I attended the Online Community Best Practices: Measuring ROI and Web 2.0 webinar put on by Awareness today. Dave Carter, the Awareness CTO spoke about different types of communities and how the ROI of those communities would be measured in widely varying ways depending on the type of community and the objectives of it.
I actually showed up at the webinar 10 minutes late due to a client kick-off meeting that ran long, but it sounds like what I missed was mostly “the value of communities” (I think; hard to know for sure).
Some of the highlights from my notes are below.
What Makes a Community?
Dave mentioned that, these days, when he hears “community,” he thinks “social media,” which seems reasonable. For Marketers talking about Marketing, at least.
“Socializing” a site consists of multiple ingredients:
- Allowing the community to interact with content
- Allowing the community to add content many ways
- Allow the community to interact with each other
- Allow each member to share information about themselves
The magic is “the recipe” — creating interesting aggregations of content by mixing them together.
It used to be a big deal to say, “We’re not going to share your information.” That’s changing…some…because, in a community, some level of sharing of your information needs to happen. It’s about broadening from a person’s relationship with a site/a company to include a person’s relationship with other members of the community.
ROI vs. Objectives
Objectives are what you hope to achieve. ROI simply validates that you did it in a cost effective way. Objectives are forward-thinking (here’s what I hope to do), whereas ROI is a lagging indicator (here’s what happened).
Communities Come in Many Flavors
Knowledge sharing, expert location, corporate voice, passion communities, communities of interest, support communities, product innovation, etc…
These all have different and unique characteristics, and, thus, wildly different objectives and wildly different ways to measure ROI.
Measurement Comes in Many Flavors
- Immediate Online Data (very popular) — conversions, page views (be careful — could go up due to lousy site design), clickthroughs, # of profiled users, depth of participation, SEO results, # of incoming links
- Business metrics — trust scores, sales, loyalty (repeat buys), support costs (”A support call costs us $X, so we’ll count the number of support calls avoided; Charlene Li covers the Dell case study on this in Groundswell), productivity
- Data you can act on — who are your fans? demographic info from profiles, what topics move people, what do people tell us about themselves?
- What it enables — the ability to ask an audience a question cheaply, test products/concepts
Some of these are pretty tricky to put a dollar figure on.
To calculate ROI: <Data Point Your Company Values> * <Your Company’s Value of it> = $$$
You really need to have multiple of these…and they’re not necessarily easy to determine.
My Aside Here: one challenge with this approach is the assigning of a “value” to the data point. It can be a super-reasonable calculation/assessment, but, if you have more than 1 or 2 of these estimates, it becomes very, very, very tricky to get a broad audience to find the “ROI” to be credible, because there can be a perception that quantitative numbers were assigned subjectively, and that the number that comes out of the end of the calculation is largely just a promotional fiction. I asked this question on the webinar, and Dave clarified — it sounds like he’s thinking “come at it from multiple angles, but keep the calculated results separate: ‘if we look at it this way, this initiative saved us $50K; if we look at it this totally different way, it generated $75K in revenue, etc.’” That was a great answer, in my mind — it goes back to having clearly stated objectives and then trying to come up with reasonable proxies for assessing the progress towards those objectives.
Don’t underestimate the value of anecdotes.
David then went into some detail about the different types of goals for different types of communities, which I didn’t capture in detail (there’s a lot of value there — follow the link at the end of this post sometime after tomorrow afternoon to get the deck with those details).
It was an interesting webinar with some fairly practical tips as to what types of metrics might be more/less appropriate for different types of communities. To me, that was where the real value was. I’m really uncomfortable making the jump from “valid metrics” to “ROI calculation.” I got the sense that Dave would agree…actually, in the Q&A, his response to my question about making sure that value calculations were credible seemed to support this.
The slides (maybe an on-demand webinar?) should be available in the Resources area of the Awareness web site starting tomorrow afternoon.
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