So what’s the cost of deploying social commerce?
Wondrous Forrester report out by Sucharita Mulpuru, listing 17 social commerce tools, how they are being used and, critically, what they cost. ATG have posted the Forrester TechRadar Social Commerce Q1 2010 Report for free download here – but excerpted below are Forrester’s estimated costs for 15 social commerce tools. Given some of the estimated costs – it’s easy to understand why startups and digital agencies alike are falling over themselves to get some of the social commerce action.
Whilst some of the tools listed may be a little prosaic (e.g. virtual worlds) and some may be missing (notably private shopping event tools, group-buy tools and social ‘engagement’ ads) – this Forrester report is nevertheless an excellent back-pocket resource and price guide..
1. Co-Browsing and Co-Shopping
- Definition: Chat-type functionality that enables synchronous communication between two or more people on two or more devices
- Usage Scenario: A retailer wants to effectively replicate offline-shopping behavior in which shoppers often browse with other people they know. It can also provide a customer service benefit and Web-enabled personal shopping service.
- Example Vendors, Agencies and Companies: DecisionStep (ShopTogether), LiveLOOK, Quorus
- Estimated Cost to Implement: Development time, analytics, and ongoing maintenance; licensing or usage fees for applications; starts at $2,000 per month and can range upward to $5,000-$10,000 in monthly online expenses
2. Company Blogs
- Definition: Retailer-led blog content with frequent updates and dedicated resources
- Usage Scenario: A retailer wants to enable search engine optimization and further supplement its brand personality online.
- Example Vendors, Agencies and Companies: Awareness, Six Apart (TypePad)
- Estimated Cost to Implement: Up to $250,000 annually depending on dedicated resources and monitoring tools and assuming opportunity cost of executive participation in the blog
3. Company Social Network Pages
- Definition: Fan pages on social networks administered by companies, brands, or retailers
- Usage Scenario: A retailer wants to create a presence that collects fans/followers on social networks such as Facebook or MySpace.com, enabling it to push promotions or other company-specific content – as well as observe and participate in dialogue among anonymous customers/followers.
- Example Vendors, Agencies and Companies: Alvenda, Facebook, MySpace.com, Resource Interactive
- Estimated Cost to Implement: Costs start at $5,000 depending on volume of updates, moderation services, and fan acquisition efforts, including cost of moderator time and any additional application development or analytics expenses; creation of stores on social networks can start at $50,000.
4. Customer Ask-and-Answer
- Definition: Shopper-posed questions on product attributes for query to a broader shopping community
- Usage Scenario: A retailer wants to enable a community to pose specific questions about products or services, which can be answered by others in the community or by a brand steward to educate an audience, drive search engine optimization, or create content to populate a larger knowledge base.
- Example Vendors, Agencies and Companies: Bazaarvoice, PowerReviews, RateVoice
- Estimated Cost to Implement: It includes initial development effort and then ongoing customer service maintenance and reporting; can be as low as $10,000 for vendor support; may require substantial customer service efforts; and costs approximately $25,000 or more.
5. Customer Ratings and Reviews
- Definition: Star rating systems on Web sites, social tag applications, and open text verbiage enabling consumers/users to comment on their experiences with a product, service, or company
- Usage Scenario: A retailer wants to provide richness to end users around product content that is typically unavailable in core product descriptions. It leverages the fact that consumers typically trust other consumers about products more than they trust companies. Additionally, this functionality provides feedback to companies and manufacturers about the strengths and weaknesses of their products.
- Example Vendors, Agencies and Companies: Bazaarvoice, PowerReviews, RateVoice
- Estimated Cost to Implement: Variable, based on number of products and reviews; frequently outsourced with minimal need for internal company resources; at least $5,000 per month for a $10 million to $20 million eCommerce retailer; as low as $30 per month for small retailers
6. Employee Networks
- Definition: Web sites that enable company employees to post content and comments to share information to empower them to do their jobs better
- Usage Scenario: A retailer wants to train store associates and connect geographically dispersed employees with information through a central repository.
- Example Vendors, Agencies and Companies: Yammer, in-house
- Estimated Cost to Implement: Requires development and moderation expenses if executed in-house; could require full-time development and moderation efforts; costs more than $200,000 for most deployments
7. Microblogs (e.g. Twitter)
- Definition: Short RSS-like content pushed through content sharing services
- Usage Scenario: A retailer wants to post sales or comments to users who may have questions or feedback on an experience or product.
- Example Vendors, Agencies and Companies: Twitter
- Estimated Cost to Implement: Cost is minimal, representing cost of moderator time and any additional application development or analytics expenses. It should be less than $25,000.
