How to Evaluate Online Community Return on Investment - dummies

How to Evaluate Online Community Return on Investment

By Deborah Ng

As online community manager, your job is to assess every promotion, event, activity, and bit of content to determine its success. How your community reacts to everything you do is an important indicator of success.

Return on investment (ROI) is exactly what it sounds like. If your community is achieving or even surpassing its goals, your ROI action is rocking and rolling. If you’re losing money or campaigns aren’t working, you’re not getting a very good ROI, and you have to determine whether it’s worth the effort to keep it going.

ROI is more than sales figures; it’s a whole collective of community reactions to the experiences you’re putting forth for them. When you can determine how your community is paying attention and reacting to content or campaigns, you can determine what kind of return you’re receiving on your investment.

  • Sales: Did sales go up after launching your online community? Are they still going up? An active online presence should show positive sales growth and not the other way around.

  • Traffic: Your various online communities — whether they’re forums, blogs, Facebook pages, or Twitter accounts — should be driving traffic to whatever goal you hope to achieve with your community.

  • Buzz: If the word on the social networks is good and people are talking about your brand in a positive way, recommending that others join your community or buy what you’re selling, things are going right.

  • Subscriptions: If your community outreach is successful, you’ll see more people subscribing to your content.

  • Comments and feedback: A sure sign of a flourishing community is a rise in member participation. If you notice more members taking part in discussions, if each conversation is longer than the one before, and if everything that you post receives comments, you’re doing something right.

  • Memberships: Signups are funny things. Though it’s normal to have a dry period, if new members are continuing to sign up, that’s a good indication that your community efforts are paying off. Do keep an eye on trends, however. If you notice that memberships are slowing, see whether you can pinpoint why.

  • Greater activity on social networks: If your friend and follower numbers are rising, more people are becoming interested in your brand and in being part of your community.

  • Advertising revenue: If you earn money by selling ads on your forum, blog, or website, you’ll notice a rise in revenue along with growth in traffic and memberships. The more people who visit you each day, the more people are there to support your sponsors.

  • Goals: If you or your team set goals for your community and your community efforts — such as raising sales by a specific percentage, having a specific number of new subscribers, or gaining a certain amount of growth in community participation — you’ll want to measure progress toward these goals.

  • Customer loyalty: When your customers use only your brand, that’s some good customer loyalty right there. Also, when customers recommend you to their friends and relatives, that’s an indication of loyalty. Having your members interested in your brand is only part of the plan. Getting them to be loyal to it every day is a much better goal.

If you’re able to show positive growth in all your key areas, you can prove that your brand is getting a good ROI. ROI aside, if your members are happy, and if you’re achieving or surpassing your community goals, your community should be around for a long time to come.