Guide to Customer Community Software Pricing

Now that you're considering implementing a customer community, it's crucial to understand the associated expenses. These typically comprise of the software expenses, migration costs (if applicable), and implementation expenses. 

1. Software Cost: This refers to the expenses associated with acquiring the software itself. 
2. Migration Cost: If you are migrating from an existing platform or another system, there may be costs associated with transferring data, content, and configurations to the new platform. 
3. Implementation Cost: Implementation costs cover the expenses incurred during the configuration and setup of the customer community. 

Today, we will focus on the software cost of a customer community and explore the pricing models commonly used by software vendors in this domain. Additionally, we will provide insights on how to effectively collaborate with software vendors to navigate the pricing aspects of your customer community platform.

Pricing Models Used by Customer Community Software Vendors

When it comes to pricing models for customer community software, there is no standardized approach like we see in the modern intranet market pricing. In the case of customer communities, several models are utilized by vendors, including:

User Count: Some vendors adopt a user count model, which can be categorized into two variations. The first considers the total number of registered users, while the second counts the total number of logins within a month. This model is popular due to its simplicity and transparency, allowing clients to easily anticipate their current and future growth costs. Typically, vendors offer tiered pricing based on user counts, meaning that higher user volumes result in lower prices per user.

Page Views: Certain customer community platforms utilize a page-view count as a pricing metric. This encompasses various activities such as:

• Human clicks
• Search engine indexing of public community pages
• Authorized API calls for integrations
• RSS feeds that leverage public areas of the community 

However, this model can pose challenges for customers in understanding their growth and managing page views from sources that do not contribute to their business value. Examples include irrelevant searches or RSS and bot activities that do not benefit the client. Page-view pricing is typically structured into tiers based on the number of page views consumed. ‍

‍Pro tip: We recommend asking your software vendor to define what they consider page views. 

Feature Modules: While not typically the primary pricing model, some vendors offer the option to pay based on the specific platform modules utilized. This can be an additional fee on top of one of the aforementioned approaches. In other words, clients may pay a base price based on the number of users and incur extra charges based on the specific modules they choose to leverage.

Each pricing model has its own advantages and considerations, and selecting the most appropriate one depends on the specific needs and preferences of your customer community.

How Should You Work With Software Vendors When It Comes To Price?

When engaging with software vendors regarding pricing, it's crucial to gather comprehensive information and clarify the costs specific to your situation. Due to the varying pricing models, each with its own intricacies, you need a solid understanding of the rules and contingencies related to community size fluctuations.

To ensure transparency and make informed decisions, we recommend asking the following questions:

1. How does the contract address exceeding the tier limit in a given month or year? Inquire about any penalties or potential consequences for surpassing the designated tier.
2. Is the tier measured based on the average community size? Determine the time frame considered for averaging, such as 3, 6, or 12 months.
3. When you exceed the tier, are you charged a penalty or automatically moved to the next tier? Understand the financial implications of crossing tier boundaries.
4. Can additional tiers be negotiated and included in the contract to effectively manage future growth and associated costs? This enables flexibility to accommodate changes in your community size over time.

It is common for contracts with software vendors to span three years, but shorter-term options, like one-year contracts, may be available at a premium price that is typically around 25% higher.

Working with your software vendor, you will enter into the appropriate tier based on a thorough analysis of your existing community. 

Pricing For Your Customer Community

Our partnership agreements do not allow us to go into details, but here are some basic ranges and expectations on price. 

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Which Software Vendors Are We Talking About?

We specialize in community platforms designed for large and complex companies on a global scale. However, these software vendors also cater to the needs of small and medium-sized companies seeking top-tier platforms.

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It's important to note that there are many software options available in the market that cater to smaller companies looking for quick setup, basic functionality, and low cost solutions without long-term commitments. While these quick set-up solutions fall outside the scope of our expertise and services, they may be suitable for those with basic requirements.  

Contact us to learn how Social Edge Consulting can assist you in selecting a customer community so you can more deeply engage with your customers.

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