Terralanes’ ROI
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Summary: Extremely conservative estimate: $24k in revenue and $2400 in margin per employee
More “real world” numbers: $624k in revenue and $93k in margin per employee
Conservative Numbers
For the sake of this example, we are going to be using extremely conservative estimates here. Real world application of Terralanes will likely see ROI’s at multiples higher than the example below.
The Situation
One Account Manager
You have one account manager. Their role is to manage and grow their existing customers. You just signed them and yourself up for an account in Terralanes. What happens if this AM starts using Terralanes? Let’s take a look.
One Lane
Let’s assume this account manager is working with a customer who has a lane that you currently do not manage. The AM has mentioned this lane to you once or twice, but it seems to be something they always forget to ask the customer about or push to try and acquire it.
Volume
This lane runs just 12 times a year, once a month, and the customer assigns all 12 loads to one provider.
Revenue & Margin
Using Terralanes to focus on this lane opportunity, the AM has strategically and efficiently gathered information on the requirements, pain points, incumbent pricing, and potential carrier partners.
The AM is confident they can run the lane for $2,000 at 10% margin. The customer gives you the lane. How does that impact your business?
The Numbers
With the extremely conservative numbers used above, we can calculate the revenue and margin per year this lane will generate as a result of using Terralanes.
Revenue per Year
1 Account Manager * 1 New Lane Won for the Whole Year * $2,000 Avg. Lane Revenue * 12 Loads in Annual Volume = $24,000 in Annual Revenue
Margin per Year
$24,000 in Annual Revenue * 10% Avg. Margin per Load = $2,400 in Annual Margin
The Cost
Free
Terralanes has three pricing options. The first user for any brokerage is always free, permanently!
Monthly Billing
For this example, we have a sales director and an account manager on the same brokerage account. Every user after the first is charged at $50 per person per month.
Annual Billing
There is also an annual billing option. Users can get a 20% discount if they opt into annual billing. For the second user in a brokerage, that would be $480 due when they sign up, saving the brokerage $120 a year.
Terralanes ROI
Taking the annual margin we acquired from this lane opportunity using Terralanes and dividing by our two user cost, we can get the return on investment estimate.
$2,400 Annual Margin / $600 Monthly Billing Annual Cost = 4 = 400% ROI
Making Some Changes
The example above is unrealistic in a number of ways.
- The example assumes that account managers using Terralanes will win only one new lane a year.
- The example lane opportunity has a very small annual volume of 12 loads.
- The example assumes the average margin for this lane will be fairly low at 10%.
More Realistic Figures
Let’s change the example above in a few ways.
- Let’s assume the account manager will win 6 lane opportunities a year. This is still a low number for an AM using Terralanes as that’s only winning a new opportunity every 2 months.
- Let’s assume those lane opportunities have an annual volume of 52 (one a week).
- Let’s assume the average margin for those lanes will be 15%.
New Revenue per Year
1 Account Manager * 6 New Lanes Won for the Whole Year * $2,000 Avg. Lane Revenue * 52 Loads in Annual Volume = $624,000 in Annual Revenue
New Margin per Year
$624,000 in Annual Revenue * 15% Avg. Margin per Load = $93,600 in Annual Margin
New ROI
$93,600 Annual Margin / $600 Monthly Billing Annual Cost = 195
