Two of the most common questions we receive from marketers are “How do I know if it’s worth having a community?” and “How can I prove to my executives that my community is worth their investment?” To get the initial funding and keep support coming for an owner community — one which you operate and fully brand on your own website — you must be able to clearly measure and communicate the value up to your CMO and CFO. That means capturing the effect it will have on your company’s profitability as a part of your overall marketing investments.
As a part of a new research report I just published today with Shaheen Parks, we built upon Forrester’s Total Economic Impact™ (TEI) methodology to provide you with a reference framework to estimate the ROI of your community.
We suggest that you focus on these three qualitative benefits, which form the core of our framework:
- New lead generation: How many new leads or prospects come to your company each year because of your community, multiplied by your average deal size and overall lead close rate.
- Increase in lead close or conversion rate: The effect your community has on your overall lead close rate, multiplied by your average deal size.
- Deflection of support calls: How many potential support calls get answered by the community, multiplied by your average cost per call.
As well as two “softer” quantifiable benefits which are not part of the formal framework:
- Improved products and solutions via ideation: Product improvements informed by soliciting ideas for new features and product direction via your community.
- Increased customer satisfaction with your company overall: Increases to your company’s Net Promoter Scores and similar metrics because of their positive experiences in your community.
And then account for these three costs:
- Community managers: The fully loaded cost of your community managers.
- IT and development resources: All costs associated with developing and maintaining your community.
- Platform cost: The annual spend for the technology that your community is built upon.
To illustrate how these factors come together, we created a reference model of a successful owner community implementation for a B2B company with an average deal size of $100,000 and 2,000 qualified annual leads: