The Total Economic Impact™ (TEI) methodology has been around for decades, used by our clients to determine the impact that their products and solutions have already had on existing customers. I joined the team in early 2021 and quickly learned how to interview users of a product, asking them about the value they have realized since implementing the solution. After taking an interest in our New Tech methodology, however, I learned that this approach doesn’t work for everyone. Anonymized clients and customers have told me …
- Client A: “Our product was launched last month. Our customers can only speak to their proof-of-concept (PoC) experience.”
- Client B: “We have a new product that we are introducing into the market soon, but our customers are all still in the pilot or discovery phase.”
- Client C: “I like to think that our organization is charting new territories. There are no really good comparisons of existing alternatives to what our solution does.”
These are fairly common situations but still present a challenge for a traditional TEI study. To conduct a traditional TEI study, we need to speak with customers who have used the evaluated product for at least six months. The assumption is that these customers have had the time to not only experience the benefits of the product but to measure and quantify these benefits and can thus share these metrics with us. The three “clients” above don’t have these customers with these metrics to share. This is where the New Tech TEI comes in.
Unlike the traditional TEI, the New Tech TEI methodology allows for a forward-looking ROI story that bridges the gap between historical data and business-value impact. Rather than uncovering benefits already achieved, the New Tech TEI makes projections about the value that an organization will get from their technology investment. These forecasts can be based on key product features, initial data from a pilot or PoC, interviewed customers’ expectations based on their understanding of the solution, or industry surveys and/or research on similar technology. Instead of asking “What benefits have you experienced from this solution?” we ask “Do you expect to experience these benefits?” and “Why do you think you will experience these benefits?” and “What would success look like in these benefit categories?”
In the same way that a traditional TEI provides an organization with quantified justifications to investing in their solution, the New Tech TEI can then be used as a point of engagement with prospective customers, current customers, and even internal stakeholders.
As seen in the concerns shared by TEI clients above, there are specific use cases where New Tech TEI is applicable:
- An existing technology newly launched by a vendor. This means that the company does not have many (if any) customers that have used their technology long enough to have realized and tracked any business impact that their investment has made. They may have completed a pilot or a PoC to have an initial sense on the different areas where they might benefit but not enough historical data of usage that a traditional TEI would require.
- A new or emerging technology. This is usually the case for companies that are pioneers in a certain space. While the company should already have at least four customers who can speak to their experience of using the product, since the space is relatively new, the company is still looking for ways to educate the readers about this technology. In this case, the New Tech TEI is used as market-education collateral to help prospects be aware of how this product can help them.
When used within these contexts, as long as your company has customers who have tried using the product in some way (pilot, beta, or early-stage contract), the New Tech TEI could play a big role in helping your new technology establish its position in the marketplace by quantifying future benefits that an investment in this technology can generate.
So if you are interested in the TEI methodology but don’t think that you have an established-enough product in the market, perhaps the New Tech TEI is what your company needs. Reach out to me or another TEI consultant at Forrester, and we’ll help you get started.