How to Calculate the ROI of Online Communities

By Richard Millington

Chapter 16.3  LinkedIn  Google Plus
ROI People

Here is a common story. You’re hired to run a community from either a different department or from a different company entirely. In the recruitment process, your boss tells you how important the community is to their business and how much they value the community. You feel a valued member of the team working on a critical project to the organization. Your boss frequently comes by your desk to see how things are going.

Six months later, you notice your boss’ enthusiasm has waned. She spends less time talking to you and asking you questions about the community. Communication from the executive team goes quiet. Then you receive emails asking for the latest community metrics from your boss.

By this point, it’s usually too late to turn things around. Once an attitude has been formed, or an opinion has been expressed, it is very difficult to change it. We came across many variations of this story in our research. Community managers who had not been invited to a meeting, or even asked for metrics, were abruptly let go or had their budgets cut with little warning. There were usually signs, but you had to spot them.

This is a problem for community professionals who do not send through evidence of the community’s value until it is requested.

Evidence is only sought when the value of community is in doubt. Once this attitude has been formed (or an opinion to this effect expressed), it will be very different to change.

You need to establish the value of community proactively and consistently with each key stakeholder. You cannot afford to wait for the value to be questioned before you begin trying to prove it. Don’t assume that a monthly metrics report is enough to prove value. You have to be more proactive than this. There are three major methods to communicate value:

  1. Regular updates. Regular updates are sent through to relevant stakeholders at anticipated intervals. These updates are weekly, monthly, biannual, or annual. Communicating progress or value at regular intervals is an ineffective approach to increasing perceived value. When we anticipate an update, it has less impact. Many stakeholders receive a variety of updates from other departments at the same time. When updates are expected, the power of updates is diminished. Stakeholders might ask for regular updates. Therefore, consider this the minimum you need to do in order to establish value. Regular updates at anticipated, frequent intervals are not effective at establishing stakeholder value.
  2. Irregular updates. The opposite of regular updates are irregular updates. These are updates at infrequent intervals. Irregular updates are driven by supply, not demand (e.g. there are important updates to share). Infrequent updates are unexpected and thus typically have a bigger impact. They can include a combination of contextual information, trends, or stories. Irregular updates are unanticipated and therefore usually have a bigger impact. However, there is a finite number of irregular updates that can be sent before they become anticipated or ignored by the recipient.
  3. Milestone updates. The most powerful method of communicating value is through irregular (but not infrequent) milestone updates. This creates the perception of growing momentum and associates the community with a strong value created. Each milestone can be bigger than the last. There is an infinite number of possible milestones the community can help achieve. This might be reaching a certain level of membership, a highly positive story from a member, hitting comparative goal (e.g. half or as many calls deflected through the community as via traditional methods), or anything else which may be relevant.

The critical lesson here is not to wait to be asked for the value of the community, but to proactively establish value through irregular (but not infrequent) milestone updates that might combine data with context, trends, or relevant stories).

Which updates to use for which stakeholders?

Stakeholder Type Type of update
“Engaged” Major milestone updates + irregular updates + regular updates
“Keep satisfied” Major milestone updates that support positive opinion
“Keep informed” Irregular updates
“Monitor” N/A

Stakeholders who need to be engaged (high influence, high interest) need to be regularly engaged in the project. This combines regular expected updates with latest news and progress with irregular updates featuring milestones and relevant success (along with opinion-seeking questions).

Stakeholders who need to be kept satisfied (high influence, low interest) need to receive major milestone updates which ensures the community maintains a positive association with success. These should be kept rare and highly impactful.

Stakeholders who need to be kept informed (low influence, high interest) need irregular updates when there is relevant success to report.

Now we know who our stakeholders are, what they want, how to deliver information and when to deliver information. The only step missing is who should communicate information. This answer might not be what you’re expecting.

Summary

  1. Regular anticipated updates are usually ignored or difficult to recall. Do not try to communicate value this way. This is the minimum you need to do.
  2. Irregular updates are good for highlighting relevant new context information, trends, or emotive stories to share.
  3. Milestone updates highlight major successes and are useful in creating positive perceptions.
  4. Send engaged stakeholders regular, irregular, and milestone updates.
  5. Send keep-satisfied stakeholder milestone updates.
  6. Send keep-informed stakeholders irregular updates.

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