Article

Christie Fidura
Christie Fidura 15 January 2015

Community Can Be Measured: How To Measure Community Success In Marketing Terms

Saying a community's value cannot be measured is a sweeping statement that is simply not true, especially if you tie the value of community into your marketing department.

As community professionals, we hear community management myths thrown about all the time. One of the most common myths we hear that drives us crazy? Community cannot be measured. 

We hear time and again that the return on investment (ROI) of community is a nebulous thing that cannot be measured, that relationships cannot be measured, and that community is about faith more than concrete returns. It’s a sweeping statement that is simply not true, especially if you tie the value of community into your marketing department.

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We are working to debunk this myth all the time by establishing industry-wide metrics for success and sharing case studies of what has measurably worked for others. For community professionals who report to or work in marketing departments, our challenges can often be unique to the business at hand and extremely hard to pinpoint.

Having managed and built community at Adobe and now from experience running my own consulting company, The Perfect Circle, I know firsthand how challenging this can be. Today, I’ll share some of the tools you need to gather to start measuring the marketing value of your community as well as show you a few ways you can quantify community value within the goals of your marketing team.

First, we have to Understand the Goals of Marketing Teams

Marketing’s goals almost always center around the following three points that drive customers through the marketing funnel:

  1. Raise awareness
  2. Build relationships
  3. Help the customer on their way to make a purchase

In order to understand the value of their investment in comparison to how much value they will receive in return, marketing will ask questions about community-driven success such as:

  • Awareness: How many people attended an event? How much social media activity was generated at that event? How many new customers did we onboard as a result of links that were shared with community event attendees?
  • Relationship Building: How many leads did we generate as a direct result of that individual community activity? How many calls-to-action were achieved in the expected way (e.g. visits to the site via community forums)?
  • Purchase Journey: How many of those leads turned into customers as a direct result of that individual event? How many sales were finally achieved as a direct result of that individual event?

Marketing teams often engage in “marketing by the numbers," which aims to analyze how much budget is invested versus the value received from the spending.

For example, if a marketing manager wants to advertise on a website with a banner advertisement, she needs to put a total price on the banner’s design and hosting compared to the number of people who may see and react to her advertisement. If she spends more on the advertisement than the company makes as a result of the spending based on that ad, she has to justify this value loss to her management team.

To ensure the return on investment can be achieved, marketing will ask these same types of questions about the community.

So how can a community professional take all of these expectations and assign specific value to their community strategy?

Look at the High-Level Return on Community Investment

Some good "by-the-book" figures are readily available to hone in on the effectiveness of marketing within loyal customer communities. You can use these as reference points when you’re getting started, and then it will be important to show how these metrics shake out in your own community marketing efforts.

First, in Marketo’s post Looking for Higher Marketing ROI? Engage Your Customers, they reported the following:

  • Repeat customers spend 67% more than new customer
  • Loyal customers are worth 10 times as much as their first purchase
  • Word-of-mouth recommendations influence 80% of customer decisions

In The Fetch’s post How Threadless, The Huffington Post, and Fitocracy Understand the Business Value of Community, Sarah Judd Welch cites Harvard Business School’s finding that increasing retention rate by 5% can increase profits by up to 95% over the long term.

Finally, in their report Social Dollars: The Economic Benefits of Online Communities, The Marketing Science Institute reports that increased engagement on community sites can result in a 25% increase in revenue.

These pie-in-the-sky figures will be enough to hold off your stakeholders until you can do some real data analysis on your own community marketing efforts.

Doing The Math and Proving Your Worth

Data is a community builder’s best friend. Without it, you can’t make judgments or decisions about who makes up your community, where they’re located/hanging out, and what they’re doing.

While you may need to test out a variety of metrics to get the ones that really reveal the most to your marketing team, it’s important that above all else, you simply start measuring as much as you can. This gives you a baseline to continue to measure from in the future, which will give you trends. The baseline and resulting trends will enable you to weave together a story about community growth and how it drives marketing value. If you don’t have a starting point, you won’t know how far you’ve come.

(Don’t be worried if your baseline is zero – all data is good data because of the insights you will gain, and you can only go up from here!)

