A friend who’s doing consulting work asked me “Everyone’s asking about the ROI on community building. At your work at ACDSee, your work in building a community, does your management require some sort of justification or lead generation goals etc?”.
The answer to the question is that no one has asked me to justify my proposed work with specific numbers but I do need to provide a needs assessment & analysis for my proposals. My first project is based on the expectation of a considerable ROI, but I haven’t quantified it.
About my project: Our goal is to maximize communication with our customers in all ways that we interact with them (website, forums, blog, from within the app’s, tech support, etc). The expectation of ROI is that by making all the points of contact relevant can only increase customer satisfaction. My prediction for our ROI is:
- Less demand on Customer Service & Tech Support as people more easily self serve themselves. My sister & I found that to be true at our site.
- Marketing will have more information as we place polls in the forums.
- Product development will have direct feedback thru betas.
- Our blog has already proven an excellent place to teach how to use our products utilizing multimedia options.
My project includes benchmarking where we’re at now & monitoring the results on a regular basis. This will be imperative for me to show the growth of my efforts in a qualitative way & report on the progress.
To answer the question I’m going to draw on some resources others have gathered.
Will Pate presents these facts about online community ROI:
- Community users remain customers 50% longer than non-community users. (AT&T, 2002)
- 43% of support forums visits are in lieu of opening up a support case. (Cisco, 2004).
- Cost per interaction in customers support averages $12 via the contact center versus $0.25 via self-service options. (Forrester, 2006)
- Community users spend 54% more than non-community users (EBay, 2006)
Sean O’Driscoll built on that post & listed out specifics for Support, Sales & Marketing & Product/Program Dev’t.
So, stop pitching community and start pitching the ROI benefits!! Online success rate!! Satisfaction!! Cost model improvements! Product improvement!
As I mentioned, we’re aiming for Customer Satisfaction at ACDSee. I had read Sean’s post when it was first published & it’s interesting that upon rereading it now, that the word ‘localization’ jumped out at me. When I was at the ACDSee offices localization was added to my vocabulary. We offer software in 4 languages & I’m now aware of the implications of that.
This was a good exercise because I can use some of these facts in my proposal. Do you have other helpful sources on ROI for Community Building?
Christopher Kenton has a good post titled “Social Media Metrics” at The Marketers’ Consortium blog: http://tinyurl.com/2rtrnt.
A brief excerpt — with the kicker being the last sentence:
“The lack of robust metrics makes a lot of marketers gun shy. If you can’t demonstrate clear ROI, how can you justify the budget? I don’t want to be flippant about this, but I think marketers need to bring a little balance to the justifiable demand for performance accountability. We do need to be accountable, and we do need to show that we’ve thoroughly vetted the investments we’re making. But when you’re in a competitive market that demands innovation, you have to get in the trenches to help innovation along, instead of just throwing up knee-jerk stop signs to every project that doesn’t come with a business case tied up in a neat bow. It makes me think of a prehistoric fish in a receding inland sea saying to an amphibian ‘so, what’s the business case for legs?'”
“Our goal is to maximize communication with our customers in all ways that we interact with them (website, forums, blog, from within the app’s, tech support, etc). The expectation of ROI is that by making all the points of contact relevant can only increase customer satisfaction.”
This just makes good business sense; increase the number/frequency of meaningful and relevant interactions with the customer, and your ROI will increase as well. Good stuff Connie!
Tim – thanks the excerpt. I was looking for the full article & found this: http://scribb.typepad.com/marketonomy/2006/12/social_media_me.html
I like the word ‘innovation’ in the excerpt. That’s the key I think. The thing with innovation is that ‘tried & tested’ aren’t exactly a part of that making it all the harder to anticipate results.
Thanks Mack! I appreciate your comment! How’s Facebook going for you?
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