The Biggest Secret of Running a Successful Online Panel Company

….and it is very simple – ‘just maintain the demand & supply cycle. It means that in order to create a successful and awesome online panel company you should be able to maintain a balance between the supply of online panels and the demand for it. Unfortunately many business owners operating in the industry are unaware of a simple fact – respondents are perishable goods! After recruiting a respondent on your panel if you don’t feed enough surveys to them – they will simply unsubscribe or stop responding. This article illustrate how to strike a balance between demand and supply.

Let me explain the biggest challenge an online panel company faces – you as a business owner spend considerable amount of money to recruit/acquire respondents on to your panel.

But unfortunately you don’t have enough surveys to provide and before you realize the respondents who have registered in the hope of receiving surveys will get disenchanted and will silently unsubscribe (i.e. will stop responding although they have not officially clicked on the unsubscribe button) in mass.

The result is horrible – you lose money and have a highly unresponsive panel base.

Suppose you spend USD 2 per respondent acquisition cost – that means in order to build a 10,000 member strong panel you have shelved USD 20,000.

During panel recruitment exercise in a good scenario and the type of respondent that is being recruited – average double opt-in rate is 75%-85%.

If you are using banner ad method for panel recruitment generally the ad network will charge you per registration and not per double opted-in. So you see even before you have actually started you have lost 15%-25% respondents who have not double opted-in (although they have registered on your sign up form) – this simply means a loss of USD 3000 – USD 5000.

Although many online panel companies do send survey invites to these single opted-in respondents (as they have their email IDs and permission to receive surveys) but it is very doubtful that such respondents will be responsive enough to create a viable and vibrant panel community.

After sending first live survey it has been observed that about 5% respondents become inactive – this maybe primarily due to the reason that some respondents were really enamored by your recruitment gift offer but have lost interest for the regular survey incentives. Also the loss of interest may be due to the one off excitement for earning  a quick gift subsides after some time and respondent is not interested in further engagements.

Nevertheless for a business owner it means a loss of around USD 1000.

So in a scenario where you have spent USD 20,000 there is a high chance that before you actually start making real money you have already lost USD 4000 – USD 6000!

This does not looks like a profitable business venture – especially if you take into consideration monthly unsubscribe rate and gradually deprecatory panel response rate.

But as I said earlier the biggest challenge is – what if for next 2 months you are unable to provide sufficient surveys to this group of 10,000 recruited fresh panel members.

Probably you will end up burning up all your USD 20,000 investment.

Very scary situation!

A smart business owner will ensure that they have sufficient surveys in the sales funnel to ensure active panel community.

How to do that?

Very Simple!

On an average a typical survey project requires 300 completes and if you take average cost per interview of USD 5 – every survey project will help you earn USD 1500.

(For calculation purposes I have taken a rough estimate)

Now in order to recover respondent recruitment cost you will need to win about 13-14 projects (USD 20,000 / USD 1500).

As fresh respondents tend to lose interest within 1 month of not receiving surveys – therefore it is imperative to ensure that your sales funnel has at least 13-14 projects ready to be served to these respondents.

If your RFP conversion rate is 10% (which is sort of industry standard) you will need to roughly bid for at least 130-140 projects.

If your average client servicing executive is able to bring in about 5 new projects per week (i.e. 1 new bid every working day) – in a month he would have bid for at least 20 projects.

So to get 130-140 projects you will require a team of  6-7 client servicing executives.

Let us summarize our findings:

To build a panel 10,000 members if you need USD 20,000

You will be required to win 13-14 projects in the first month.

You will be required to bid for at least 130-140 projects.

You will need about 6-7 member client servicing team.

Please note I have taken approximate figures based on my working experience of building and selling online panels. But in most situations the estimations will hold true.

So in order to run a successful and awesome online panel company you must ensure that you have sufficient surveys for your panel community.

Well I guess it is no more a secret now!

If you want to know more or have a specific query just mail me at editor@onlinemr.com – I will try my best to respond back – My endeavor is to help make our online panel industry better!

Akshay Kanyal

Akshay Kanyal

Akshay Kanyal writes survey research reviews on his popular blog Online MR. He’s an avid blogger, brand consultant and a content marketing expert, helping business owners to craft content that sells.

He provides content marketing advice to start-ups and innovation driven companies. He can be contacted at editor@onlinemr.com

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