Determining Online Community ROI (Part 1: Community-Side Metrics)
by Matthew Lees
In recent months my research, writing, and client work has (happily) focused on one of the hottest topics in social media…calculating ROI. For a variety of reasons, determining quantifiable ROI of social media programs and online community initiatives presents a variety of challenges. There’s nothing new in this statement; people have been trying for years to make it easier to figure this out. But ROI keeps fighting back. It’s getting to the point, though, where business executives will be expecting a more quantified understanding of the impact customer communities, for example, are having on the bottom line. Knowing that it’s “the right thing to do” from a customer-centric perspective isn’t going to cut it much longer.
One of the challenges is the fact that some (or even most) of the information needed to measure ROI isn’t in a convenient location.
Last year in a post called “B2B Communities – What Works,” Mike Rowland discussed a handful of essential best practices for B2B communities. He wrote: “You can measure the ROI for B2B communities, but you cannot get there by using only community software metrics and/or web analytics packages like Omniture or Google Analytics. None of these provide true value metrics that have an economic value associated with them. To get to ROI, you must build relationships within your organization so you can obtain real data on customers, leads, ecommerce transactions, etc.”
Right on, Mike. To get at community ROI (whether for B2B, B2C, or any other type of community), you’ve got to track down data from several sources – particularly from sources that you probably don’t have direct control over or access to – which takes building relationships, making allies, and a bit of legwork.
Community-Side Metrics
The relatively straightforward part of the legwork compiling the data you do have direct access to. This is the information you can get from log files, your community platform database (often through an analytics dashboard), and, if you use one, a third-party analytics package (such as Google Analytics or Omniture). The types of things available from these community-side sources include:
• Traffic and Usage. Pages served, page views, visits (and unique visits), time on site, etc.
• Membership. Total members, new members, active members, reputation and ranks, etc.
• Activity. Posts, comments, ideas, invitations, votes, ratings, subscriptions/notifications, downloads, views (e.g., of video clips), time between posts, etc.
• Search. Both quantity of searches and specific search terms (such as top 20 search terms)
• Other. Moderation (e.g., moderator touches), referrer pages, etc.
Ideally you’ll be able to break down this data based on important parameters, such as time and location within the community. For example, you’ll probably want to look at the all-time number of members, as well as the number of members over a given time period (typically week-over-week or month-over-month). And you may want to look not only at total pages served within the community, but also at pages served within particular areas (such as forums, blogs, idea sites, and so on).
Community-side metrics can be very useful, but, as Mike wrote, they don’t illustrate economic value. At least, not in and of themselves. They’re certainly useful in terms of knowing whether or not the community is healthy (three consecutive months of decreasing page views, for example, might tell you that something is wrong), but they only get you part of the way toward determining ROI.
Up next…building relationships and doing the legwork to identify the business-side metrics that get you the rest of the way there.
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This entry was posted on Monday, April 26th, 2010 at 6:13 pm and is filed under Best Practices, Measurement & Reporting. Both comments and pings are currently closed.
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