January 1, 2020 | 9 min read

The Naked Business Case

A foolproof recipe for estimating value and calculating the ROI of a marketing technology solution.

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Editor's Note: Enjoy this blog from the Custora archive, acquired by Amperity in November 2019.

A foolproof recipe for estimating value and calculating the ROI of a marketing technology solution.

Cooking is one of my favorite hobbies. And the Naked Chef by Jamie Oliver is one of my favorite cook books. In this amazing cookbook, Jamie takes all of the trade secrets he has accumulated since he started cooking at age eight and distills them into a refreshingly simple style that really works for people who are passionate about food, but don’t always have a lot of time, money, or space.

Well, I haven’t been building business cases for software purchases since the age of 8, but I have spent the last 20 years helping software buyers understand and articulate the value of the technology that they are interested in purchasing. In this series of posts, I will share a great template for building a business case (your recipe) and describe all the ingredients that you need to estimate value and calculate the ROI of an investment in a customer analytics solution. This guide will be most helpful for marketers who don’t have the time to build a business case from scratch or the luxury of a finance team to build a business case for them.

I will provide the recipe (a business case template) and the ingredients (language, proof points, and calculations) that you need to cook up your own compelling business case.

For those of you new to purchasing marketing technology, the business case serves as the key internal communications vehicle for the project, helping everyone involved understand the initiative’s business objectives, funding requirements, and expected benefits. If you do this right your business case will:

1. Accelerate the project approval process. As the single source of truth for the project, a clear, succinct and jargon-free business case is crucial to answering key questions upfront and minimizing potential confusion among multiple stakeholders.

2. Increase project success by keeping all parties focused on the key objectives. The business case is the “north star” that keeps the project focused on key business goals and measurable and quantifiable outcomes.

3. Take emotion out of the decision. Moving the discussion to numbers and metrics taken directly from the business case minimizes the potential emotions and ensures some level of objectivity to the process.

Bon appétit, and stay tuned.

Last week, I introduced Part 1 of a template that marketers can use to cook up a compelling business case for software purchases. This week, I'll cover the Executive Summary and Problem description.

Executive Summary

The executive summary needs to provide a clear and succinct summation of the project purpose and expected value. The following Mad Libs-type exercise can be very helpful:

“We will be doing ____to make ____better, as measured by ____, which is worth_______.”

Sample executive summary:

We will be implementing Custora’s Customer Analytics Platform which will organize all of our customer data from multiple systems into holistic customer profiles, enrich these profiles with predictive and prescriptive customer insights, and make those insights easily accessible to our existing tools and people. Implementing this platform will to make our marketing campaigns perform better, as measured by our ability to acquire new high-value customers, generate more incremental revenue from existing customers, and re-activate inactive customers. By syndicating customer insights beyond marketing into the entire organization, we will evolve into a truly customer-centric organization. This transformation will drive 2% in incremental revenue to the business in the first year of adoption and will set the stage for long term competitive differentiation.

Problem description

This is where you describe your current situation, the problem you are trying to solve, and the ideal future state that you would like to achieve.

For Custora customers, this problem description often looks like this…

Current state

At BigStore Unlimited, we are struggling to find new ways to drive growth and to hit our performance targets. The things that have worked in the past just aren’t having the same impact today. We can’t send more emails—we are overwhelming our customers already. We can’t spend more on advertising—our budgets are flat. And we can’t run more sales—our consumers already suffer from promotion fatigue. We know we could do better if we were only able to use the massive amounts of customer data that we are capturing.

The problem - why can’t we make better use of our customer data?

We’ve found that most marketing teams identify with one of two challenges—either they don’t have a scalable way to generate insights from the massive amounts of customer data that they are collecting, or they find it difficult to turn insights into actionable campaigns and programs. We call it Smarketing and Farketing.

  1. Smarketing (or Smarter Marketing)

Smarketing means that you understand that your customer data has potential to improve marketing results, but you struggle to unlock the value. Your biggest challenge is that you have limited data science resources in-house and they can’t keep up with the demand. Or you can’t afford to keep paying a CRM service provider to do advanced segmentation and customer analysis for you. The net result is that the marketing team continues to miss opportunities to dramatically improve campaign performance due to a lack of customer insights.

  1. Farketing (or Friction in the Marketing Department)

Farketing means that you have a top-notch data science team or agency, but the marketing team struggles to put those insights into action. It could be due to lack of integration within the marketing technology stack. Or the time required to get segments built and files transferred. But it means that you are missing opportunities due to friction in the process of using insights to drive better campaign performance.

