"The Community Playbook: How Measuring ROI and Focusing on Benefits Can Drive Community Engagement and Success"

"The Community Playbook: How Measuring ROI and Focusing on Benefits Can Drive Community Engagement and Success"

In today's digital age, communities play a crucial role in the success of businesses. Whether it's an online forum, a social media group, or a customer support platform, communities provide a space for customers to connect, share knowledge, and build relationships. However, in order for communities to thrive, it's essential to measure their return on investment (ROI) and focus on the benefits they bring to both the business and its customers.

ROI measurement in the community calculus is similar to marketing ROI (MROI) calculations. It involves deciding how much to spend on community initiatives, holding the community function accountable, and justifying community spend. The goal is to measure the incremental financial value gained as a result of the community investment and compare it to the cost of the investment.

One way to measure community impact is by looking at direct sales. For example, Atlassian uses "total attendees" as a key performance indicator for its community events team. They found that 81% of attendees downloaded a free license within 30 days of the event, and 34% made a purchase. This shows that investing in community events can directly lead to incremental sales.

But measuring the CROI for existing members requires a more subtle approach. For subscription-based businesses, it's possible to measure the difference in churn between active community members and those who do not participate. By comparing the retention rates of these two groups, businesses can determine the financial impact of community engagement.

However, measuring financial impact is not the only benefit of communities. They also contribute to increasing sales pipelines, improving deal sizes, encouraging product adoption, providing support, and adding features or capabilities to a product. These aspects are crucial for businesses, especially when the community function reports to the Chief Marketing Officer. Measuring CROI helps justify the investment in community programs and activities, aligning them with the overall business strategy.

In addition to measuring ROI, businesses should also focus on the benefits their products or services bring to customers. People don't buy products; they buy better versions of themselves. Instead of simply listing the features of a product, businesses should highlight how those features make customers' lives better.

Apple's iconic ad campaign for the iPod is a perfect example of this. While other companies were boasting about the storage capacity of their MP3 players, Apple focused on the benefit of having "1,000 songs in your pocket." They tapped into the desire for convenience and personalization, making customers feel like they were becoming better versions of themselves by owning an iPod.

The key to highlighting benefits is understanding that features are the "what" of a product or service, while benefits are the "why" behind it. Customers don't care about the quarter-inch bits; they want quarter-inch holes. Businesses should focus on the outcomes and experiences that their products or services enable.

Take Twitter, for example. Instead of listing the features of the platform, Twitter's tagline is "Start a conversation, explore your interests, and be in the know." This focuses on the actions and benefits that users can enjoy by using Twitter, rather than the technical aspects of the platform itself.

Other companies, like Nest Thermostat, LinkedIn, and Github, have also mastered the art of highlighting benefits. Nest Thermostat's tagline, "Saving energy is a beautiful thing," emphasizes the environmental and cost-saving benefits of using their product. LinkedIn's tagline, "Be great at what you do," speaks directly to the desire for professional growth and success. Github's tagline, "Build software better, together," highlights the collaborative and knowledge-sharing benefits of their platform.

In conclusion, measuring ROI and focusing on the benefits of community engagement are essential for driving success in today's digital landscape. By understanding and quantifying the financial impact of communities, businesses can justify their investment and allocate resources effectively. Additionally, by highlighting the benefits their products or services bring to customers, businesses can create compelling narratives that resonate with their target audience.

Actionable Advice:

1. Track and measure the direct impact of community initiatives on sales. Look for patterns and correlations between community engagement and customer behavior to understand the financial value gained.
2. Conduct surveys and feedback sessions to gather insights from community members about the benefits they receive. Use this information to refine messaging and highlight the most impactful aspects of your product or service.
3. Continuously evaluate and adjust community strategies based on ROI and customer feedback. Experiment with different approaches to find what resonates best with your target audience.

Remember, communities are not just about numbers and features. They are about building meaningful connections and empowering customers to become better versions of themselves.