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How to Measure the Business Value of Your Community

Posted by Mathijs Vleeming

#MadeToShare

Measuring and proving the value of community is a challenge that continues to plague community teams. According to the CMX 2022 Community Industry Report, one of the biggest frustrations for community professionals is proving the value of community. Only 10% of companies who participated in the research say that they can financially quantify the value of their community – down from 12% in 2021. However, for a community to become truly established as a part of a business, measuring and proving value is key. How do you quantify the business value of your community?

Source: CMX 2022 Community Industry Report

If a company can transition from simply delivering a product to building a community around its brand, it can unlock extraordinary competitive advantages and create a superior business model. Many organizations want to build online communities because they find out brands with communities have higher revenues and increased customer loyalty. 

Communities enhance marketing and support. They drive engagement, increase loyalty, and give customers cheaper and faster support. Moreover, communities are scalable. This is because community drives network effects: as engagement grows, the community gets smarter, faster to respond, more globally available, and generates more value.

In this article we discuss

The One Thing They Can’t Copy

As David Spinks put in his book “The Business of Belonging” (Spinks, David. The Business of Belonging (p. 13). Wiley. Kindle Edition):

One reason that community is becoming more important is that it’s becoming much easier to build products, but it’s always going to be very difficult to copy a community.

Anyone can rebuild your product nowadays. Community, on the other hand, can’t be copied. Someone can copy the look, feel, and functionality of your community platform, but they’ll lack the people, relationships, emotional investment, social identity and level of trust that an established community has built up. 

A community takes time to build and is typically a long-term investment. This can be a concern for companies who like to move fast and see quick results.

A realistic timeline for a community to drive value for a business is more like 6–12 months. And it can take years for a community to truly mature. What that means is that it will take a competitor just that long to build their own community. And if you’ve already owned a topic in the mind of the consumer by building community, it’s very hard to get someone to leave a community they already feel emotionally invested in. 

The Power of Community: Scalability

Scalability is the power of community. Community unlocks the ability to scale value creation: By activating more people to jointly contribute towards a shared goal, you are increasing the capacity and impact of your efforts as an organization or brand.

Scalability is how a company like Duolingo is able to run 2,600 events every month with a community team of three people. It’s how 83% of questions asked by Salesforce customers are answered by other customers. It’s how a subreddit with 155,000 members helps Notion users exchange ideas for how to be more successful with the product. 

Outside of the Product or Support sphere, it is also how purpose-driven organizations like the United Nations Development Programme (UNDP) are connecting the knowledge of over 50,000 members in their SparkBlue platform, serving as a centralized hub for community engagement and communication around areas of expertise and practice, to better serve their mission. It’s how Our Food Future is creating Canada’s first circular food economy, bringing together over 680 local nutritionists, farmers, businesses, government and citizens to collaborate on reducing food waste and creating more sustainable solutions to food systems. It’s how Greenpeace is empowering over 63,000 local volunteers to increase their global impact. They all empower their community members to build relationships and contribute to a shared purpose.

Many traditional communities, like professional or trade associations, can learn a lot from these examples. I believe these more traditional organizations’ long-term strategies should involve changing their engagement model from a traditional, event-led model to a community-led model, thereby sustaining and facilitating deep and continuous interactions.

Why You Must Define ROI and Business Value

Even though the benefits are clear, it is sometimes not easy to define a clear, measurable ROI for a community when creating your community concept and strategy. A lot of the benefits are “soft”. As is the case with traditional Public Relations, it is hard to quantify direct result of word of mouth marketing or extending the reach of your brand. 

But if you are creating a business community, you must define the business goals and business value of your community. Not only to jusitfy the investment, but also to make sure community is integrated into-, and supported by, your full organization and key stakeholders, and does not just sit within your Marketing or Communications Department.

The SPACES Model

A community industry best practice framework to define a community’s business value, which I love using in my consultancy work, is CMX’s SPACES model

All communities can derive business value from one of the following objectives. Most drive value in more than one.

The following is from a blog post by David Spinks explaining the model. I wouldn’t want to do David Spink’s work a disservice by explaining his model in a different way:  

S: Support

In a customer support community, members answer questions and solve problems for each other to reduce overall customer support costs and improve satisfaction.

This is an application of community that many are familiar with. It can take the form of a support forum where people show up with product questions and the community answers it for them. It can also provide an expert resource for users, or serve as a knowledge base.

Most common metrics:

  • Case deflection
  • Active users
  • Conversation engagement (posts, comments, DMs, etc.)
  • Number or percentage of answered questions
  • Reduced customer support calls

Examples: Atlassian Community, Fitbit Community, Asana Community Forum

P: Product Ideation, Innovation & Feedback

In product communities, members share ideas and feedback that drive innovation and product improvements.

By bringing users or customers together online (or sometimes offline), companies can leverage the collective insight of their community to get ideas for innovative features, identify the most important changes that will improve their products, and save money and time on surveys.

Some companies take this even further by bringing their community into every step of the product development process, from design to development, to ensure that the voice of the customer is present in everything they create.

Most common metrics:

  • Product ideas
  • Feature adoption
  • New user-generated content
  • Customer satisfaction
  • Number of event attendees

Examples: Lyft Driver Advisory Council, Dynatrace Community, UiPath Community

A: Acquisition and Advocacy

These communities operate as a network of ambassadors and advocates who drive awareness and growth for the business.

This is where community and marketing most closely intersect. Sure, a company can tell people to buy its product. But it’s much more powerful to have authentic advocates promote a product or experience. 

More and more companies are recognizing that they already have these advocates. If companies can connect their advocates and give them tools to be successful, they can drive massive growth and customer loyalty.

Most common metrics:

  • New customers
  • New user/member signup
  • Number of event attendees
  • Active users
  • Conversation engagement (posts, comments, DMs, etc.)