Best practices

Best-in-class retailers are adopting solutions that help them uncover and democratize customer insights. These systems allow retailers to aggregate customer data across multiple systems, giving marketers easy access to information such as website interactions, mobile interactions, in-store behavior, and marketing campaign engagement. These best-in-class companies are also using machine learning and advanced analytics to derive insights from this data—identifying the signals from the noise—and syndicating those insights into marketing and analytics tools across the organization.

  • The marketing team gets a super intuitive natural language-based segmentation tool they can use to acquire customers most likely to have high CLV, predict and prevent churn, use promotions only where needed, and know who is most likely to buy brown boots in October.

  • The merchandising team gets a better way to manage the conflicting demands between merchandising and marketing and can better predict future trends and product preferences.

  • The finance and senior leadership teams get access to customer health metrics that can be incorporated into their favorite reporting tool.

  • The real estate team gets to see how in-store interactions impact overall customer lifetime value, and how CLV is impacted based on store location and store type.

Last week, I introduced Part 2 of a template that marketers can use to cook up a compelling business case for software purchases. This week, I'll cover the final pieces—the solution description, key goals and metrics, and the ROI analysis..

The solution

It is often easiest to use language from the vendors to help define the solution. For Custora, the solution description would look like this:

Custora is an advanced customer segmentation platform that puts the power of predictive analytics into the hands of the marketing team at Big Store Unlimited.

Our marketers will be able to send more relevant, timely, and effective communications.

Our brands will increase ROI across marketing channels with customer-level predictive insights that are easy to activate.

And our customers will receive more messages for things that they actually care about.

The Custora solution has three components:

  • A Customer Data Cloud where customer data is aggregated and enriched with predictive goodness.

  • Segmentation Studio where marketers can build self-serve predictive customer segments, push them into marketing campaigns, and measure the results vs a control group.

  • Switchboard which syndicates customers insights into other tools and teams.


The timeline is essential to understand the costs and disruptions of this investment beyond licensing and service fees.

For example, a Custora Integration typically will take 8-12 weeks, and will require significant time commitments from the client’s CRM analyst, an IT representative responsible for data management, and the project champion. The work is broken into three categories—Discovery, Execution, and Validation.

Key Goals and Metrics

In this section you need to create estimates of the value that can be generated from this investment. You will need validated examples and performance ranges to have a high level of confidence in your projections.

For a Custora business case, the value is derived through two essential product capabilities: Segmentation Studio (making segmentation smarter and easier) and Switchboard (syndicating customer insights into other marketing and analytics tools across the organization). The tables below describe the value generating use cases, a range of expected results, and instructions for estimating the value that your company can achieve.

Segmentation Studio

Segmentation Studio gives marketing teams the power to build self-serve segments based on any customer variable including past action and predicted future behavior, automatically push those segments into marketing engagement tools for campaign execution, and track results against a control group.

Segmentation Studio value is measured in terms of increases in the number of new customers acquired, improvements to the revenue generated from existing customers, and the reactivation of inactive customers.


Switchboard is the Custora solution that syndicates customer insights into customer engagement tools and other BI solutions. Value is measured in terms of incremental revenue and profit generated from existing customers as well as in the overall performance of the marketing and merchandising teams through a better understanding of customer behavior. The benefit here is hard to fully quantify—the impact of Switchboard is experienced over time as the entire organization becomes more customer centric. More impactful in- store clienteling, better store opening/closing decisions, more merchandising wins, better store assortments, more effective customer service—the potential benefits are immense. These non-marketing capabilities of the Custora platform should be looked at as untapped assets that have tremendous future potential.

ROI Analysis

Measuring return on investment involves estimating the incremental revenue that will generated by the investment minus the costs to purchase, implement, and support the solution over time. The numbers that you will need to do this calculation:

  • Estimated incremental revenue per year over three years.

  • Software annual subscription costs

  • Software service costs

  • Headcount required to implement and manage the solution

  • Cost of capital (for the net present value calculation to determine estimated value to the business in today’s dollars)

For this final section of your business case you will need to get price quotes from the vendor, craft your own estimate of the time and effort required for implementation from the timeline section of the business case, and the time and effort required for ongoing support and maintenance.

There you go. A tasty business case recipe, and all the ingredients that you need to build an actual business case for Custora. If you’ve got different format for a business case or questions about this model please reach out. I’d love to hear from you.