The ROI of Better Community Management

How to Capture the Real Value You’re Missing

Return. On. Investment.

Three simple words that are often the cause of a huge amount of confusion and angst when it comes to measuring the value of a community. When an organisation has invested a good chunk of the budget in a platform, recruited a community manager or team, trained the team and resourced for some ongoing design and development time it’s important to understand what that investment means and why it is worthwhile to the business.

Too often however, an obsession with headline metrics (number of members, posts per day, etc) from senior stakeholders are the root cause of this problem, sometimes referred to as “vanity metrics”.

When considering the true worth of a community, it’s important to build a complete picture of how that investment can benefit the company across all departments and in tertiary areas that might not have initially been considered.

The Fallacy of Vanity

Vanity metrics are the metrics most stakeholders are familiar and comfortable with when it comes to community. They are easy to capture through analytics into a dashboard and, on the surface, seem like a very smart and logical way to gauge the return on investment (ROI) of your social space.

Taken in isolation, vanity metrics can paint a very boolean picture of a community. Membership sign ups this week are either on track or off track, posting numbers today are either increasing or decreasing. These forms of measurement are, of course, still an important part of your return on investment portfolio but they often paint an incomplete picture that doesn’t provide true context and subtlety. Let’s take an example:

Harry Hounds Pet Store has had a successful few years trading and from customer feedback believes a community would be a good investment for customers.

They invest a significant amount of yearly budget in a platform, recruit and train a community manager and ensure there’s enough technical resource to support.

Senior stakeholders agree that ROI will be proven successful if membership increases month on month by 5%, daily posting contributions increase week on week by 3% and active traffic on the community is over 500 people daily.

Initially things look good – a big marketing push brings an influx of people to the community and the metrics are exceeding expectations.

However, after the 6 month review, it’s clear the metrics are plateauing and on some days falling short of expectation.
Has the community failed and was the investment wasted?

The Full Picture

It’s natural for an organisation to panic when these sorts of metrics stagnate. Yet, it’s a common occurrence in a community as it matures and nothing that should cause initial concern. The key question an organisation should be asking itself is whether the community is delivering value in other areas and benefiting the company as a whole.

To start with, look at the quality of the content that is being created by members. Are they solving problems? Are they sharing incredible stories and building a culture for your brand that makes other members happy?

Ultimately, are they contributing to the wider reputation of your brand that is offering benefit to other departments? Let’s look at some examples of how return on investment can be seen across the board.

Customer Service

Not just the community team, but your customer service channels are able to learn from some of the feedback provided in the community and improve their responses and flow. They might be instrumental in building a highly effective Q&A on the community to direct people to, reducing time and costs.

Marketing

The community can provide a wealth of material that can be used as case studies, marketing insights, stories and help guide marketing strategy. The community is telling you what is important to them and people like them.

Legal

If you have a legal team, the community can alert you to potential problems with products, or indeed changes in legislation or policy that can help you become proactive in safeguarding your organisation

Events

The community provides the opportunity to run local events to connect people, improving positive sentiment toward your brand and fostering a true sense of belonging. Perhaps a pet walking club emerges from isolated members who have met on the community and now benefit from the social aspect.

Product Development

Community feedback is often instant and honest. The community value in suggesting new products or services, then testing and evaluating them for you us high with minimal outlay.

Referral and Word of Mouth

Community members treated well become some of the best brand ambassadors. Community members will (and should be encouraged) to invite friends, family and colleagues who might be interested in your services. Personal referrals are one of the most cost effective ways of securing new business and growing brand awareness.

Summary

Always ask what does more traffic, members and posts equal? Growth is good, but growth for growth’s sake when those on your community aren’t making high quality contributions or are being ignored while resources are deployed in search of vanity metrics is doomed to fail.

Ensure you evaluate community ROI as part of a full-spectrum picture, focusing on how true value across all departments can improve brand awareness and reputation.