 40% in
benefit, interviewees also said their organizations Year 3.
used the analytics and experimentation from
Amplitude to explore ways to provide more value to • The composite’s average revenue per paying
their existing customer and user bases. As a result, user (ARPPU) is $200 per year.4
they were able to create better monetization • The composite’s net margin is 8%.
strategies. For digital application users, this could be
in the form of shifting free to paying users or
optimizing path to purchase. For more traditional
businesses, this could be about upsell and cross-sell “Being able to do advanced
levers with behavioral insights to maximize ARPUs
things like slicing down
and average order values. All of the resulting insights
segments, adjusting data sets
generated through Amplitude allowed the
organizations to better understand their existing after the fact, [and] using
customer bases. underlying analytics data rather
than an entirely different data set
• The director of product management at a
healthcare company said: “With Amplitude, we
[is useful]. [With Amplitude,] we
were able to look at specific user segments, have so much volume [of data to
[conduct] an A/B test, and find that with the new analyze].”
feature we introduced, our new version
performed 39% better than our old version.”
Director of product management,
healthcare
• The software engineer at a consumer application
added: “A lot of focus currently is on increasing
paid users via subscription or microtransactions.
The experiments [that we do on Amplitude] tell us Risks. The exact benefit realized by an organization
in real time what the expectations would be if we can vary, depending on factors such as:
launched this product or that feature to the
• The size of the organization and its number of
broader audience.”
customers or users.
• The chief product officer at an entertainment
• The organization’s industry, market, and
company noted: “With Amplitude, we were able
competitive landscape, which can impact the
to triple our conversion rate of people becoming
decision-making process of target customers to
paid consumers. By being able to focus on how
purchase additional offerings.
people discover our content, we have been able
to improve engagement and conversion.” • The organization’s industry and geographic
location, which can impact the expected revenue
Modeling and assumptions. For the purpose of the
per customer/user and net margin.
composite organization, Forrester assumes:

• The organization has 10 million MAUs.

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 13

 ANALYSIS OF BENEFITS

Results. To account for these risks, Forrester

adjusted this benefit downward by 15%, yielding a
three-year, risk-adjusted total PV of $2,100,000.

Incremental Profit Growth From Better Monetization Of Existing Customer Base

Ref. Metric Source Year 1 Year 2 Year 3

B1 MAU at start of the year A1+A3PY 10,000,000 10,500,000 11,250,000

B2 Conversion rate with legacy solution Composite 2% 2% 2%

Percentage improvement in conversion

B3 Interviews 20% 30% 40%
rate of free to paying users
Subtotal: Newly acquired paying users
B4 B1*B2*B3 40,000 63,000 90,000
per year

B5 ARPPU Assumption $200 $200 $200

B6 Net margin TEI standard 8% 8% 8%

Incremental profit growth from better

Bt B4*B5*B6 $640,000 $1,008,000 $1,440,000
monetization of existing customer base

Risk adjustment ↓15%

Incremental profit growth from better

Btr monetization of existing customer base $544,000 $856,800 $1,224,000
(risk-adjusted)

Three-year total: $2,624,800 Three-year present value: $2,122,254

■ REVENUE RETENTION FROM PREVENTING
CUSTOMER CHURN
Evidence and data. The third area in which
interviewees noted their organizations are conducting
insights and experimentation with Amplitude is to
understand how best to keep customers and users
from leaving (e.g., improving retention rate, reducing
churn). Interviewees said using features on the
Amplitude platform such as behavioral cohorts to
group users who share similar traits or characteristics
gave them the ability to better engage with their
users.
through a few iterations of these features. The
few first attempts didn’t improve the overall usage
metrics as we hoped. Running the experiment
through Amplitude allowed us to dive deeply into
the behavior of the two cohorts to understand
why our first attempt didn’t work.”
• The chief product officer at an entertainment
company said: “In terms of engagement, we have
improved by 15% [due to Amplitude]. With
Amplitude, we can focus on how people discover
content, improve features, and track user-
renewal rates.”

