How to Calculate the ROI of Online Communities

By Richard Millington

ROI People

Calculating Total Investment Per Year

Once you have collect this data, you can estimate the total figure invested in the community thus far. For practical reasons, we strongly recommend amortizing one-time costs over the lifespan of the investment. If, for example, a typical community platform is updated every three years, you might wish to spread the cost every three years.

We have included the combined list of costs below:

Technology costs

(all hardware and software costs associated with developing and hosting the community platform)

One-time costs

  • Software license (one-off or recurring)
  • Installation and Implementation fees
  • Custom development
  • Initial platform installation/implementation fee
  • Design
Ongoing

  • Software licensing fees
  • Hosting (hardware and software)
  • Service and support fees
  • Ongoing enhancements
  • Ancillary products/web services (analytics, member management tools, communication tools)
Cost of staff One-time

  • Third-party consultants
  • Training
Ongoing

  • Community manager
  • Moderation/moderation costs
  • Legal
  • IT
  • % of time from management, etc.
  • Third-party consultants
  • Community management training
Process Costs One-time

  • Member acquisition programs/assets
  • Event costs
  • Online and offline outreach programs
  • Member incentives
Ongoing

  • Member acquisition programs/assets
  • Event costs
  • Repurposing existing assets & new content creation
  • Licensing fees for outside content
  • Online and offline outreach programs
  • Member incentives
Overheads

(% of fixed overhead costs)

Ongoing

  • Fixed overhead costs (office, equipment, insurance, depreciation, etc.)
  • Variable overhead costs (supplies, repairs, etc.)

This should provide you with a total cost of your online community effort. In this example, the combined costs of people, process, and technology.

We have provided a complete sample breakdown below for an enterprise-level community that is growing at a steady pace (click to view the full image)

screenshot-2016-08-31-12-05-28

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