Make It Manageable
First, don’t overwhelm yourself with large quantities of data. If you have a large audience or community, using systematic sampling will cut your data sample down to a less scary and manageable level. Instead of trying to determine what every single person in your community is doing or calculating their individual engagement level, you systematically choose a member per every nth (e.g., the 10th). You then do your analysis against those individuals to determine the answer to your question. If you have a large community, systematic sampling can be your saving grace.

For example, let’s say you want to determine how many of your new community members have contributed to your online forum within the past 30 days. Out of 1,000 members, perform your systematic sampling by choosing every 10th member and analyzing their stats in-depth. This will give you 100 members. You can then do your analysis against those 100 members in order to understand a trend.

Once you understand the trend (high number of contributions vs. low number of contributions or paying vs. non-paying customer status, whatever makes sense for your community), you can make a plan. This makes your data set much more manageable.

Now, let’s look at the three marketing goals and how you can measure community’s impact on each one.

1. Doing the Math for Raising Awareness
There are so many ways of doing this, but what is important is that you figure out for your community where driving awareness is most important. It can be done in a number of ways:

  • Events
  • Community contests and campaigns
  • Sharing referral codes within ambassador programs
  • Using branded hashtags on social media

Here’s a great starting point for measuring how much awareness was built in-person: Analyze the registration list for a previous event your company held. Determine how many community members attended or RSVPed out of your total community (you should be monitoring registrants via a program like Eventbrite or Splash).

Google Time: using systematic sampling, look up the social media accounts for a percentage of your community. Determine if these attendees were talking about your event, and, if so, how much and how often. Measure the number of people that follow them on those accounts. This will give you an idea of how many community members attended your event, helped you raise awareness within their social networks, and the possible reach of that awareness. There are several tools like Sprout Social that will do this on your behalf for the event overall, but you’re really trying to determine what percentage of mentions and awareness came from within your community.

Or take a cue from leaders like Erica Kuhl at Salesforce, who analyzed all Salesforce brand mentions and found that a huge portion of these were coming from the community members, not from random people. This directly proves that these community members are disproportionately spreading your messages with their followers.

Using a tool like Mixpanel, you can also look at who used referral codes shared at your events or clicked through community event emails in order to sign up for products and services that you offer. This ties directly into the business’s bottom line. If this rate is higher in your community than outside your community, you’re golden.

You can also work with your marketing team before the event to request a special hashtag or post that only your community members will receive, ensuring you can track its usage throughout the event. You’ll be able to see the overall potential reach of that hashtag using a tool like TweetReach.

Also, take a look at community growth and sales growth right after community events. Do you see a spike in membership requests or sales right after? How can you work to ensure that you see a bigger spike next time? Trends are incredibly powerful pieces of knowledge, and marketing departments love this type of insight.

Register for the next Community Managers Meetup in London on January 22nd, 2015.

Ambassador programs offer myriad ways of measuring marketing success. You can measure growth of the program (especially organic growth), cost-per-acquisition of customers recruited by ambassadors, the amount and reach of content created by ambassadors, and more. Take a look at this example from Random House publishing, with plenty of sample metrics to get you going.

2. Doing the Math for Relationship Building

Here, you want to first answer the question: What types of engagements is your community undertaking? Are they hosting user group meetings, gathering in social settings, writing blogs posts, publishing books, being active on social media (using the company @handle or #tag), or answering support questions on the forum? All of these types of activities give you specific metrics by which you can measure activity. Once you’ve identified how your community is engaging, you can begin to measure where you can work to build relationships that will help drive marketing efforts forward.

Here are a few examples of this type of work:

  • Can you develop relationships with influencers who are already blogging about your product or similar products? Then can you monitor how referrals from their blog posts drive sales? This may require some budget contribution but will be useful to run as an experiment.
  • Can you offer more tools, support, resource or even funding to your community members who organize meetups? Will that then increase attendance at those meetups? Is there a higher turnout achieved when your company provides a guest speaker, or helps promote the event via your corporate social media channels?
  • Can you reach out to those who are offering the most help on your support forums? How can you deepen relationships with them to get them more deeply invested in your brand? Gamification is useful here – see if you can create a leader board of the highest contributors to the forum, and post it right on the front page. People want to see their name on the Top 10 list! And don’t forget to thank those high contributors, which you can do via social media, and also personally. A handwritten thank you note is a lovely and personal gesture, and engenders long-lasting loyalty. 