• The chief architect at a social media company
noted: “We’ve run a number of tests in the
retention or churn-prevention category. We have
been adding features to allow people to connect
with each other more easily. We had to go
• The software engineer at a consumer application
organization added: “[With Amplitude,] we can
see where exactly users are dropping off in their
journey and experience of using our app.”

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 14

 ANALYSIS OF BENEFITS

Modeling and assumptions. For the purpose of the • The size of the organization and its number of
composite organization, Forrester assumes: customers or users.

• The composite’s number of paying users per year • The organization’s industry, market, and
is based on its conversion rate with Amplitude. competitive landscape, which can impact the
benchmark customer churn rate and the
• Prior to using Amplitude, 94.3% of the paying
percentage improvement Amplitude can
users dropped off within the first 30 days of
introduce.
converting from being a free user to becoming a
paying user.5 • The organization’s industry and geographic
location, which can also impact the expected
• With Amplitude, this churn rate reduces by 15%
revenue per customer/user and net margin.
each year.
Results. To account for these risks, Forrester
• The composite’s average revenue per paying
adjusted this benefit downward by 15%, yielding a
user (ARPPU) is $200 per year.6
three-year, risk-adjusted total PV of $1.3 million.
• The composite’s net margin is 8%.

Risks. The exact benefit realized by an organization

can vary, depending on factors such as:

Revenue Retention From Preventing Customer Churn

Ref. Metric Source Year 1 Year 2 Year 3

C1 Paying users B1*B2+B4 240,000 273,000 315,000

C2 30-day churn rate TEI standard 94.3% 94.3% 94.3%

C3 Reduction in churn rate with Amplitude Interviews 15% 15% 15%

Subtotal: Newly acquired paying users

C4 C1*C2*C3 33,948 38,616 44,557
retained due to Amplitude

C5 ARPPU Assumption $200 $200 $200

C6 Net margin TEI standard 8% 8% 8%

Revenue retention from preventing

Ct C4*C5*C6 $543,168 $617,856 $712,912
customer churn

Risk adjustment ↓15%

Revenue retention from preventing

Ctr $461,693 $525,178 $605,975
customer churn (risk-adjusted)

Three-year total: $1,592,846 Three-year present value: $1,309,030

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 15

 ANALYSIS OF BENEFITS
Operational Efficiency Benefits
■ TIME SAVINGS RELATED TO PRODUCT
DEVELOPMENT AND MANAGEMENT WORK
Evidence and data. As noted previously,
interviewees shared that prior to using Amplitude,
their organizations’ use of analytics and
experimentation of product usage or new features
was highly inefficient. Similarly, trying to target
specific user groups to help build specific marketing
campaigns was too time-consuming. This became an
issue because it limited what the organizations could
do to improve their offerings and grow their business.
According to Forrester’s Data and Analytics Survey,
2022, 80% of data and analytics decision-makers
said their organization used or planned to use A/B
and multivariate testing in the following 12 months.7
To identify and deliver the next best experience on a
consistent basis, brands need to run multivariate
tests on a massive scale.
Interviewees said that by moving to Amplitude, their
organizations could quickly set up this work through
the platform, natively integrate with analytics, and
insights are generated instantaneously. Having a
consolidated platform for analytics, customer data
management, data activation, and experimentation
led to time savings for data scientists and engineers.
As a result, interviewees noted that data engineers
and scientists became much more productive in their
work to understand ways to improve products and
offerings.
Time savings in
experimentation and
analytics work per year
80%-90%
THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE
• The chief architect at a social media company
said: “Thinking about productivity in experiments
per year and how rapidly we can build, deploy,
read, [and] iterate on that cycle, ideally, we would
complete this cycle every week. That would be
12 iterations per quarter. Without Amplitude, we
[could] only do one or two iterations per quarter.”
• The chief product officer at an entertainment firm
noted: “My product analytics team can now do
things that if they had to do it in the previous
environment, it would have taken a lot of time.
For our data scientists and engineers who know
how to use the tool, [Amplitude] saves a lot of
time.”
• The software engineer at a consumer application
company added: “[Previously,] our data scientists
were doing statistical significance calculations
manually. The ability of Amplitude to almost real-
time calculate that and … recommend actions
[out of the box] based on those outputs is
tremendously helpful. At the moment, we only do
one experiment a month, but we expect to be
able to do 10 to 20 experiments a month by end
of year.”
Modeling and assumptions. For the purpose of the
composite organization, Forrester assumes:
• There are 50 employees involved in product
management, analytics, and experimentation
work.
•
Taking into account user training and change
management that needs to be done to get these
employees to fully convert to Amplitude, the
percentage of work impacted by this tool is 5% in
Year 1, 10% in Year 2, and 20% in Year 3.
• By using Amplitude, the composite’s employees
realize 80% time savings in Year 1, and these
savings gradually increase to 85% in Year 2 and
to 90% in Year 3.
16
 ANALYSIS OF BENEFITS

