Why do we create online communities?
This week we are concentrating on the topic of metrics and how it can justify the expenditures of creating an online community. According to Richard Millington’s book “Buzzing Communities”, many organizations develop online communities in order to meet objects that aren’t suited for communities. An example of such an objective is to reach new audiences with the intent of them buying a certain product or service.
Such objectives raise questions on why would someone participate in a community for a product (or service) that they currently don’t buy? How do you attract new customers? Initially, you don’t, according to Millington, you should concentrate on your existing customers. If you create a community of your existing customers, they may bring in their acquaintances, friends or family, ultimately bringing new customers to your community.
Once you have an established community, you can begin analyzing its behavior. Monitoring is vital to justifying the amount of resources that you are spending on the community’s development and maintenance. According to Harry Gold’s article, some of the social media ROI metrics that are commonly used by companies include:
- Engagement Rates: Ultimately, this is a clear indication of the community participant’s loyalty to your company. Loyalty can potentially result in repeat purchases and new customers through their own recommendations. In Harry’s examples, engagement rates metric is the total amount of Facebook likes and comments divided by the total fan count.
- “Talking about this”: This is a “buzz metric” that indicates how many people are talking about you on Facebook. Can provide insight on how well a marketing campaign is being received by your audience.
- Facebook Reach: Metric that Facebook generates based on the organic, viral and paid searches. This metric is very useful for determining how well each of your registered search terms are being utilized by community members.
The items above I believe are some of the most important metrics to use while justifying the costs of an online community. Engagement rates are vital, these indicate loyalty between customers that are participating in your online community. These are just some of the metrics that can be used to show upper management how important community management can be.
Reflection: My Own Experiences
During my time working with a previous employer’s marketing department, I gained some experience with tracking conversion through our social networking presence and public website. Through our consulting agency, we were able to track how many people interacted with our Facebook and Twitter page. Once we had a detailed view of who had been using our social media pages, we were then able to link the person to an appointment in our system, thus linking actual revenue to our online community.
Our ability to link our customer engagement to a specific dollar amount was instrumental in justifying our significant costs to upper management. Incurred costs included the day-to-day maintenance of our Twitter feed and Facebook page, along with general updates to our public website. Overall, this was a great learning experience on how to explain the value of investing in an online community.