Importance of Community Return on Investment (ROI)

Community is all about bringing people together. It’s a shared experience among community members. More and more companies are realizing the importance of creating community. With this, companies also need to prove the value and ROI of their communities.

We cover how to measure community ROI in one of our other blog posts. This time, we’re going to focus on why we measure the impact of communities and how important these metrics are to success.

Community ROI

Return on investment (ROI) from a profitability standpoint is something easily measured by many companies and organizations. It is a benchmark measurement everyone must calculate. A precise formula directly shows profit and helps evaluate an investment.

However, many companies and organizations' biggest value add is their community. It can be hard to prove the ROI of community to stakeholders.

Why Prove ROI?

Engagement
Attendance
Activity
Retention
Keep everyone in the loop
Justify the investment
Get internal buy-in from different teams
Need for cross-functional contribution to community building

The value of community spreads across your online presence, customers, in-person communities, and even employees. The industry doesn’t have a direct formula for the ROI of community so it can be hard to stand firm on how valuable your community is to others.

Investing in Community

Community helps organizations stay in touch with the customers, stakeholders, and other members.

Online communities are a great way for businesses to stay connected with their customers. It requires time, resources, and a clear purpose, but the long-term benefits for members and businesses are exponential.

Community touches every level of the business and of the customer journey. Data and analytics help prove the value of community investment. And, when it comes to presenting that value to stakeholders, executives, and other employees, always keep the story in mind.

Details in the Data

“What gets measured, gets managed.” – Peter Drucker

Community value gets measured through data. For example, data from Slack will help you analyze different engagement and see patterns in user behavior. These types of analytics will help to build out your community.

Data also is a key factor in showcasing community ROI. Stakeholders, executives, and other employees can visually see the impact of your community through the data you collect.

When presenting your findings, always use the date to create a story. We absorb stories far better than we absorb facts and figures.

What story is your data telling?