• Taking into account the different roles, seniority, • The organization’s change management and
and level of involvement in this work, the average user training.
fully burdened annual salary of an employee
• The organization’s industry and geographic
involved is $170,000.8
location, which can impact the fully burdened
• The composite’s productivity recapture from the annual salaries of employees.
realized time savings is 50%. This is the
• The skills and capabilities of the organization’s
percentage of time they can dedicate to
employees, which can impact the roles and
additional effort, work, and activities as a result of
seniority of people who need to be involved in
the time savings.
this work.
Risks. The exact benefit realized by an organization
Results. To account for these risks, Forrester
can vary, depending on factors such as:
adjusted this benefit downward by 15%, yielding a
• The adoption rate of the organization’s product three-year, risk-adjusted total PV of $873,700
management, analytics, and experimentation
teams and how quickly they are willing to shift to
using Amplitude.

Time Savings Related To Product Development And Management Work

Ref. Metric Source Year 1 Year 2 Year 3
Employees involved in product
D1 Composite 50 50 50
management work

D2 Percentage of work impacted Interviews 5% 10% 20%

D3 Percentage of time saved with Amplitude Interviews 80% 85% 90%

Fully burdened annual salary of an

D4 employee involved in product TEI standard $170,000 $170,000 $170,000
management work

D5 Productivity recapture TEI standard 50% 50% 50%

Time savings related to product

Dt D1*D2*D3*D5 $170,000 $361,250 $765,000
development and management work

Risk adjustment ↓15%

Time savings related to product

Dtr development and management work $144,500 $307,063 $650,250
(risk-adjusted)

Three-year total: $1,101,813 Three-year present value: $873,677

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 17

 ANALYSIS OF BENEFITS

■ TIME SAVINGS IN ADDRESSING AD HOC
REQUESTS FROM OTHER TEAMS
Evidence and data. Interviewees noted that the self-
service aspect of Amplitude enabled team members
from different units to access the platform and gather
the information or insights needed. Prior to using
Amplitude, these team members would need to ask
for this information in the form of ad hoc requests to
data scientists, engineers, product managers, and
leaders. The exact requests could vary in type and
complexity, but they almost always took time away
from the person’s core work and responsibility. But
interviewees said that with Amplitude, a team
member making the request can access that data on
the platform themselves. This reduces the backlog of
ad hoc requests that is created and, as a result, data
scientists and engineers can recapture that time and
focus on more strategic and complex activities.
• The composite’s data scientists and engineers
receive an average of 600 ad hoc requests from
other business units per year.
• The average amount of time needed to complete
each request is 2 hours.
• With Amplitude, the composite realizes time
savings of 50% in Year 1, 65% in Year 2, and
80% in Year 3.
• The fully burdened hourly salaries of data
scientists and engineers is $88.
Risks. The exact benefit realized by an organization
can vary, depending on factors such as:
• The type and complexity of the request, which
impacts how long it will take to address each
request and the percentage that can be
addressed with self-service.