For example, Birchbox has created a featured blogger program, where they refer to their bloggers as "Birchbloggers." They share posts about their picks. They can then measure success by measuring traffic generated by their community-related content versus general content on their blog.

Physical events, for instance, are very important for marketing, as they foster a tighter connection between the community and the organization. If a user group is meeting three times per quarter with an average attendance size of 100, you can count the number of unique attendees (at least 100) to find how many people are connecting deeply with the organization. If you can have a company representative attend these events, you can gather email addresses and contact information for those that you connect with and deepen your relationships over time.

Another great way to put a number on community relationships: see how much of your content on your blog can be crowd-sourced by community members with whom you have relationships. Can you turn them into contributors? What percentage of your blog posts are written by community members? How much traffic do community-generated posts drive versus internally-generated posts?

3. Doing the Math for Purchase Journey

If you work on a marketing team, it is absolutely essential that you find a way to connect community activity with purchase decisions. Your marketing team will need to know how your work contributes to the bottom line, like it or not.

There are several ways you can do this.

You can analyze the effectiveness of social media traffic to determine how many community members are actively driving people (via their social media channels) to a landing page that allows your visitors to sign up to be notified of emails, new products, etc. From there, you can attribute all sign-ups from this page to the actions of your relationships with community members.

Setting up a special landing page can be super simple, especially if you use a service like LaunchRock and measure the number of emails that flow in from community referrals.

You can also share special referral links or bitly links with your community that allow you to track click-throughs on their content. If it’s a paid event, you can offer your community members a specific discount code to use for their own registration and to share with their external networks. This is a very easy way to analyse the effectiveness of community, although you may have to do a bit of work to get executive stakeholder approval for the discount. Justification will be easier with your baseline and trend metrics ready to prove the potential/expected value of this.  

One highly effective and simple way to analyze purchase journey via community activities is adding a "How did you hear about us?" question to your download form or purchase form on your website. Better yet, you can set up Mixpanel to track events related to the community or simple bit.ly links to track click-throughs to purchase pages via community pages, events, or forums. If you’re seeing a trend of community influencing referrals in this way, you now have another reason to engage your members by thanking them on official social media channels (gold star of the week) and encouraging their behaviour further.

Another idea is to take all the leads generated the week of an event held by a community member and cross-reference that list to determine who purchased after attending your event. This will not always be clear-cut, and often people make purchase decisions long after initially hearing about your products and services via your community. But all of these combined will give you and the marketing department an analysis of trend. You’ll have a better understanding of what’s working, what’s not working, who is working hard, and what they’re doing for you. This will enable you to then make informed decisions as to what you should change, and why.

That’s the power of the trend.

Marketing and Community Can Go Hand-in-Hand
These are just a few of the ways you can measure community success in each of these three marketing buckets, but your community marketing goals should all fit into these three drivers of marketing success. Your individual metrics will vary depending on your specific team’s goals and measures of success.

Lastly, be sure to ask your marketing department what will help them do their jobs better. What kind of data do they need? Is their quarterly budget going up or down? Which challenges are they facing? Do they need to generate more awareness or do they need to spend time solidifying more relationships? Community can help with all of these things.

Having a baseline for success means that you can monitor your progress over time, justify new hires on your team, and potentially receive bigger budgets in the future so you can afford to do more and more for your community members. Having said that, remember that community is not always about conversions. It’s about building a better business, improving your product line, achieving amazing results (like being invited to speaking gigs and partnering with amazing community organizations) and driving your brand into wonderful uncharted territory.

Register for the next Community Managers Meetup in London on January 22nd, 2015.

 

About Author: 

Christie Fidura is a Senior Consultant at The Perfect Circle, helping brands devise a strategy to build community to obtain maximum market impact.www.weareperfectcircle.co.uk/



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