Many companies benefit from developing communities, but a greater number wont.
They don’t have the resources to develop a community, nor sell a product/service that’s worth building a community around.
A few simply wouldn’t be able to gain a positive ROI if they did.
I worry people mix the 19% increase in purchases figure here with a 19% ROI. We can all agree there is a big difference.
If members purchase 19% more of the product/service, and your service costs $5 a year, that’s an extra $0.95 per participating member. A community with 33,000 active members would bring in $31,350.
This wouldn’t cover a community manager’s salary, let alone the platform expense, overheads, and other opportunity costs. Worse still, 33,000 active members isnt easy. It’s going to take a few years.
However if your products/service costs $1000 per year, an extra $190 per active member, per year really adds up. A community with 33,000 active members now brings in $6.27m per year. Even with 1,000 active members it’s worth doing.
That 19% figure (one of many) isn’t the starting whistle for all companies to develop communities, it’s a warning. If your feasible audience size multiplied by the service/product fee wouldn’t generate a positive ROI, don’t develop a community.
So let’s be optimistic about communities, but not overly so. That helps nobody.