• The chief architect at a social media company • The workload the organization’s data scientists
noted: “Doing ad hoc analysis based on what and engineers currently handle at the time of
product managers or marketing people were request and the amount of time they can take to
asking with Amplitude is faster. Thinking about address the ad hoc request.
the time we spend addressing those requests, we
• The criticality of the request to the overall
are now able to do that 50% faster. This is
success of the business.
because it’s easier to do funnel analysis and
segmentation with Amplitude.” Results. To account for these risks, Forrester
adjusted this benefit downward by 10%, yielding a
• The software engineer at a consumer application
three-year, risk-adjusted total PV of $151,400.
added: “For behavioral analytics, a lot of that
analysis had to be done by data analysts and
engineers. We would create ad hoc reports
based on what product managers or marketing
[teams] were asking. With Amplitude, we can
make 70% to 80% of those requests self-serve,
which would free up data analysts and data
engineers to do things that are more interesting,
more value-add, and just overall free up time for
those teams to move faster.”

Modeling and assumptions. For the purpose of the

composite organization, Forrester assumes:

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 18

 ANALYSIS OF BENEFITS

Time Savings In Addressing Ad Hoc Requests From Other Teams

Ref. Metric Source Year 1 Year 2 Year 3
Average number of ad hoc requests to
E1 Composite 600 600 600
data/engineering/analytics team
Average time to complete each request
E2 Interviews 2 2 2
(hours)
Percentage of time savings with
E3 Interviews 50% 65% 80%
Amplitude
Fully burdened hourly salary of an
E4 TEI standard $88 $88 $88
involved employee
Time savings in addressing ad hoc
Et E1*E2*E3*E4 $52,800 $68,640 $84,480
requests from other teams

Risk adjustment ↓10%

Time savings in addressing ad hoc

Etr $47,520 $61,776 $76,032
requests from other teams (risk-adjusted)

Three-year total: $185,328 Three-year present value: $151,379

■ COST SAVINGS RELATED TO TECH STACK Finally, some interviewees also noted their
organization saved in the form of labor it would have
Evidence and data. Interviewees noted that by
had to hire if it didn’t use Amplitude.
moving to Amplitude, their organizations realized cost
savings to their tech stacks. The chief architect at the social media company
shared, “If I didn’t have Amplitude, I would imagine I
Many interviewees said cost savings are simply the
would have needed 10% more people on my data
result of being able to discontinue their company’s
and engineering team to do analytics and
spend on the license fee for its legacy platform.
experimentation.”
Others said the cost savings came in form of vendor
consolidation and that Amplitude’s features allow Modeling and assumptions. For the purpose of the
their organization to no longer need to work with composite organization, Forrester assumes:
multiple vendors because Amplitude has multiple
• The composite retires its legacy solution and
capabilities.
saves on the effort required to maintain the
• The chief product officer at an entertainment solution.
company said, “Without Amplitude, we probably
• The annual cost of the composite’s legacy tech
would have to spend another 20% to 25% on our
stack totals $810,000 in Year 1, and this
analysis tooling budget.”
increases by 3% each year. This total is
• The director of product management at a calculated from the spend for the legacy analytics
healthcare company noted, “If we used a products, which cost the same as the annual cost
separate vendor for experimentation, that would of Amplitude.
[cost] 50% to 100% more on top of what we pay
for Amplitude.”

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 19

 ANALYSIS OF BENEFITS

• The composite saves an additional 20% by
retiring other tools and avoiding spend that can
be avoided with Amplitude.
• The composite tasks one product analyst with
dedicating 10% of their time to maintaining its
legacy solutions.
• The fully burdened annual salary of the product
analyst is $100,000.
Risks. The exact benefit realized by an organization
can vary, depending on factors such as:
• The complexity of the organization’s legacy
environment and the functionality that can be
replaced with Amplitude.
• The organization’s industry and geographic
location, which can impact the fully burdened
annual salaries of employees.

• By moving to Amplitude, the organization Results. To account for these risks, Forrester
reduces 50% of its annual legacy cost in Year 1 adjusted this benefit downward by 10%, yielding a
and 100% of the annual legacy cost in years 2 three-year, risk-adjusted total PV of $1.6 million.
and 3.

