According to the new Business Impact of Online Communities Study by Leader Networks, which surveyed hundreds of communities, about 35 percent of community leaders surveyed said they lack meaningful metrics to report success in business terms. That’s a sizeable number.
While we may not do a great job of tracking our community’s competitive advantage and revenue/cost savings right now, one thing is clear: communities have impact. Nearly all – 92 percent – of marketing and community leaders surveyed reported that their community has an impact on the organization. And 25 percent says it’s a large impact.
We have to agree with the report’s key takeaway: it’s time to improve how we’re measuring community performance.
Download The Business Impact of Online Communities Study here.
How community numbers can help us with competitive advantage
Most online communities struggle to balance quantitative and qualitative data. But the new study found we’re also not lining up ultimate goals with how we define competitive advantage. Are we actually measuring what’s most valuable for our organization?
Apparently, not quite. Most respondents said their competitive advantage was customer retention (57 percent) or customer intimacy (48 percent). But those same respondents listed tracking success measures that don’t line up with their defined competitive advantage.
We need to track our expenses
The study found 25 percent – one in four – of marketing and community leaders don’t track or even know what their total community expenses are.
Why aren't we investing more?
The data suggests organizations that spend less than $200K either under-staff their communities, don’t invest in software, don’t account for internal “charge backs” such as IT labor, or rely mainly on community generated content.
Is anyone making money from their online community?
The answer is yes - and it’s fairly significant:
[T]here is a strong showing of respondents (36%) who report that communities influence revenue via customer retention and satisfaction – which is how the majority of marketing and community leaders define competitive advantage.
These findings become even more interesting when we looked at them over time: 55% of communities five years or older generate or influence more than $1M, while 43% of communities that have existed for two years or less generate or influence less than $10,000. Clearly, like a fine wine, community success takes time. (Pg. 17, The Business Impact of Online Communities Study)
With the potential to increase revenue and the data to prove we should invest in community, what are the next steps?
Leader Networks' Community Impact Framework
This is where the study really shines: the new Community Impact Framework offers seven sections of community-focused metrics with examples, from tactical to strategic. As the study purports, “a metric (of any kind) must be aligned with and in support of a business goal to be meaningful.”
Taking it one step further, the study also offers 11 actions to help you link community to competitive advantage. Advice includes getting financials in order, reviewing expenditures, chatting with content creators to refocus efforts, and collaborating with your support team. This brings the new data full circle, because we’re given new data analysis, a new framework to benchmark our performance, and then a new “to-do” list for any community to get started. It’s a tracking trifecta that’s desperately needed in the community industry.