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Reaping ROI from Online Communities

Lithium Alumni (Retired)

Measured Currency by Brooks ElliottWe had some recent interest on ROI for support communities in the Lithosphere community private boards, and I blogged about some useful resources for ROI in my last post. We also just posted a great new white paper on the topic, produced in collaboration with FT Works: Gold In Them Hills: Computing ROI for Support Communities White Paper. ROI is certainly on the forefront of everyone's mind on these uncertain economic times.

 

So whether you are just starting to look at ROI, or if you are looking for more ways you can show the value of your community to your organization, I thought I'd post a quick rundown of different ways to compute community ROI:

 

Sales & Marketing

  • Increased sales by community members resulting from increased product sales for community members can often be measured if you have analytics tools integrated across both your e-commerce and community sites.
  • Increased sales through recommendations can be measured when consumers visit recommendations in the community before they make a purchase.
  • Improved brand affinity/customer satisfaction can be measured through embedding community participation questions in your existing surveys. Then apply this to areas where customer satisfaction and loyalty play a part, such as lower churn/customer retention.

 

Support

  • Call deflection is still the primary means of measuring ROI in support communities. Measure both the direct deflection (number of questions answered) and indirect deflection (number of times answer was viewed) against the cost of a support call to get the full ROI. This single calculation alone can be staggering.
  • Increased agent productivity since agents can leverage the customer community as a knowledge base substitute or add-on, which you can measure in decrease in call handle time or escalation avoidance.
  • Decreased support agent costs via faster ramp-up time, utilizing less skilled agents, lower facility costs of home agents and lower turnover. Measure the savings of each on a per headcount cost basis.
  • Strategic savings across areas like support for multilingual products, long-tail support, business continuity and spike handling, or a delay in strategic expenditures and investments. Specifically, measure what you can avoid or delay spending on by using a community to address these issues.
  • Better analytics through emergent issue identification and product feedback. Measure the number of issues resolved and the costs saved by discovery.


Product Development

  • Product feedback is not easy or cheap to come by using more traditional methods like surveys and focus groups. Measure the costs saved by using a community for these activities instead.
  • Product adoption rate can difficult to track in some cases, but you if you can see an increase in adoption by community members you can compute the increased revenue by product price.

 

Much of what is listed above is discussed in the whitepaper which also includes many specific calculations you can use and rationales behind each, so be sure to check it out if you want more detail. Support communities comprise the main focus of the paper, but you'll find community rarely stays in neat little buckets. So why ignore all the other benefits your community has to offer?

 

Have you implemented any of the above methods to calculate ROI for your community? Let me know, or post your own ROI calculation in the comments. And be sure to point out which ones had the biggest impact to your organization!

 

 

photo by Brooks Elliott

 

Edited to fix link.

Message Edited by ScottD on 10-26-2008 05:00 PM
About the Author
Scott is a Client Services Engagement Manager at Lithium and the Community Manager for the Lithosphere community. In this role he helps enterprise organizations using social media to locate and engage their brand advocates and influencers to address real business challenges.
1 Comment
Lithium Alumni (Retired)

Do we have a defacto standard for calcualting ROI from support communities? I.e. 1 phone call = X pounds and 1 phone call = X Accepted Solutions?

 

Do we have more data on this? I know SCEE is keen to learn more.