How to Calculate the ROI of Online Communities

By Richard Millington

ROI People

Member advocacy will typically come in one of two forms: online mentions via social media channels (Facebook, Twitter, Instagram, Snapchat, etc.) or recommendations to friends and acquaintances offline.

It is extremely difficult to quantify member advocacy to a dollar value. How much would an organization place upon each mention of the brand on social channels? How would the organization determine if those mentioned derived from members in the community? How would the organization attribute those mentions to the community and not simply a pre-existing love of the brand?

One method is to ask new customers how they heard about the organization/product and track mentions of word of mouth against other channels. Another would be to determine the level of advocacy before members joined a community (number of times the organization mentioned the brand online), the number of times after, the average total reach of those mentions and assign a value to that reach. However, this becomes an unwieldy and wildly inaccurate practice.

The most common proxy metric for member advocacy is the Net Promoter Score (NPS). Net Promoter Score can be calculated in a similar fashion to customer satisfaction score. However, like customer satisfaction score, it is not easy to convert NPS into a clear dollar value. We have not included member advocacy within the dollar value today




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