The emergence of community platforms has been one of the most exciting technology marketplaces to watch over the past few years. These tools have revolutionized digital marketing by allowing companies to develop online communities that they can use to facilitate conversations about products, stimulate innovation initiatives, and generate new levels of customer intimacy. Given the significant competitive advantages that can result from such a highly visible technology, it’s important that sourcing professionals play a role in their procurement.
However, as the market for community platforms grows, so do the challenges associated with managing a variety of suppliers and stakeholder objectives. Many sourcing teams find themselves struggling to consolidate several internal community platforms and identify the vendor that most closely aligns with long-term organizational objectives.
To provide some clarity and best practices around sourcing community platforms, Forrester spoke with seven leading community platform vendors about the evolution of their organizations and their history of working with sourcing teams. Our conversations highlighted seven key points for sourcing to consider when evaluating these technologies:
1. Pay close attention to business model differences
The diversity of business models in this market makes it important for sourcing pros to be savvy to their own business and supplier strengths. For example, a company like Pluck has expertise with high-end publishing and advertising companies, but wants its clients to have some internal development competencies. Contrast that model to Kickapps, which operates more as an on-demand option for Web publishers, or LiveWorld, which differentiates based on its premier services. The best company for one organization may not be the best fit for yours, so make sure to select vendors that are closely aligned with the organization’s unique business goals.
2. Consider how the platform will scale to multiple users and integrate
Many community platform providers are shifting their focus to provide capabilities outside of the marketing organization. This is a positive change for sourcing teams, who are now able to consolidate their collaboration, idea management, and innovation technologies with one vendor. It also means that you need to be keenly aware of factors that could limit scalability. Ask yourself: Does the supplier have familiarity working with non-marketing users? Does the platform integrate with other collaboration tools?
3. Look for a pricing model that fits your objectives
The most common complaint we heard from providers was that sourcing professionals too often compare them to Facebook – a “free” service that lacks sophisticated business focus, customization, and support capabilities. While it’s true that there are a variety of options for developing communities on the cheap, sourcing professionals need to carefully align the right pricing model with their business objective.
Try to look for pricing models that are simple, transparent, value-based and future proof – they will scale easily with greater usage and make the sourcing process less risky.
4. Avoid the “checklist” trap in favour of prioritized features
The good news; new functionalities such as business analytics, workflow management, listening platforms, and Twitter or Facebook integration are pushing the marketplace forward. The not-so-good news? These capabilities make it easier for sourcing teams to get lost in the diversity of offerings. Avoid the trap of creating long “checklists” of capabilities and assuming that the vendor with the most check boxes should win. Instead, prioritize features into “must have,” “nice to have,” and “not important.” Community platforms are not just about branded communities anymore, so building a list of priorities must factor in your expected use of typical community features as well as non-community features (e.g., listening tools, content management, social CRM, and response management).
5. Be prepared to consider new risks associated with new capabilities
Thanks to their highly visible nature, community platforms generate some risk considerations that may be difficult for sourcing professionals to manage. For example, while these companies typically don’t take responsibility for the content generation within the communities, the SaaS models they use may give rise to new data ownership and security concerns. Sourcing teams should clearly understand which risk considerations are worthy of a little “give and take” in order to gain new benefits.
6. Look beyond ROI to overall business value
Conducting an ROI assessment for social collaboration tools can be a frustrating and complex process. Instead of trying to project a clear ROI, focus on the high-level reasons for developing communities and zero in on the metrics which will signal the tools are a success. Look to companies like Telligent that are creating much stronger business intelligence metrics by allowing users to measure factors like user engagement, support metrics, and sentiment.
7. Contractually protect yourself from the impact of market changes
Competing business models, coupled with strong growth and heavy backing from financial organizations, signals that there will likely be some supplier failure and consolidation in coming years. Already, we have seen Jive’s acquisition of Filtrbox and Lithium’s acquisition of Keibi. While these acquisitions were designed to bring new capabilities to the vendors, it’s a good idea to keep an eye on contract provisions that protect your organization and customer information in instances of market change. Moreover, you’ll want to make sure that your vendor has a high likelihood of surviving through any market turmoil.
Christopher Andrews is a senior analyst at Forrester Research, where he serves sourcing and vendor management professionals.
