Tracking Down Online Community ROI (Part 2: Business-Side Metrics)
by Matthew Lees
Part 1 looked at community-side metrics. This is the data you get from your community’s Web server log files, your community platform database, and any third-party analytics systems (such as Google Analytics or Omniture) that you’re using.
It’s also the data that you – as a business sponsor, community manager, or other stakeholder – likely have direct access to. And while it’s important information, it’s used primarily to help ensure the health of the community, not quantify and provide insight into business value. For that, you need to tap into business-side metrics.
Business-Side Metrics
These are the metrics that do show business value. Unfortunately, for most online community use cases, such data lives in places that you probably don’t have direct access to or control over. This is where the legwork and the relationship building that Mike Rowland referred to in the previous post come into play.
Where to look in your organization and who to build relationships with depends on what you’re after. Here are four common business cases for B2B communities, with an overview of their potential business value as well as mention of the relevant business-side metrics, location of these metrics, and people who can help you access and understand these metrics and what they mean for the bottom line.
1. Service and Support. Reducing contact center costs is one of the primary business goals of a community in which customers help answer each others’ questions and solve each others’ problems (via what’s often called “peer-to-peer support”).
Business-side metrics: number of incidents (by source, e.g., phone, email, chat, etc.), first-contact resolution, agent hours
Where the metrics live: contact center analytics system
Who to make friends with: not only the VP of Support, but also the manager who is the most fluent with the call center’s reporting and analytics
2. Product Development Feature Set and Road Map. Here you’re probably looking for (a) ideas for new products and services, (b) ideas for new features and functionality, (c) ideas around improving customer-facing processes (i.e., making it easier for customers to do business with you), and (d) the prioritization of these ideas. These ideas and their prioritization by customers can improve processes, reduce time to market, and give you higher confidence that your product road map is what your customers want.
Business-side metrics: number of customer ideas that are implemented; number of existing ideas that were validated by customers; time to market; dollar value of reduced time to market (can be a squishy number)
Where the metrics live: product tracking system; business process systems (ideally these all track the sources of ideas)
Who to make friends with: product development / R&D teams, particularly the keepers of the road map and features/capabilities lists
3. Customer Acquisition and Lead Generation. Communities are a great way for people to go beyond what they read on your Web site and in your marketing collateral, to get a sense of how people are using your products in the real world. So prospects are part of the community ecosystem as well as existing customers. A vibrant community full of helpful, engaged customers can be effective in moving prospects into your sales pipeline.
Business-side metrics: number of new accounts that came in through the community, new revenue from these accounts
Where the metrics live: CRM system or other sales tracking application
Who to make friends with: the sales team, particularly the sales operations manager who tracks sourcing
4. Customer Satisfaction and Loyalty. Numerous studies have shown that online communities can have a positive affect on customer satisfaction and loyalty. The tricky thing in demonstrating this for your own community is to separate out cause and effect. Communities can be self-selecting; your most satisfied and loyal customers are probably over-represented in your community. For them, the community didn’t cause their high level of satisfaction, for example. Any surveys you do to measure satisfaction and loyalty should take this into consideration.
Business-side metrics: survey results; customer satisfaction / loyalty methodology or system, such as Net Promoter Score (NPS)
Where the metrics live: survey results database; satisfaction, loyalty system
Who to make friends with: the marketing specialist who measures customer satisfaction and loyalty for your organization
Legwork and Relationship Building
You may have noticed that the business-side metrics are really just the ones that your organization and your colleagues are already using to identify and analyze business value. You’re just looking to apply and tune them towards quantifying their impact from the community.
Of course, while the methods may be familiar, it isn’t necessarily easy to compile metrics and estimate dollars saved and/or generated. A lot of it comes down to doing the legwork and building relationships with the right people. Ideally determining community ROI is at the top of their priority list as well as yours. It will take time and attention to come up with ROI hypotheses, test them using data you’ve tracked down from wherever it lives, analyze the results, revise your hypotheses accordingly, and iterate. Hopefully your colleagues become partners in these efforts.
So how do you build these relationships, make those allies, and get the information you need? We’ll leave that for another day. But experience shows that chocolate helps…
Back to the blog
This entry was posted on Thursday, April 29th, 2010 at 2:44 pm and is filed under Measurement & Reporting. Both comments and pings are currently closed.
[...] This post was mentioned on Twitter by Matthew Lees. Matthew Lees said: More on metrics and relationship building –> Tracking Down Online Community ROI (Part 2: Business-Side Metrics) – http://bit.ly/bWxQNz [...]