What Drives the Cost of an Insights Community?
An insight community can be a significant investment. But when appropriately developed and cultivated, the cost is well worth it – enabling a third-party partner to engage with consumers and glean insights in an efficient manner. While there is no “one-size-fits-all” guide to determining the exact dollar amount to budget for your insight community, having an understanding of the components that contribute to the overall community investment will enable you and your organization to make an informed decision about which components are most critical to your business needs.
Five key cost-determining factors include:
The member composition of your community should be tailored to your specific community needs, and as such, impacts the cost of bringing members into your community. Influencing factors include:
- Criteria: Who want to engage via the community
- Thoughtfully consider the types of individuals you want to include in the research for the community, ensuring to balance specificity with frequency of need, as the easier the people are to recruit, the lower the cost, whereas more niche audiences add investment and time to the set-up process.
- Source: Where you will find the sample
- Sample fees can be a large portion of the investment. If you’re able to recruit from an existing customer list, CRM database, or loyalty program, or build a web intercept strategy, you can offset this cost. However, recruiting from opt-in research panels or social media can require a larger out-of-pocket expense.
- Size: How many members you’re recruiting to join the community
- The larger the community, the more effort is required to engage and ensure quality response rates. Ensure to right-size the community based on the intended use (for example, qualitative exploration vs. quantitative validation) to help save on costs to acquire sample, as well as balance the time spent on engagement strategies.
- Refresh: Bringing in new members over time
- Community member refreshes are often necessary to replace inactive members and bring in new perspectives. The frequency and volume of members that need to be replaced will vary based on community duration and level of engagement, however, a good rule of thumb is to anticipate refreshing about 25% every 6 months.
The platform technology itself requires web hosting fees as well as development fees to enable continuous maintenance and upgrades. Fee amounts can vary greatly between different platform providers – ranging from thousands to hundreds of thousands of dollars per year. Determinant factors can include the platform’s features, the platform’s development pipeline, the volume of member accounts being hosted, and if or what other software integrations you plan to connect to the community. Fees may be processed on a monthly, quarterly, or annual basis.
In order to keep the community running smoothly, project management labor will be allocated to:
- Manage member engagement, including keeping members engaged to reduce attrition, answering member questions, and administering incentives.
- Monitor community health and ensure high quality responses (and removing low quality participants and inactive members).
- Manage research activity cadence.
Dependent upon your insight community partner’s role in executing and analyzing research activities within the community, research services could make up a small component or the largest component of the overall insight community cost. The amount allocated to research services will depend on several factors, including:
- Your insight community partner’s role in the research, which could be leading execution and analysis or simply setting up and fielding activities your team will draft and analyze.
- Volume of research activity, which could span from several activities a week to one a month.
- Complexity and types of research activities, such as quick surveys and polls to qualitative journals to virtual focus groups and more.
An important way to keep members interested and minimize member attrition are monetary incentives for participation. There are different options for incentivizing members, including:
- Pay-per-complete incentives: Online rewards for each individual participant
- While this is typically the costliest incentive option, it does show appreciation for the individual’s time, every time they participate, and encourages higher response rates.
- Sweepstakes: Individuals’ participation earns an entry into a drawing for the reward
- Typically providing some cost savings (compared to pay-per-complete incentives), providing the potential of a monetary reward helps to encourage member participation. Branded communities over unbranded ones tend to see greater success with sweepstakes incentives because of members’ connection to the brand and the intrinsic value of understanding more directly how their feedback is going to impact products and services.
- For branded communities, incentives can also get creative beyond money and/or gift cards, such as points towards your brand’s loyalty program or branded collateral items.
- Keep in mind that going this route may lower the insight community price tag you see from your community partner, however, consider the additional cost to your organization when you’re providing the rewards directly to weigh the total overall cost.
Now that you have a better understanding of the factors influencing an insight community’s cost, consider your organization’s specific needs and determine the right level of investment to deliver against those needs. While you’re researching communities, check out this blog post about top partner selection considerations here: “When Considering Insight Community Partners, Take These Four Factors into Account.“