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This question has been answered, and points have been awarded.
How Much $$ To Develop Online Customer Community?
Posted by Anonymous on
1/18/2008 at 11:56 AM ET
We have a debate running with some friends on how much it costs to develop a 'customer community' for a B2B firm selling to the food/beverage/restaurant trade.
Does anyone have any experience with creating online customer communities with member management, forums, blogs, etc. where they can share a ballpark cost?
1/18/2008 at 1:20 PM
Do you want to be able to plug in advertising? What about graphics, do you want that included? How many topics will you start with in the forum and blog, and who will handle the first postings? Do you need/want search engine submission?
This is a hard question because there are many variables. You really need to layout what you want done in detail on paper to get any realistic estimates.
I just quoted a simple site like this for $1,200, but that was without any custom graphics or content. That was all supplied.
1/18/2008 at 9:11 PM
The responses above are dealing with the easy part, the site build....in addition you must consider the management of the site which is always more expensive, especially in B2B communities.
When companies focus solely on the technology, the community fails rather quickly because it never gains traction.
For a top tier B2B community site, you need excellent software, not off shelf php or freeware. That software no matter how much you play with it or put a nice wrapper around it, looks cheap. You need to go with a good, reputable vendor like Web Crossing, Lithium, or Prospero. Because in the end, you also need your technology to talk to your database so you can do lead tracking. Working with any software in that aspect can be challenging, but our experience with free ware is that you don't get the results you'll need from a data standpoint.
Second, management costs can be expensive. For B2B communities, the visitors who come are looking for information and expect their answers quickly. You need a manager who can escalate questions as needed within your organization. You also need someone who can work to encourage repeat visits and build a group of hyper affiliated members to answer other member questions. Otherwise you have a Q&A self support channel handled by your staff which is expensive. The manager also needs to be able to pull metrics and make sense of them to make changes and report upstream.
Lastly, for B2B communities you must use SEM (especially PPC) to drive traffic. If you build it, they won't come... that costs money too. Without outreach and heavy pull marketing you get a community of a couple of hundred people, with ten or twenty active members. That won't even justify the low costs given above.
So a back of the envelope projection is between $100,000 and $200,000 in order to build it with a professional look, use a marketing budget to promote it, and staff it for a year. Of course, that also depends upon the size of the target audience as a community for an audience of 500 people will be much cheaper to run and to promote.
Too many people that want to jump on the community, user generated content, social network bandwagon want to do it as cheap as they can... that's why most of these projects never get to the scale to be profitable from an ROI standpoint.
The above comes from our experience in helping over 40 organizations build, launch, and manage online communities and social networks. Your mileage may vary... ;-)
1/19/2008 at 8:06 AM
From my experience, building an active and valuable online community is REALLY HARD. The stats are typically like 10% of your users will actually log into the community, and less than 1% will be active. And you need a critical mass of people to make a community valuable (imagine if you posted this question and no one answered.. not valuable). So depending on the size of your community, keep this in mind.
You might start small, like launching a blog that you write for, and allow your community to comment on the articles. Then build your way up to something bigger, depending on the feedback and what people want.
Most of the best communities are built incrementally. They are not "build it and they will come" efforts.
1/19/2008 at 10:33 AM
Dana, in response to your request for a number, the $ depend on what you want in the software, how much management the vendor will do, and how much participation you want. My company, Communispace (
), is probably on the expensive end. We currently run about 20 B2B communities for major corporations and the average annual price is in the high 200s. These communities are private, intimate, high-engagement communities where the members are active insiders, and where they are in frequent conversation with the client and each other. On the other end of the spectrum, you can get very simple technology and just have something available for about $1000/month. What you spend depends on what you are trying to accomplish. The more that you are looking to add value, increase customer insight, increase loyalty and retention, or increase sales, the more you need to spend!
1/25/2008 at 4:22 PM
Dana, all of the comments that have been made are excellent. To add one of my own... I think the most important thing to do at this early stage is to specifically define success. What is the business need that is driving your interest in a customer community and how can that be quantified numerically/financially? For example, if it's customer retention, what is the attrition rate now and what is your target in terms of reducing attrition? Or, if your looking for ways to develop additional revenue streams from existing customers, what are your results now, and what is your target for improvement? And what's the process for matching existing customers with potential additional opportunities? How are you doing that now and what new capabilities do you believe would improve your results?
Approaching this initiative by focusing first on the "what and why" from a business perspective will enable you to properly crystallize the tactics of the "how". You will also find that as you begin to associate financial metrics with the gaps you've identified, a clearer picture will emerge in terms of potential ROI. This of course will help you make a proper judgment about the level of investment that could be reasonably justified, which goes to your initial question. As previous posters have asserted, there is a vast array of solutions out there that range from off-the-shelf installed software for as little as $1500 to highly customized hosted solutions that can cost well into the mid six-figure range on an annual basis. My company (
) provides modular "online community" applications and related email marketing, ecommerce and data research/modeling capabilities to hundreds of clients. While our largest vertical markets are educational institutions and membership associations, we do work with numerous corporate entities as well. All engagements begin with essentially the thought process I summarized above. What is the problem you are attempting to solve or the opportunity you are trying to exploit and how is that specifically defined/measured? Why is this important to you? How can we help? Would love to chat offline if you're interested. Regardless, I hope this information is helpful.
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