Cost Savings Related To Tech Stack

Ref. Metric Source Year 1 Year 2 Year 3

F1 Cost of legacy tech stack Assumption $810,000 $834,300 $859,329

Employees involved in maintaining

F2 Interviews 1 1 1
legacy solution
Fully burdened annual salary of an
F3 employee involved in maintaining legacy TEI standard $100,000 $100,000 $100,000
solution
Percentage of time dedicated to
F4 Interviews 10% 10% 10%
maintaining legacy tech stack
Percentage reduction in tech stack
F5 Interviews 50% 100% 100%
annual cost
(F1+(F2*F3*F4))
Ft Cost savings related to tech stack $410,000 $844,300 $869,329
*F5

Risk adjustment ↓10%

Cost savings related to tech stack (risk-

Ftr $369,000 $759,870 $782,396
adjusted)

Three-year total: $1,911,266 Three-year present value: $1,551,272

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 20

 ANALYSIS OF BENEFITS
QUALITATIVE BENEFITS
Interviewees mentioned the following additional
benefits that their organizations experienced but were
not able to quantify:
• Creating an insights-driven business.
Forrester data indicates that the most advanced
IDBs consistently outpace their competition and
deliver faster revenue growth.9 Interviewees
shared that using Amplitude created a cultural
shift in how their organizations operate. They
said that its features and capabilities make
Amplitude the hub on which their organization
acquires most if not all data it needs. This
includes all types of customer data they need to
be informed about their customers, and it takes
this into account before making any decisions
related to how best to move the company
forward. The director of product management at
a healthcare company said: “[Using] Amplitude is
not about reducing or avoiding tech stack spend.
It’s more about having access to quantitative data
in decision-making to ensure our team is working
on the right things and measuring progress.”
• Increased data literacy due to the
democratization of analytics work.
Interviewees also noted that the self-service
feature of Amplitude is a tremendous benefit.
Beyond just the time savings for data scientists
and engineers who no longer need to address ad
hoc requests from colleagues, the self-service
ability means non-technical employees improve
their skills and capabilities while working with
data, and this has the potential to speed up
decision-making, monetizing product
enhancements, and doing what’s right for the
business. The same director of product
management in healthcare noted, “We have
democratized the analytics where all my product
managers, analysts, engineers, and designers
are using Amplitude [to do their work].”
THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE
• Better knowledge management. Interviewees
shared that by having Amplitude as their
organization’s main platform for storing data,
information, and knowledge regarding their
customers, they have a one-stop shop to explore
insights into customer journeys, trends, and other
analytics work. The engineer at a social media
company told Forrester: “With this visibility, we
have the ability to have detailed control and
detailed ability to follow threads all the way
through. We can have multiple eyes on these
problems we are trying to understand.”
“We use [Amplitude] to
understand how people use our
product. We want to know what
they are doing, what they are
watching, [and] where they go
from page to page. Anytime
someone needs to understand
any KPIs, they go to Amplitude.”
Chief product officer, entertainment
FLEXIBILITY
The value of flexibility is unique to each customer.
There are multiple scenarios in which a customer
might implement Amplitude and later realize
additional uses and business opportunities, including:
• Development in data and analytics maturity.
In the long run, the combination and interplay
between the different benefits Amplitude allows
organizations to mature related to their data and
analytics capabilities. The time savings, cost
savings, and virtuous cycle between product
teams, data teams, and others in improving their
21
 ANALYSIS OF BENEFITS

