If you need help calculating the ROI of a community, there are tons of resources that can provide processes and best practices, but where can you find ROI in the first place? Where should community evangelists look, and where will ROI be easiest to prove?
There’s constant discussion about ROI and senior leadership wanting to see the numbers, and they want a hard number that will determine the success of a community platform. It’s tough for community evangelists because it’s not always that simple. Sometimes the ROI is negative the first year it’s active and that might deter senior leadership away. Sometimes the process of calculating ROI is besmirched by extra unnecessary data, resulting in an inaccurate forecast.
Support Communities and the Power of Millennials
The easiest place to find positive ROI in communities is to examine its uses in support and the connection it has with the Millennial generation.
Today's consumer expects things to be available to them 24/7, they can create anything on their own, and they know how to research solutions to their problems. The consumer could also care less about brand -- perform any kind of Google search on how consumers feel about brand and you'll see the results. Consumers aren't particularly attached to any specific brands, but they do care about how others perceive brand.
With this in mind, a support community makes sense: imagine the last time you searched online to figure out why your iPhone was acting funny, or if your car was supposed to make that certain sound. You were probably taken to a support community, and you probably found someone who had the exact same problem you did along with user comments offering suggestions on how to fix it.
Without that online community, the website would have told you to chat with a live representative or call a support line -- in which case you would have had to wait for someone to talk to you and help you solve your problem. If support isn't available 24/7, you have to turn to other resources, and not all of them are reliable. Live representatives, though intrinsically valuable, are expensive. Keeping a support team around 24/7 to cater to the fast-paced consumer could be a costly feat -- hence having a support community.
The way Millennials perceive brand and social is even more interesting. “When looking for opinions about products to buy, Millennials are more than three times as likely than Boomers (22% vs. 7%) to turn to social channels” according to research conducted by Bazaarvoice, et al.
Millennials hardly make purchase decisions without first gaining advice or insights on the product from their peers -- and in some cases, a stranger's review is even more valuable. Where do they get the advice, reviews and insights they need to make decisions? They turn to social, and the organizations that are using it well will be able to better adapt to the paradigm shift.
Product and Technology Industries
Every industry in the world probably doesn’t need a community, but in searching for ROI, one can definitely find it in product and technology industries. If an organization sells, manufactures, tests, promotes, grades, reviews or even teaches a product, they would absolutely benefit from a community -- be it internally or client-facing.
Because consumers are constantly consuming information, visiting a product community and getting the information they need before they buy is the difference between visiting the product's website, not getting the information they want and then leaving without buying anything.
Return on investment can also easily be found in technology industries -- in fact, it's kind of hard to find a technology company that doesn't have a community. Technology breaks, and when it does, it's unexpected, elusive and highly inconvenient. Providing instant solutions to a consumer's problem is what's going to make or break the brand/consumer relationship -- and the solutions don't necessarily have to be provided by the organization.
The Risk of Not Implementing a Community
Although it's not technically an ROI measurement, examining the risks associated with not implementing a community is still a valid facet of the ROI calculation.
For example, if your organization has a community -- be it for social reasons, support, reviews, etc. -- but your immediate competition does not, your organization's community becomes a competitive advantage. Conversely, imagine if your organization did not have a community, but your competition did.
Communities are considered the new normal -- so what happens when an organization doesn't have one?
Overall, community evangelists can usually find positive ROI on a support community or in the product/technology industries, but that does not necessarily mean positive ROI can't be found elsewhere! For further reading on how to actually do the number-crunching, Oracle released a Best Practices Guide for Measuring the ROI of Online Communities that does cover the other classifications of communities and how to calculate their ROI. Other great resources would be Feverbee's Measuring the ROI of Online Communities article and Telligent’s Business Community Wiki – Making the Pitch to Senior Management.
Keep calm, and community on!
Image courtesy of Nit Soto via Creative Commons License (Flickr)
Editor's Note: For another take on the ROI of Communities, read Zachary Reiss Davis's Understanding Your Community's Value