Higher Logic Blog

If 70% of Online Communities Fail, What Does That Mean for You?

Written by Joshua Paul | May 21, 2015 at 12:50 PM

If there's one thing the Internet is chock full of, it's statistics. With a cursory amount of Googling, you can find a stat for just about anything.

Naturally, due to the ability to track so many metrics, there is a lot of data about what works and what doesn't in digital marketing and social networking.

Here's one of the most commonly referenced stats about online communities:

70% of online communities fail.

Pretty dismal sounding, right? However, like all stats that fly around the Internet, this one is worth unpacking to understand what it really means for your online community strategy and the results you can expect.

Let's go back to the beginning. The original statistic comes from this 2012 conference hosted by technology analyst firm, Gartner. Here's the specific text that led to this statistic becoming so widely quoted:

By 2014, customer fallout will drive down customer satisfaction in 70 percent of organizations that shift customer support to communities.
Many organizations are employing communities as a platform for customer support. While there are examples of organizations experiencing moderate to great success in call deflection and increased first-contact resolution (FCR) cost savings, there are also unsuccessful community deployments. These unsuccessful deployments happen when the organization thinks that if it creates community self-help sites, customers will come. Similarly, these deployments tend to be plagued by the perception that peer-to-peer communities require no administration or moderation. Enterprises should recognize and plan for the administration and moderation required to maintain a customer support community, but be ready for the community to fail.

But as with all statistics and reported data, context is everything. This research from Gartner predicts that 70% of online communities that are implemented for a specific reason (support) will fail for specific reasons. Somehow, this explanation has been translated and proliferated as, "70% of online communities fail."

Before diving too deep into what makes this statement problematic, let's investigate the historical context surrounding the usefulness of this prediction in today's time:

  • 2012 was three years ago. While three years may not seem like not that long ago, keep in mind that the world of technology and data analysis evolves on a lightning faster timeline. When you consider that the digital universe is doubling every two years, it is easy to call the use of 2012 statistics into question.

  • A lot has changed. In three short years, we have seen shifts in how customers are behaving online and how people are using online communities. For instance, companies are launching online customer communities to achieve business goals far beyond lowering support costs. These goals include identifying revenue opportunities within their customer base, bringing customers into the product development process, and identifying and nurturing customer advocates.

    We have also seen changes in how data can be mined from online communities and in the quality of online community platforms that weren't on the horizon back in 2012.

  • Prediction stats are simply that: predictions. Anytime people use data to make a prediction for the future, it's merely taking current trends and applying them over a longer period of time. It doesn't account for the unpredictable changes in online behavior, innovation, and business strategy shifts.

    The problem occurs when those predictions evolve into innovation concrete statements. In this case Gartner's research grow from "Garter predicts that for this reason, most organizations using online communities to address a specific goals, will fail" to "Gartner says that 70% of online communities fail." Notice the change?

Often, the spread of statistics like this one depends on how they are reported and presented. If you Google, "70% of online communities fail," you get a long list of other blog posts and articles siting Gartner's research.

The reasons statistics like this one get so much attention is that people love data. They love using numbers to make a point because it instantly validates their argument. Not to fault the articles that appeared in our Google search referencing this statistic, ("Why Most Online Communities Are Destined to Fail" or "Badgeville announces next generation engagement solution for internal employee and external customer communities") but they may not be presenting the complete picture.

3 Big Problems With This Online Community Statistic

It Doesn't Explain What It Means to Fail

While it certainly isn't a good thing if your online community fails or is failing, there isn't a clear-cut qualifier. For instance, if we're taking this statistic as fact, does that mean that 70% of online communities shut down? Does it mean they just aren't meeting their business and marketing objectives? Is the problem simply low engagement? And—most importantly—is the failure something definitive or is it fixable? In order to legitimize any data, you have to have a clear method for definitions for all your conclusions.

By not including a definition of failure, stating that "70% of online communities fail" doesn't give a clear picture of what the actual problem is and how it should be addressed. Instead, it suggests that online communities may be difficult to implement successfully or even a waste of time—and there are plenty of evidence illustrating that this just isn't true.

It Disregards All of the Other Data

Given how frequently this one Gartner statistic is quoted, you wouldn't think the press release included tons of other valuable information. Unfortunately, information as basic as the title of the announcement: "Gartner Says Organizations That Integrate Communities into Customer Support Can Realize Cost Reductions of Up to 50 Percent" is never mentioned alongside the failure stat.

This statistic isn't nearly as eye-catching or dramatic as "70% of online communities fail," but it could be just as important for online community managers to know.

Failure is Relative

In reality, most marketing strategies "fail" on some level. It would be wonderful if all marketing or customer communication would get 100% of your target audience do what you want them to do. But, that will never happen.

For instance, depending on the industry, the average email open rate is typically between 19 and 30 percent. That could easily be spun to mean that over 70 percent of marketing emails are ultimately failures—but that's not how email marketing is typically regarded. Instead, it's thought of as a way to directly reach around a quarter of your target audience—which is a much more positive and promising way to look at it as a marketing strategy.

The success or failure of your online community strategy directly relative to your goals and purposes for your community. While one company may consider their engagement levels a failure, you may look at your business's specific online community strategy and consider it a success. Only you can determine what will makes your online community's impact on business goals a worthwhile endeavor and what will make it a "failure."

What Does All of This Mean for Your Online Community?

If someone in your company sees this statistic and tries to use it as a reason to not launch the new private online community you've been planning, try highlighting the following two points in your response.

Some Online Communities Do Fail

There's no getting around it. Online communities don't have a 100 percent success rate. Not all online social spaces see enough activity to keep their doors open.

However, just because some online communities fail doesn't mean yours will. No two online communities have the same combination of platform, audience, value proposition. The real driver of your community's success is you and the time, content and strategy you invest in your community.

The Statistic Doesn't Actually Matter

Instead of focusing on the predicted 70% failure rate, think of this statistic as a call to action. Rather than interpreting Gartner's information as a reason not to create an online customer community, think of it as motivation to make better choices—to invest in the right platform, to hire the right people, to put the right online community management processes into place.

Ultimately, it doesn't matter how many people fail; it matters that you put the systems in place to set your community up for success.

Online Community Failings Takeaway

Statistics are incredibly helpful in understanding trends and interpreting data, but only when evaluated within the appropriate context in order to be fully understood. Thousands of successful online communities do thrive, there is no reason your organization customer or member won't be one. Companies and membership organizations are already doing it and reaping the rewards.

So, even if Gartner's statistic were an accurate representation, don't think about the 70 percent. Instead, focus on the other 30 percent. They're succeeding because they have invested in the right people, platform processes. If you do the same, your online community won't become just another meaningless statistic.