Members Did {X} More Than Non-Members

May 3, 2016 1 Comment

Of course they did, your members are your best customers.

If you tell your customers to join a community, those that know and like you best will dominate membership.

If you then compare the spending of community members against non-members you shouldn’t be surprised to discover that members spend more than non-members.

That’s not the ROI of the community, that’s a comparison of your best customers against the rest.

This mistaken formula handily guarantees every community shows a positive ROI, but it’s damaging when exposed.

It’s not whether members do {x} more than non-members that matters. It’s whether that metric’s increased more than non-members since joining the community.

If the average spending of members increased by $50 and non-members by $20 since joining the community, that’s $30 per member which might be attributable to the community.

Multiply this by the number of active members and you might have something.

Not a bullet-proof formula but far more defensible than comparing your best customers with the rest.

Comments

  1. Suzi Nelson says:

    Never thought of this! Thanks for sharing, Richard.

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