How to Calculate the ROI of Online Communities

By Richard Millington

ROI People

Calculating the Return Generated By Community

Phew, you made it this far. At this stage, 99% of the work is complete. By far the most difficult challenge is collecting the data you need to make the calculations. Once you have the data, the calculations are really simple.

The return on investment is the profit (return-investment) divided by the investment. This is a profitability ratio expressed as a percentage, not a dollar value figure.

One important lesson is that it is important to break the community down by year and not just the overall amount since the community was created. This highlights whether the community going forward is likely to continue to generate a positive return on investment.

Community ROI Template

You can follow this in this spreadsheet (first page) or simply follow the process below.

A single online community is likely to yield a multitude of benefits to the organization.

It would be a mistake to calculate the return of only one benefit. Instead, we would wish to identify the several possible benefits a community might yield and calculate the return of each of these. The sum of these benefits is the total return generated by the community.

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The total return generated by the community is $5,149,559. However, the figures per year are more important going forward. These show a steady increase which might highlight increasing profitability. To see if this is true, we need to know the investment in the community.

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