Why the ROI of Community Matters

An open letter to Sarah Judd Welch, in response to her article Why the ROI of community doesn’t actually matter

Dear Sarah,

I just read your article “Why the ROI of community doesn’t actually matter”. It is thoughtful and articulate. What shines through is an extraordinary passion for humanising work – highlighting what a community should be rather than measuring it along the way.

I hope this open letter (of sorts) contributes further to the conversation, rather than just chalking up another mark for the opposing side.

There are two aspects of the ROI debate that I think are missing from your post. These are the two reasons ROI is here to stay, although arguably in a slightly different form.

Some People Love Data

Like it or not, some people are data driven. They need facts and figures to run their lives. Unfortunately they will not be swayed by passionate, well-written articles alone. That is not to judge them for this preference, but to deny their existence alienates a part of any community. Most importantly, they will never be swayed by the argument ‘we don’t need to measure it because it’s obviously good’.

ROI is needed not because the community manager values it, but because those with a data preference around them do. It’s not enough to say ‘we’ve done the numbers before, and quite frankly I’m not doing them anymore’. If you want to engage with all your colleagues, not just the ones who think like you, tailoring your message will give them a better understanding of why community is important. The slight annoyance of having to do a calculation should be more than offset by the benefits of having a vibrant and diverse team around you.

Making Better Decisions

Each business faces different challenges, and for that reason the business case for community cannot rely entirely on data from other firms (which has been gathered in the past). The experience of others might be a really good guide, but this isn’t a watertight case for your firm according to community critics. What worked for others may not work for you. The easiest way to refute this argument is to have examples from your own company which show the benefit of community. It is a case that is built using results directly attributed to community management – some people call this storytelling.

I can see how some companies fall into the trap of measuring for its own sake. The beauty of standardised accounting principles is that it allows you to compare your own performance against competitors, a rationale which can be extended to an internal environment. However, measurement has the potential to be highly toxic and you can imagine a situation where community managers need to ‘win’ a battle (using direct ROI comparison) simply to secure time and resources.

The root cause of the battle is often incredibly mundane. Managers are faced with an increasing number of business initiatives and limited time (let’s not mention money for the moment). The simple question to ask is “what is the best combination of those initiatives?”. How you define “best” is completely up to you, and doesn’t have to be anything like a sales target. Those initiatives are practically limitless, and putting more time into community management is just one of those alternatives. There is also value in making a relatively quick decision.

Clearly the trap is asking each initiative to calculate an ROI. The decision is then pretty straightforward – rank them. This ignores, as you rightly point out, the intangible benefits of community. Such a decision method also ignores other very worthwhile benefits such as the longer term strategic impact, unless you insist on some crazy real options calculations.

Embrace People and Decisions

Measuring ROI is not about devaluing the connectedness of your community or any of the intangible benefits of community management. The trick is translating connectedness and relationships into something you can measure. The marketing people often measure repeat sales, which is only a rough proxy for what they actually want to measure (loyalty). Community management needs to take the same approach, and the metric is never going to be a perfect match. The difficult part is coming up with a metric that can overwhelmingly endorse putting time and effort into community management compared to another activity (say, paying for a celebrity endorsement).

Community management is legitimate and important. It is an art that is rapidly maturing, yet still needs to be understood by many. It is for this reason that communicating value, in ways that people will respond to, is absolutely critical.

Looking forward to your reply,