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4 Tips For Measuring Community ROI

Measuring Community ROI

A community can do so much for a brand. It can help provide insights on what consumers like about a product or service—and what they don’t care for. It can open a direct channel of communication with your most loyal customers. It can even give you ideas on what products to introduce next.

Yes, it can do all of those things. Yet, has anyone actually measured the value of a community?

Turns out that while 92% of community leaders believe their online communities have an impact on the business, 35% lack meaningful metrics to report success in business terms[i].

If you’re not measuring the value of your community, you need to start. Even if you feel the community is adding value, there may come a day when you have to produce hard evidence that it actually is providing a return on investment.

So, what can be done about this conundrum? What are the best ways to measure the value of your community? Here are four tips:

1. Align it with business goals: When you assign KPIs (key performance indicators) at the beginning, it’s much easier to measure how the community is doing in real numbers. These should be in place when you launch, although Leader Networks recently conducted research that showed many organizations don’t begin to measure the value of a community until year 5.

Don’t wait. If you put the parameters in place, in the beginning, the community will show its value much sooner. For example, you could track how many sales inquiries come in as a result of the community, or how many support issues were handled through the community versus other channels.

2. Determine what the community is costing you—and saving you: Do you know what your community costs, as in how much you’re spending to run it? Does the community save you money? How do you track this?

25% of marketing and community leaders report that they don’t know or don’t track their community expenses in total[ii].

When we talk about costs, this includes staff, content, and software. You may think it’s cost-effective, but how will you know for sure if you don’t measure?  If you know how much you’re spending on your community and how much it’s saving you, that will go a long way in determining its value. Is it helping you reduce expenditures on customer retention, employee training, customer support or marketing, for example? If so, that should be factored in.

3. Connect member data to customer data: Many communities provide a competitive advantage by increasing customer satisfaction and helping brands retain customers. But, you won’t know this unless you connect the member data to customer data by integrating your community platform with your other customer-focused platforms.

4. Measure revenue generation: Is your community providing a revenue stream? Communities can generate revenue by allowing members to buy directly from the site or by generating partnership and sponsorship dollars. It can also generate revenue indirectly through customer retention and satisfaction.

There’s no doubt that a well-managed community can add to a company’s bottom line. But if you don’t measure, how will you know?


[i] http://customerthink.com/hidden-in-plain-sight-why-some-online-communities-make-more-money/

[ii] file:///C:/Users/Michelle/Downloads/The-Business-Impact-of-Online-Communities_Leader-Networks.pdf 

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