Variable Costs
We are investigating whether to sign up for Google Analytics Freemium version (standard) or
invest in Google Analytics 360 (Premium) to track our website performance. The purpose of
using Google Analytics is to help us understand our customer better through their online
behavior and interactions with our site (Google, 2018). As a new company with the ambitious
goal of making intergalactic travel affordable and environmentally friendly, or as we like to say,
“saving earth by leaving it behind,” our budget priorities skew heavily towards R&D investments
given the high technology costs of our rocket ships, technical expertise, and operations. Though
our mission is large, our business philosophy is more in line with that of a small start-up.
Because of this need and focus, we were at first wary of the $150,000 a year price tag for
Google Analytics Premium at this early stage of our company’s inception. We first looked
at the $150,000 cost of subscribing to Google Analytics Premium plus the cost of implementation
and labor, which we estimated to be at least as much as the cost of subscription for one year, as
being a major cost sink for us at this stage. We ultimately shifted our view by considering the total
cost of ownership (TCO) of Google Analytics software system, and took a more strategic angle in
our cost analysis (Gallaugher, 2015) in this specific technology project.
invest in Google Analytics 360 (Premium) to track our website performance. The purpose of
using Google Analytics is to help us understand our customer better through their online
behavior and interactions with our site (Google, 2018). As a new company with the ambitious
goal of making intergalactic travel affordable and environmentally friendly, or as we like to say,
“saving earth by leaving it behind,” our budget priorities skew heavily towards R&D investments
given the high technology costs of our rocket ships, technical expertise, and operations. Though
our mission is large, our business philosophy is more in line with that of a small start-up.
Because of this need and focus, we were at first wary of the $150,000 a year price tag for
Google Analytics Premium at this early stage of our company’s inception. We first looked
at the $150,000 cost of subscribing to Google Analytics Premium plus the cost of implementation
and labor, which we estimated to be at least as much as the cost of subscription for one year, as
being a major cost sink for us at this stage. We ultimately shifted our view by considering the total
cost of ownership (TCO) of Google Analytics software system, and took a more strategic angle in
our cost analysis (Gallaugher, 2015) in this specific technology project.
But after looking at the above features of the Google Analytics 360 (GA360), we realized that with
the 150k investment comes implementation support, consulting services, a dedicated account
manager, search marketing and other services that take the burden of managing and operating
the system off of us as an organization. We will look at the value this brings in later sections of this
project.
the 150k investment comes implementation support, consulting services, a dedicated account
manager, search marketing and other services that take the burden of managing and operating
the system off of us as an organization. We will look at the value this brings in later sections of this
project.
If we assume our website currently generates $10 million a year in revenue for us by converting
visitors into customers/passengers on our rocketships, $150k is about 1-2% of that revenue. We
are confident that GA360 will help us improve our site content, target marketing, and sales lead
generation. If we can increase that percentage conversion rate even just 1% more, we would have
earned back our $150k investment and then some. Our estimates show that earning $150,000 in
increased sales each year would lead to a total ROI over 10 years of 900%.
visitors into customers/passengers on our rocketships, $150k is about 1-2% of that revenue. We
are confident that GA360 will help us improve our site content, target marketing, and sales lead
generation. If we can increase that percentage conversion rate even just 1% more, we would have
earned back our $150k investment and then some. Our estimates show that earning $150,000 in
increased sales each year would lead to a total ROI over 10 years of 900%.
Implementation and Fixed Costs
The fixed cost of licensing GA360 for a year is $150,000. To purchase the system we have
to go through a certified reseller. An implementation audit, consulting, and support services
are included in the $150,000 license cost to GA360. This is a major reason we are going
with the premium version so that we can outsource everything from setup to management.
to go through a certified reseller. An implementation audit, consulting, and support services
are included in the $150,000 license cost to GA360. This is a major reason we are going
with the premium version so that we can outsource everything from setup to management.
Upfront and Recurring Costs
Net Zero Gravity’s current financial situation is based on payments from investors and
customer reservations of rocketship trips off planet Earth. Most of our focus is set on R&D
growing interest in the company and our mission. The upfront cost of implementing GA360
were mentioned above as a fixed amount of $150,000 per year. Everything needed to
implement the system and operate it is included in this price. The recurring costs of our
GA360 license will stay consistent given the fixed cost of licensing GA360 and the support
services that are included in the licensing price. As mentioned, this is of benefit to us because
the expertise Google offers us is something we are not equipped to provide ourselves. With
the focus of our company being mainly on R&D, the ability to outsource the work and maintain
our system over the phone or computer makes a lot of sense for us, so we can place our
efforts on building a brand and recognition, and analyzing the results of our data, not managing
data collection. By outsourcing this to Google Analytics it frees up a time and manpower that
can be used on other projects.
References
Google (2018) Google Analytics Solutions, Features. Retrieved from:
https://www.google.com/analytics/analytics/features/
https://www.google.com/analytics/analytics/features/
Google (2018) Google Analytics Help, Data Limits. Retrieved from:
Gallaugher, J. (2015). Information Systems: A Manager's Guide to
Harnessing Technology, v. 4.0, Version: 5.0; eISBN: 9781453375747;
Publisher: Flatworld Knowledge
Harnessing Technology, v. 4.0, Version: 5.0; eISBN: 9781453375747;
Publisher: Flatworld Knowledge
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