To carry out an effective cost-benefit analysis, it is essential to understand the elements that comprise it.
Each component of this analysis helps identify and quantify the costs and benefits of a decision, ensuring the process is as accurate and strategic as possible .
Next, we will detail these components so that you have a clear vision of how to structure them and use them to support your business decisions!
Direct and indirect costs
Direct costs are those that can be directly attributed to occupant resident lists a specific activity , such as:
sales team salaries;
marketing expenses;
promotional materials.
Indirect costs include general expenses that cannot be attributed to a single project, such as rent and utilities.
Example: If a company decides to launch a new marketing campaign, direct costs will include advertising expenditures, while indirect costs may include a proportion of office rent and administrative salaries.
Tangible and intangible benefits
Tangible benefits are those that can be quantified in financial terms , such as increased sales and reduced costs.
Intangible benefits , on the other hand, include aspects that are difficult to measure , such as improved customer satisfaction and brand strengthening.
Example: By investing in a new CRM system, a company can expect a tangible increase in sales due to better organization of leads, while increased customer satisfaction can be considered an intangible benefit.
Return on Investment (ROI) Analysis
ROI is a fundamental metric that allows you to evaluate the efficiency of an investment.
It is calculated by dividing the net profit of the investment by the total costs and expressing the result as a percentage. This analysis helps determine