**ROI: measurement and managing up**

-Reasons for having a community:

oConnecting people

oGetting out product information

oAdvertising revenue

oBuilding partnership relationships

oHelping users find values

oNew monetization strategies

oCo-registration

oCut down on calls center volume

oDownload products and other ‘stuff’

oProduct development, ideation, etc.

-Challenges:

oHow to measure our community in terms of social mission?

oHow do you measure non-revenue based movement? Customer engagement, etc.

oNot everyone has hard, financial ROI goals

oNot everyone has defined ROIs

oManagement often shoots down social media

oNo tracking on number of downloads of tools, for instance

oTrying to figure out how to use online communities to help figure stuff out

§Find out how to engage users

-Recommendations:

oFor business partners: do surveys/conversations to boil down the key measures that are producing financial results

oCome up with ROI strategy:

§$ in ad revenue

§Listen to our users

§Membership goals

§Sign up goals

§Lead generation for Sales force

§Increase the subscription time/length

§Sell space on community to partners

§Support boards: if we experience X less calls to the call center, then that’s a win

§Differential vs. integral

oMake sure your community provides value to the audience

§Tools, information, games, etc.

oTap into influencers:

§Mini Cooper has found a way to track the influencers and see how many times they’ve forwarded the ‘resume’

oManage up using case studies to prove that community works

§Harvard Business Review and eBay Germany did a study on metrics to prove this

oBe open to what could happen on your community

§You could connect different, unexpected peoples

-How do you work with management team on building these ROI models?

oReports based on traffic, etc.; Manage expectations in terms of managing up

oIntangibles: balancing the intangible value of a community with hard ROI

-How much of your budgets are based on the ROI?

oAbout 20% in the room said that this was the case

-If you had more investment in community, how much more successful could you be?

o100% agreed could be lots more successful

Key Takeaways:

1) Every community has unique ROI metric goals

2) Very few have future community investment tied to ROI

3) More investment = larger return

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Differential vs. Integral =

The ROI problem comes about not because one can't measure it, but that it frequently occurs due to the fact that most companies proforma financial analysis models were developed in such a way that they can't breakout the difference in results between line items and groups from the entire bottom line (the differential case). Other models are integral, like a Cobb-Douglas production function in which every factor in every scenario has costs and benefits that derive different results in comparison. When the CFO cares enough about measurement and performance, only then can you compare the net benefits of sticking to traditional media programs versus including some optimal mix of social media, of which, community should be an important part.

Remember that cost centers and revenue centers are arbitrary line items whose designations were facilitated by assigning the value of revenue to the department that billed it, not the team that made such revenue possible. If you can't sell your company on the value of your community, then we need to have another conversation, so feel free to get in touch.

contributed by richreader@hidden on Jun 20 1:49pm