How to Calculate the ROI of Online Communities

By Richard Millington

ROI People

Calculating the Profit Generated By Community

The difference between the return and profit is obvious; one includes costs and the other doesn’t. Far too often, community professionals ignore the costs of community when explaining the profit a community has generated.

Once we know the return, we simply need to subtract the investment by year to get a profit. This means we need to calculate the investment by year. This should be updated at least on an annual basis. Once we have these figures, we can easily determine the profit generated by the community by year, as shown below.

screenshot-2016-08-08-19-19-28

Here, we can see the profit for the first year is $99,857. However, don’t confuse profit with the return on investment.

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