knowledge results in the organization as a whole

being able to tackle more complex activities that
can further benefit the company.
▬ Forrester Perspective: Improve
The software engineer at a consumer application
company said: “With time savings realized from
Amplitude, we hope our data engineering team
can focus more on machine learning capabilities,
both real-time and [asynchronous]. We want to
give data engineering and data science teams
the ability to work together to build a lot more ML
models that can give recommendations on how
to better the user experience and increase
engagement.”
• Impact on speed and agility of business.
Additionally, the time savings the implementing
organization can realize directly impacts the
speed at which its business can operate, adjust,
and adapt to certain situations. The operational
efficiencies described earlier directly contribute to
how fast and frequently an organization can
realize the revenue impact benefits, and this
creates a virtuous cycle of productivity
improvements and business growth.
Customer Insights With
Customer Analytics
Technologies
Companies that invest in customer analytics
technologies:
• Improve the customer experience by
identifying CX pain points.
• Drive loyalty and retention with
individualized customer understanding.
Churn analysis not only identifies
customers at risk of attrition, but it also
spotlights opportunities for better
customer engagement.
• Increase customer lifetime value by
optimizing customer interactions.
Source: “Now Tech: Customer Analytics Technologies, Q1
2022,” Forrester Research, Inc., January 18, 2022.

Flexibility would also be quantified when evaluated as

part of a specific project (described in more detail in
Appendix A).

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 22

Analysis Of Costs
Quantified cost data as applied to the composite

Total Costs
Present
Ref. Cost Initial Year 1 Year 2 Year 3 Total
Value
Gtr Software license fees $0 $708,750 $730,013 $751,913 $2,190,675 $1,812,558

Internal labor costs

related to setting up
Htr $471,108 $3,608 $3,608 $3,608 $481,932 $480,081
Amplitude and user
training
Internal labor costs
related to ongoing
Itr $0 $66,000 $66,000 $66,000 $198,000 $164,132
management of
Amplitude
Total costs (risk-
$471,108 $778,358 $799,621 $821,521 $2,870,607 $2,456,771
adjusted)

SOFTWARE LICENSE FEES

Evidence and data. Interviewees’ organizations pay Risks. The exact cost and time invested by an
annual license fees based on their specific situations. organization can vary, depending on factors such as:

Modeling and assumptions. For the purpose of the • The amount of data and information to be
composite organization, Forrester assumes: analyzed.

• The composite pays Amplitude $675,000 for its
licensing fee in Year 1, and this increases by 3%
each year.
• Pricing may vary. Contact Amplitude for
additional details.
• The exact features the organization implements
with the Amplitude platform.
Results. To account for these risks, Forrester
adjusted this cost upward by 5%, yielding a three-
year, risk-adjusted total PV of $1.8 million.

Software License Fees

Ref. Metric Source Initial Year 1 Year 2 Year 3

G1 License fee Composite $0 $675,000 $695,250 $716,108

Gt Software license fees G1 $0 $675,000 $695,250 $716,108

Risk adjustment ↑5%

Gtr Software license fees (risk-adjusted) $0 $708,750 $730,013 $751,913

Three-year total: $2,190,675 Three-year present value: $1,812,558

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 23

 ANALYSIS OF COSTS

INTERNAL LABOR COSTS RELATED TO
SETTING UP AMPLITUDE AND USER TRAINING
Evidence and data. Interviewees noted that setting
up Amplitude at their organizations required
involvement from different team members. The
process typically started by evaluating the needs and
use cases of Amplitude at their organizations. Once
that was decided, the companies needed to migrate
data, set up governance processes, and start training
users.
• The engineer at a social media company shared,
“Most of the initial time was spent for evaluation.
There were two to three of us at the time [who
were] involved in the process.”
• Once the platform is set up, the organization
trains 20 employees with a more streamlined, 2-
hour user-training session each year.
Risks. The exact cost and time invested by an
organization can vary, depending on factors such as:
• The complexity of the organization’s product
analytics and experimentation environment.
• The expectations about which capabilities and
functionalities need to be set up immediately as
opposed to progressively over time.
• The organization’s industry and geography,
which can impact the assumed fully burdened
annual salaries of employees.

• The chief product officer at an entertainment firm
said: “POC [proof of concept] was three months.
Once we proved the value, it took another three
months to deploy the solution to other parts of the
organization.”
Results. To account for these risks, Forrester
adjusted this cost upward by 10%, yielding a three-
year, risk-adjusted total PV of $480,000.