Examples: Skimm’bassadors, Lululemon Global Ambassadors, Nearpod PioNears

C: Content and Contribution

These communities are built of people who are contributing content that makes up the product or other assets.

Distributed content models are changing the way businesses function. From user-generated content to open-source platforms, distributed models allow value to be created by the masses, with the business just providing the platform. 

A community strategy is critical for these kinds of businesses, which explains why successful companies in these spaces (Airbnb, Kickstarter and Mozilla, to name a few) all have community teams.

Most common metrics:

  • New user-generated content
  • Active users
  • Conversation engagement (posts, comments, DMs, etc.)
  • New user/member signup
  • Number of event attendees

Examples: Airbnb Host Community, Google Developer Groups, Twitch Creator Camp, Duolingo Incubator, Teachable Community

E: Engagement (External or Internal)

External engagement communities bring together a group of people around a common interest that is related to a given brand or product.

Community is powerful because it gives people a common sense of identity and belonging. If a brand is facilitating that sense of identity, it doesn’t matter if the community is focused specifically on their product or not — members will feel a stronger connection to the brand.

Nike has a community for people who love running. Sephora has a community to talk about beauty. HubSpot has a community for inbound marketers. As a result, they’ve seen big increases in customer spending and reaped other community value by fueling ambassadors, product feedback, and more.

Most common metrics: External engagement

  • Active engagement
  • Conversation engagement (posts, comments, DMs, etc.)
  • Number of event attendees
  • New user-generated content
  • New user/member signup

Examples: Nike Run Club, Sephora Beauty Insider, Inbound Community (powered by Hubspot), Google’s Women Techmakers

Internal engagement communities are made up of employees, suppliers, partners, or vendors who work with a specific brand.

As organizations become more distributed and remote work becomes more common, internal engagement becomes even more important. Many companies are doing this behind the scenes today to keep employees engaged and build their all-important culture.

Financial institutions like Wells Fargo and Silicon Valley Bank build internal communities of subject-matter experts; hospitals and insurance companies do the same. Tech giants build internal communities to connect employees across the globe, and small startups are spearheading powerful internal communities on platforms like Slack.

Most common metrics: Internal engagement

  • Active users
  • Conversation engagement (posts, comments, DMs, etc.)
  • Net Promoter Score (NPS)
  • Number of event attendees
  • New user/member signup

Examples: Rothschild & Co Alumni, Microsoft, NASA @ Work

S: Success

Building off the popularity of customer support communities, success communities go beyond just fielding questions to actively drive increased product adoption and customer lifetime value.

These communities connect customers with each other to share best practices. They may help customers upskill how they use the product and develop strategy, or they may empower customers to become mentors and instructors

Most common metrics:

  • Active users
  • New user/member signups
  • Net Promoter Score (NPS)
  • Customer retention
  • Customer satisfaction

community objectives

CMX has identified these metrics as top metrics per objective in its 2022 Community Industry Report.

The SPACES model can work for many different types of industries. This is how the SPACES model could apply to associations, as laid out in the Association Community Compendium

  • Support: Empower members to answer questions and solve problems for each other. 
  • Product: Create spaces for members and contributors to share their ideas for how your organization can have a bigger impact and improve its initiatives. 
  • Acquisition: Empower members to speak on behalf of your organization, advocate for the movement, and recruit new volunteers. 
  • Content & Contribution: Empower your members to contribute their stories and ideas in (public-facing) content. 
  • Engagement: Create community experiences that help members connect with each other more deeply and feel like they belong to an incredible community so that they get involved more and stay involved longer. 
  • Success: Empower members to teach each other how to be more successful in their professional work or industry, and help them skill up in areas that will help them in their daily work and overall career.

 

Acquisition: Community Qualified Leads

When organizations are using community for spreading brand awareness and moving potential clients along the sales funnel, they sometimes use CQLs (Community Qualified Lead) to measure acquisition that directly relates to Community.

A marketing qualified lead (MQL) is defined as a site visitor that your marketing team has deemed likely to eventually turn into a sale. This lead has downloaded a content offer (like a whitepaper or a report) or interacted with your marketing team, but hasn’t yet entered into your sales funnel.

A sales qualified lead (SQL) is a lead that your sales team has decided is worth pursuing. SQLs are in your sales funnel, and your team is actively working to move them closer to a deal. They’re at the end of the consideration stage and are moving into the decision-making stage of their buyer’s journey where they’ll appreciate sales-focused content and support.

A CQL uses community engagement as a method of qualifying leads. Mary Thengvall is the author of The Business Value of Developer Relations and teaches companies about the concept of community-qualified leads (CQLs).

It all comes down to this principle: When someone attends your event or participates in your online community, you can use that data to better understand how strong of a relationship your organization has with that person. And how strong of a fit your product is for them. You can see the topics that they engage in to better understand the challenges they might need help with. This will help your marketing and sales team better understand who and what to focus on, and how to help solve their problems. They can use that data to personalize your marketing and communication to them.

CQLs are a great way to directly measure the business value of your communty, if your business goal is acquisition.

Examples: Salesforce’s Trailblazer Community, Notion Community

 

The Importance of Integrating Community With Crm

In order to measure the value of community, it’s critical that teams can connect their community member data to systems where sales and customer data is tracked.

Still, only 37% of respondents to the CMX 2022 Community Industry Report indicated they have a CRM that connects community and customer data.

cmx survey

Source: CMX 2022 Community Industry Survey

In conclusion

If you are creating a business community, you must define the business goals and business value of your community. We hope CMX’s SPACES mod

Find out how to effectively build your online community. Download The Association Community Compendium – How to harness the collective power of your members.

Association Community Compendium

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