Adobe Experience Platform (AEP) is a cloud-based technology that allows enterprises to control and manipulate customer data profiles in a way that helps them make digital experiences perform much better through relevance and experience quality – and performance means profits. With all such powerful, robust marketing-technology platforms and tools, AEP is certainly not a cheap solution, but rather than asking the short-sighted question of, “how much does AEP cost?”, e-commerce marketing professionals should be considering, “is the investment is worth the payoff?”
The Challenge of Enterprise Data and Adobe Experience Platform
Many enterprises (both B2C and B2B) struggle with control, manipulation and deployment of data-based experiences. The Adobe Experience Platform is the Adobe stack for finally taking care of that. The value proposition for AEP is defined on their features page:
Centralize all your customer experience data to build real-time customer profiles and apply powerful data science and AI for instant personalized cross-channel experiences at scale.
The technology allows enterprises to ingest, standardize and store customer data. It provides a unified data foundation that creates real time customer profiles so you can deliver customer experiences based on real time needs. For enterprises with significant e-commerce presences this is very important because it allows them to realize percentage point gains across a number of key metrics:
- Increase average cart value
- Increase revenue per year / lifetime value (LTV)
- Decrease abandonment and turnover
- Increase ROAS
And many more.
Typically, all of these metrics start to improve by percentage points if a merchant finally has control over their data and is able to offer personalized, relevant experiences from the time of the first digital interaction. But getting a handle on customer data and deploying it the right way is expensive. AEP is expensive and it’s expensive to design, develop, configure and deploy.
The question is at what point and for what size organization is a tool like AEP affordable and a wise investment? By looking at some e-commerce metrics and some related math that a merchant can positively impact using the AEP tool set, I would argue that more companies, smaller enterprises should consider sooner than they think on their growth curve. Let’s look at a hypothetical payback model; the following numbers are for illustration only.
The Cost: Can You Afford It?
Sorry, but like any enterprise software implementation the cost for licensing and deploying AEP is going to have a very wide range. But for the purpose of this brief article let’s assume the following about our hypothetical company contemplating an investment in Adobe Experience Platform:
- $600mm revenue
- Net profit before taxes $180mm
- 5,000 customers 6% growth
- $120 revenue per customer per year
- $200mm current e-commerce revenue
- $150mm B2B e-commerce GMV
- $ 50mm B2C e-commerce GMV
- 92% of all new customers in 2020 interacted with the company website prior to purchasing
And let’s say the total investment required including “internal” time is $2.5mm in year one.
It seems like a lot of money doesn’t it? Now let’s consider using very conservative metrics that a tool like this might deliver against:
- Revenue per Customer Increase: 12% increase
- Decrease in marketing operation costs / Increase in ROAS of $1.5mm
- Increase in #customers through referral: 10%
- Average order value increase from $60 to $70 (about 12%)
With these improvements the company would realize a gross impact of $4mm in revenue improvements in year that is measurable and that tracks back to experience improvements that are attributable back to AEP . Even if measured against net profit on that revenue, the investment comes close to breaking even after the first year.
The Bottom Line
While mid-market and “not-quite enterprise” scale companies may believe they can’t afford investments in digital transformation projects like an implementation of Adobe Experience Platform, it’s worth looking at how a product like AEP can impact a small number of key e-commerce metrics and how that translates to your bottom line.
E-commerce merchants with $20mm, $50mm, $100mm revenues should take a look at it or others that allow them to harness customer data into better buying experiences. It’s not just for giant enterprises; the business case for an investment in this type of technology also works for smaller companies. Obviously these metrics may be very different from company to company but if you don’t think you can afford a great tool like AEP to get a handle on data and improve your customer experience, think twice. The payback may be much bigger and more immediate than you think.
Contact us if you are interested in finding out if the ROI math works for you.