• The engineer at a consumer application added,

“We had data analysts, data scientists,
engineers, and a few managers … involved in the
setup.”

Modeling and assumptions. For the purpose of the

composite organization, Forrester assumes:

• Setting up Amplitude takes the composite six

months, and this includes POC work to assess if
Amplitude is the right fit and full deployment of
the platform.

• 10 employees dedicate 50% of their time to setup

and deployment.

• The fully burdened annual salary of an involved

employee is $170,000 (or $82 per hour).

• The 10 employees involved in setup are then

involved in 4 hours of user training.

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 24

 ANALYSIS OF COSTS

Internal Labor Costs Related To Setting Up Amplitude And User Training

Ref. Metric Source Initial Year 1 Year 2 Year 3

H1 Time to set up (years) Composite 0.5

H2 Employees involved Interviews 10

Fully burdened annual salary of an

H3 TEI standard $170,000
employee involved

H4 Percentage of time dedicated Interviews 50%

Subtotal: Total cost of time investment

H5 H1*H2*H3*H4 $425,000
related to setting up Amplitude

H6 Time for user training (hours) Interviews 4 2 2 2

H7 Users trained Interviews 10 20 20 20

H8 Fully burdened hourly salary of a user TEI standard $82 $82 $82 $82

Subtotal: Total costs investment related

H9 H6*H7*H8 $3,280 $3,280 $3,280 $3,280
to user training
Internal labor costs related to setting up
Ht H5+H9 $428,280 $3,280 $3,280 $3,280
Amplitude and user training

Risk adjustment ↑10%

Internal labor costs related to setting up

Htr Amplitude and user training (risk- $471,108 $3,608 $3,608 $3,608
adjusted)

Three-year total: $481,932 Three-year present value: $480,081

INTERNAL LABOR COSTS RELATED TO
ONGOING MANAGEMENT OF AMPLITUDE
Evidence and data. Interviewees said that once their
organizations set up Amplitude, they dedicated
employees to do ongoing management activities.
This could include building and adding features,
handling ticket requests, or being involved in
recurring touchpoints with the Amplitude team on
how best to take advantage of the platform.
• The engineer at a social media company shared:
“There are two people who occasionally go
through and do data hygiene work. They spend
about 10% of their time [on this], which I think
they should be doing a lot more.”
• The chief product officer at an entertainment firm
added: “We have someone on my team in charge
of the management of Amplitude. Anytime we
have an issue or have a question, that is the
person we call. We also have another person
responsible for checking that everything is
working fine.”
• The director of product management in
healthcare told Forrester: “We made sure that
each team had one person who knew how to do
analytics tickets. We’re building features,
handling tickets, [and] everything.”
Modeling and assumptions. For the purpose of the
composite organization, Forrester assumes that:

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 25

 ANALYSIS OF COSTS

• Two employees dedicate 30% of their time to • The skill set, knowledge, and capabilities of the
ongoing management of Amplitude. organization’s employees.

• The fully burdened annual salary of an involved
employee is $100,000.
Risks. The exact cost and time invested by an
organization can vary, depending on factors such as:
• The complexity of the organization’s product
analytics and the environment work being
conducted.
• The organization’s industry and geography,
which can impact the assumed fully burdened
annual salaries of employees.
Results. To account for these risks, Forrester
adjusted this cost upward by 10%, yielding a three-
year, risk-adjusted total PV of $164,100.