8. Online Forums for Target Segments
- Definition: Targeted discussion boards, microsites, or URLs that aggregate a subset of consumers to discuss topics of interest, rate products, or share their knowledge
- Usage Scenario: A retailer wants to provide user-generated content that can engage best customers and drive search engine optimization. It also can potentially validate a site or a brand as an authority on a particular topic.
- Example Vendors, Agencies and Companies: Groupable, KickApps, Optaros, TurnTo Networks
- Estimated Cost to Implement: Various models are in consideration, including affiliate-type payments, CPM-based sponsorships, or flat fees for content or application development
9. Open Application Programming Interfaces (APIs)
- Definition: Exposed data available to build applications that may be more useful to a broader community
- Usage Scenario: A retailer wants to enable the compression of time-to-market for features that could make shopping on a site easier; it essentially represents crowd-sourced development efforts
- Example Vendors, Agencies and Companies: Mashery, Sonoa Systems
- Estimated Cost to Implement: Variable costs, primarily related to security of company databases
10. Product Sharing on Social Networks
- Definition: Links from outside social networks (e.g., product detail pages) that enable consumers to automatically share a product or URL with others in their social network
- Usage Scenario: A retailer wants to enable customers to notify others in their social network of recent transactional activity (e.g., movie tickets they bought, restaurants where they just ate, a TV they just purchased).
- Example Vendors, Agencies and Companies: Adobe Systems (Scene7), Bazaarvoice, DecisionStep, Facebook (Facebook Connect), Fluid
- Estimated Cost to Implement: Development cost of functionality and analytics time for oversight
11. Social Recommendations
- Definition: Algorithms on multi-item Web sites in which suggestions for other products are driven by what other consumers are viewing, buying, doing, or liking, either explicitly or implicitly
- Usage Scenario: A retailer wants to expose deep content to customers who may not otherwise see it, enhance the process of discovery, and increase time on site. As low as $100 per month for small businesses
- Example Vendors, Agencies and Companies: Adobe Systems (Omniture Recommendations), Aggregate Knowledge, Amadesa, Art Technology Group, Avail Intelligence, Baynote, CBS Interactive (CNET Intelligent Cross-Sell), Certona, ChoiceStream, Coremetrics (Coremetrics Intelligent Offer), Fredhopper, Loomia, MyBuys, Peerius, RichRelevance, Strands
- Estimated Cost to Implement: Is variable; can be flat fee or performance-based, with up to 10% revenue share for incremental lift; can be as low as $100 per month for small businesses
12. Social Shopping Aggregator Sites
- Definition: Shopping aggregator sites that enable users to create lists of their favorite products
- Usage Scenario: A retailer wants to allow list-makers to tag themselves. These taggers can then become mavens, who are then followed by other shoppers, which in the process exposes those new shoppers to products they may not have otherwise seen.
- Example Vendors, Agencies and Companies: Kaboodle, TheFind, ThisNext
- Estimated Cost to Implement: Cost-per-action or cost-per-click model is similar to other comparison shopping engines or affiliate programs; it typically averages a $20 to $50 cost per order.
13. User-Generated Product
- Definition: Marketplaces or retailers that enable customers to market and sell their own content or products
- Usage Scenario: A retailer wants to engage with best customers. It empowers customers to express their individuality or customize offerings to suit their preferences and provides some insight into popular configurations for merchandising purposes.
- Example Vendors, Agencies and Companies: CafePress, Etsy, skinnyCorp (Threadless)
- Estimated Cost to Implement: Variable and based on functionality rendered for no less than $25,000
14. Virtual Worlds
- Definition: Usually a screen-based environment in which avatars representing users interact with others to simulate an activity such as shopping
- Usage Scenario: A retailer wants to provide another avenue for market research and interact with others (e.g., customers, store associates) who are part of the site’s network
- Example Vendors, Agencies and Companies: Linden Research (Second Life), Nintendo, Zynga Game Network
- Estimated Cost to Implement: Significant development time with analytics and ongoing maintenance for no less than $25,000, taking into account staff developer opportunity cost
- Definition: User-generated content to power information destinations (e.g., product detail pages)
- Usage Scenario: A retailer wants to provide product-buying guides for complex purchases, which are supported by knowledgeable users.
- Example Vendors, Agencies and Companies: ShopWiki
- Estimated Cost to Implement: Primary costs are associated with curating information added to the wikis, which is often a part-time effort by a junior staff member. It should cost less than $25,000