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Before You Do Anything Else With Your Community, Do This

Written by Lindsay Starke | on June 30, 2015 at 3:52 PM

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I have a quick question for you: what’s the ROI of your community?

Generally, when I speak with other community managers, they have one of three responses to this question:

  1. Uh…what?
  2. Engagement!
  3. An actual demonstration of return on investment

The discipline of community management has advanced enough within the past few years that this question doesn’t spark quite as many confused looks as it used to, and I am less and less likely to hear “what do you mean by ROI?” These days, you’ll often hear “what’s the ROI of your grandmother?” as a retort, underlining that special, ineffable magic of community that can’t be quantified. Or perhaps they will say “engagement,” as if that’s a magic buzzword that answers all questions. This may or may not be accompanied by a big grin and jazz hands.

Group #3, on the other hand, tends to be the smallest of all. Community managers are connectors; we are so set on relationship building and experience improvement that we can sometimes lose sight of what is meaningful for the organization as a whole. And the truth is: member or customer engagement doesn’t help you keep the lights on and make payroll. But engagement can contribute to what does: retaining members or customers; acquiring new members or customers; increasing member or customer spend; reducing costs; etc. It just takes a little work.

First up, let’s talk retention. Communities can be awesome to help grow retention, and here’s how to prove it. Start with a group of members. If you’re a smaller organization, you may be able to use your entire membership. Otherwise, you should segment out a broad group with nothing in common; for example, a random selection of a few hundred members. The randomness and diversity is important; just like a scientific study, you don’t want your subjects to skew your results. Decide on a period of time that you will be following this group—through an entire year’s membership cycle is the obvious one.

Next, track these people and their level of activity in your community. Have they logged in to the site? Have they agreed to terms? Have they uploaded a profile picture or a bio? Have they posted to a discussion? Have they subscribed to certain communities? The more metrics you track, the more reports you’ll need to run, but the more data you’ll have to work with.

At the end of that membership cycle (or whatever period of time you select), you take this same group of people and look to see if they have renewed their membership or left the organization either actively (canceled) or passively (dropped). Then, compare the groups. You will most likely find that the more engaged a member is, the more likely he or she is to renew. You can also track a member’s engagement with or spend on the other products and services you provide (continuing education, certification programs, etc.) Again, you may discover a relationship between how an individual interacts with your online community and how they interact with the rest of your organization.

Speaking of spend on products and services, advertising isn't a bad option, either. Check out some examples here.

At this point, a small handful of you will be waving your hands in the air at me. “Yo, Starke! Don’t you know that correlation does not equal causation?!” And yes, that’s absolutely true. It is difficult to demonstrate whether the community caused members to be more engaged, or whether already engaged members are more likely to also be engaged with the community. The first one of you who runs an A/B test on your online community will be an instant celebrity in our little sphere (and I will buy you a drink at Super Forum). But in the meantime, this works pretty dang well, and it’s a lot more valuable than going to your C-levels with a printout of how many posts you had last month.

Now, take this same principle and apply it to other community goals. Are you spending too much on customer service and want to empower your users to help one another? Track your spend before the community, at community launch, and at community maturity. Have your costs gone down? It might be that community is deflecting those time- and money-intensive support cases! You can do the same thing for acquisition: how many joins or purchases have you had from people who visited your community versus those who visited your website overall? Is there a correlation? Fantastic! (For help in tracking community visits, check out our previous users group post on using Google Tag Manager).

Engagement is crucial. There are benefits to community engagement that will always defy measurement: the touching stories, the lasting relationships, the insights you can’t get anywhere else. But once you begin to see engagement as a health metric, as a means to an end (ROI) rather than an end in and of itself, you are buying yourself and your community a place at the table. It’s not calculus. All you have to do is compare one data set to another. I promise, you can do it.

Topics: Community Management

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