Internal Labor Costs Related To Ongoing Management Of Amplitude

Ref. Metric Source Initial Year 1 Year 2 Year 3

I1 Employees involved Interviews 2 2 2

Percentage of time dedicated to

I2 Interviews 30% 30% 30%
management of Amplitude
Fully burdened annual salary of an
I3 TEI standard $100,000 $100,000 $100,000
involved employee
Internal labor costs related to ongoing
It I1*I2*I3 $0 $60,000 $60,000 $60,000
management of Amplitude

Risk adjustment ↑10%

Internal labor costs related to ongoing

Itr $0 $66,000 $66,000 $66,000
management of Amplitude (risk-adjusted)

Three-year total: $198,000 Three-year present value: $164,132

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 26

Financial Summary

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
$8.0 M
Cash
flows

payback period for the composite

organization’s investment. Forrester
$7.0 M
assumes a yearly discount rate of 10%
for this analysis.
$6.0 M

$5.0 M

$4.0 M

$3.0 M These risk-adjusted ROI,

NPV, and payback period
$2.0 M values are determined by
applying risk-adjustment
$1.0 M factors to the unadjusted
results in each Benefit and
Cost section.
-$1.0 M

-$2.0 M
Initial Year 1 Year 2 Year 3

Cash Flow Analysis (Risk-Adjusted Estimates)

Present
Initial Year 1 Year 2 Year 3 Total
Value
Total costs ($471,108) ($778,358) ($799,621) ($821,521) ($2,870,607) ($2,456,771)

Total benefits $0 $2,076,713 $3,275,686 $4,256,653 $9,609,052 $7,793,187

Net benefits ($471,108) $1,298,355 $2,476,066 $3,435,132 $6,738,445 $5,336,416

ROI 217%

Payback <6 months

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 27

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
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.
THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE
PRESENT VALUE (PV)
The present or current value of
(discounted) cost and benefit estimates
given at an interest rate (the discount
rate). The PV of costs and benefits feed
into the total NPV of cash flows.
NET PRESENT VALUE (NPV)
The present or current value of
(discounted) future net cash flows given
an interest rate (the discount rate). A
positive project NPV normally indicates
that the investment should be made
unless other projects have higher NPVs.
RETURN ON INVESTMENT (ROI)
A project’s expected return in
percentage terms. ROI is calculated by
dividing net benefits (benefits less costs)
by costs.
DISCOUNT RATE
The interest rate used in cash flow
analysis to take into account the
time value of money. Organizations
typically use discount rates between
8% and 16%.
PAYBACK PERIOD
The breakeven point for an investment.
This is the point in time at which net
benefits (benefits minus costs) equal
initial investment or cost.
28
Appendix B: Supplemental Material
Related Forrester Research
“Now Tech: Customer Analytics Technologies, Q1 2022,” Forrester Research, Inc., January 18, 2022

“Now Tech: Journey Management Platforms, Q4 2021,” Forrester Research, Inc., December 21, 2021

“The Business Impact Of Digital Experience Technology Is Profitable Growth,” Forrester Research, Inc., March 1,
2021

“The ROI Of CX Transformation,” Forrester Research, Inc., January 22, 2021

Appendix C: 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.
2 Source: “The State Of The Insights-Driven Business, 2022,” Forrester Research, Inc., August 24, 2022.
3Average revenue per user (ARPU) is the amount of money an application generates from all users and revenue
streams for the application. Source: “Fundamentals Of Financial Forecasting Guide,” Wall Street Prep.
4 Ibid.
5The average retention rate across 31 categories by Day 30 is 5.7%. Source: “Mobile Growth Basics: User
Retention,” Mobile Growth Association, January 9, 2023.
6Average revenue per paying user (ARPPU) is the amount of money an application can expect to generate from its
paying users over a set period of time, excluding nonpaying users and revenue gained from sources other than
paying users. Source: “Fundamentals Of Financial Forecasting Guide,” Wall Street Prep.
7Source: “The Future Of Customer Insights Will Power Next Best Experiences,” Forrester Research, Inc., March
15, 2023.
8 Fully burdened salary includes both the direct wages and indirect costs of hiring and employment. Burden rate
refers to indirect costs of employment beyond direct compensation that are including but not limited to hiring costs,
training costs, financial services, paid time off, sick leave, expenses, retirement contributions, payroll taxes,
incremental technology, and workplace costs for the employee.
9 Source: “The State Of The Insights-Driven Business, 2022”, Forrester Research, Inc., August 24, 2022.

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 29

THE TOTAL ECONOMIC IMPACT™ OF AMPLITUDE 30