Tag Archives: Financial Perspective

Two concepts central to thinking about Community ROI: Incremental value and conversion rate

large__2723422506In my previous post, I discussed ways to measure engagement in your online community. I quoted consultant and community manager Joseph Cothrel, who introduced two concepts that are central to thinking about community ROI: incremental value and conversion rate.

In this post I will explain these two concepts in more detail.

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How to measure engagement in your Online Community

large__1427829740In my previous two posts I talked about the difficulty of calculating the ROI of your online community. I showed you the ROI Engagement Pyramid that I designed to visualize the levels of interaction that people can show during online community efforts.  How engaged people are show up in their actions: the more engaged they are, the more they will interact. I explained that the more engaged a person is and starts to act, the easier it is to identify ROI metrics. In other words,  the higher the levels in the pyramid, the easier it is to identify clear metrics to measure your ROI.

The question remains:  How do you measure engagement in your online community?

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Measuring the ROI of your Online Community efforts + engagement pyramid model

large__4105747756I asked several community experts to advise me on how to measure the ROI of an online community. Most experts said that the ROI of online communities and social media efforts are almost impossible to calculate. According to them, there are still no real valid metrics on the market. How to justify your online (community) practices is the B-I-G question for many managers. So why is it that so many brands dive into something that seems immeasurable?  How do they ask for a budget if they cannot present a reasonable ROI?

Luckily, I found some ways that could help non-profit organizations in the process of seeking a way to determine their ROI.

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A financial perspective on the measurement of the ROI of an Online Community

large__3418499435If you decide to invest in an online community, how do you know that it will pay off? Especially for non-profits,  every investment should have a reasonable return-on-investment (ROI). Every dollar needs to be spend wisely.

Non-profits obviously want to understand and see through the relative impact of their online community efforts. The ideal situation would be to be able to determine quantifiable business results that are directly extractable to the online community. In reality, however, this is a very challenging (almost impossible) task due to a variety of reasons.

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