How topcoder Retains 82% of its Clients for Future Crowdsourcing Projects

July 8, 2014 Ben Kerschberg


A Five-Part Series — Part Three 

Customer retention is no easy feat. Some companies fail miserably, ignoring the benefits of loyal customers. Others, such as Amazon, under the prescient-yet-iron fist of Jeff Bezos, from the start elevated customer service to its top priority without regard to either the company’s bottom line or employee retention. This resulted in severe criticism from Wall Street analysts during the Internet Bubble. Bezos would not budge and constantly innovated how easily customers could purchase goods (“everything except aircraft carriers,” he said), including new features such as free shipping and Amazon Prime. See Brad Stone, The Everything Store (Little Brown 2013).

So how does Topcoder retain 82% of its customers for future projects? How do we effectively guarantee a level of customer satisfaction that results in such a high figure? Here are a few ways.

1.     Clients praise Topcoder’s rigorous evaluation (including peer review) of contest entries and documentation as setting industry standards.

2.     Clients pay a fraction of what they would to an IT consulting firm or to individual contractors. Clients report that Topcoder charges approximately one-half (½) the fee of a tier one consulting firm, and with better results.

3.     Topcoder is fast. With dedicated developers competing for prizes and ratings, solutions are often submitted three times faster than any other software development shops. This is also true for back-end bug races and systems checks. The Topcoder community is highly dedicated to deliver bug-free code and does so with between 5-8 times the success rate of internally developed projects.

4.     Topcoder granularizes its customers’ challenges. There are two reasons for this. The first is to preserve the client’s anonymity. By breaking a project into highly granular pieces, members of the community are unable to discern the client’s identity. Only after all of the project’s contests are finalized does Topcoder privately re-aggregate them to form a whole result known only to the client and Topcoder.

Granularization serves another indispensable purpose. Granular, atomized subsets of the overall challenge result in better ideas on the order of extreme value outcomes – results far exceeding expectation, and often contributed by unlikely community contestants who approach granular challenges in novel ways. In addition, community members self-select to compete in those granular contests the subject of which will lend comparative advantages over their competition.

5.     Clients find especially appealing Topcoder’s ability to supply them a flexible software development environment. With its cloud-based development structure on Amazon Web Services’ secure platform (99.999% uptime), Topcoder can scale projects quickly and easily, and with only marginal price differences. It can also take advantage of a highly distributed expert community whose distances are irrelevant to development in the cloud.

How substantial are the benefits of customer satisfaction?  Former Harvard Medical School CIO John Hamalka states: “I look at Topcoder and I see Nirvana.”

If you haven’t already done so, please check out the first two pieces of this 5-part series. Enjoy.

5 Reasons Why Topcoder is the World’s Best Crowdsourcing Partner (June 23, 2014)


Understanding The Crowdsourcing Community (June 30, 2014).



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