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Community Management ROI - CMX Summit East
The document discusses how community managers can effectively measure return on investment (ROI) for community management. It emphasizes the importance of defining clear goals, selecting appropriate metrics, and employing analysis techniques to illustrate the benefits of community engagement. Ultimately, it aims to empower community managers to demonstrate their value within organizations to secure support and resources.
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Community Management ROI - CMX Summit East
- 1.
- 2. Me •One of you •7+years •Flock, UserVoice, ZOZI, Coursera •Community Manager Breakfast •Not a math whiz (so don’t be intimidated) @evanhamilton evanhamilton.com
- 3. ROI Return On Investment Spent$10, made $15. ROI = $5
- 4. TODAY 1. Why thisis important 2. Finding your goals 3. Metrics & analytics 4. Navigating ROI in your org 5. Kittens Everyone leaves able to start measuring basic ROI.
- 5.
- 6. WHY THIS ISIMPORTANT Saying “this is hard” is lame. (Thanks to Loree Draude of Google AdWords for the inspiration.)
- 7. WHY THIS ISIMPORTANT • “Well, do you really NEED that hire?” • “I know you’ve been here for two years, but I’m not sure we have the budget to give you a raise.” • “No, I don’t care about engagement! Put a bunch of product links in there and sell some stuff.” • “Well, I have an MBA and you don’t, so...” • “We have to cut costs, so you’re going to be part of the sales team now.” • “The new CEO would love a runthrough of what exactly it is that you do for the business.” Eventually, the hammer will land.
- 8. SO WHY DON’TWE SHOW ROI? •It IS hard! •There ARE benefits beyond measurable ROI •Junior people •Companies unwilling to measure
- 9. A NOTE ONTHEORIES "PEOPLE are experience rich and theory poor. People who are busy doing things don't have opportunities to collect and organize their experiences and make sense of them." -Malcolm Gladwell
- 10. #1: KNOW WHATTHE GOAL IS •Not “engagement” •End of the day? It’s about the bottom line. •Retention or acquisition. •Keep asking until you get the answer. •Q: What's the goal? •A: To increase loyalty •Q: Why do we care if customers are more loyal? •A: They visit our website more frequently •Q: What happens if they visit the website more frequently? •A: They buy more of our products. Example via Feverbee: http://bit.ly/1K584be
- 11. #2: KNOW WHATTO MEASURE •Engagement is important •Health metrics vs ROI metrics
- 12. #2: KNOW WHATTO MEASURE •Retention Commonly measured: •Churn less, use product more •Be more likely to spend more money •Cost less to retain •Acquisition •Be more likely to sign up/purchase •Be more likely to upgrade •Drive new leads
- 13.
- 14. #3: METRICS &ANALYSIS Data Geek Disclaimer: Yes, this is correlation, not causation.
- 15. #3: METRICS &ANALYSIS Very simply, you’re just going to compare. Photos via: http://bit.ly/1Jh0Tvs & http://bit.ly/1KNsN0a
- 16. #3: METRICS &ANALYSIS •Define “active” •Pull list of active members •Too many? Get a systematic sample: every nth user First, you need a sample of active community members.
- 17.
- 18. #3: METRICS &ANALYSIS •Same method to get same number of customers who aren’t in community. Next, you need your control group.
- 19. CHURN LESS, USEPRODUCT MORE “Members of our community will be happier and thus use our product more, meaning we make more money (off ads, monthly SaaS fees, etc).” Churn = (customers at start of period - customers at end of period) / customers at start of period
- 20. CHURN LESS, USEPRODUCT MORE Churn = (customers at start of period - customers at end of period) / customers at start of period March January =/ 66%- January March January =/ 33%- January Churn Rate Churn Rate
- 21. CHURN LESS, USEPRODUCT MORE •Good news for SaaS companies: you should already have this data •Same with product usage
- 22.
- 23. MORE LIKELY TOSPEND MORE “Members of our community will be happier, and thus more likely to purchase more items from us.” Lifetime Value = average order value X number of repeat transactions X average retention months for typical customer
- 24. MORE LIKELY TOSPEND MORE Lifetime Value = average order value X number of repeat transactions X average retention months for typical customer x 3 x 4| x 4 x 5| = $120/yr = $300/yr $10 $15 Transactions Transactions Months Months
- 25. CASE STUDY “People whowere active in the Salesforce community in the last 3 months spent 2x more than people who were not active.” Erica Kuhl Sr. Director of Community
- 26.
- 27. YOUR ORG DOESN’TTRACK THIS? • Surface-level indicators: NetPromoter Score & Customer Satisfaction • Survey-based; no product info necessary. Be the first & be a superhero. Or: Get simple.
- 28.
- 29. COST LESS TORETAIN “Members of the community will help each other with common issues & questions, so we don’t have to spend money on it.” forum cost / deflected support contacts
- 30. COST LESS TORETAIN •Exit survey: Did you find a solution? •percentage solved x total visitors = “deflected contacts” •cost of forum efforts / deflected •cost of support / calls forum cost / deflected support contacts
- 31. COST LESS TORETAIN forum cost / deflected support contacts Solved x / Responded = 50% Deflection Rate 50% Deflection Rate 500 Visitors per Month /$2000 Forum Cost per Month = $8 Cost per Deflection 800 Calls/Emails per Month /$8000 Support Cost per Month = $10 Cost per Call/Email
- 32.
- 33. MORE LIKELY TOSIGN UP/PURCHASE •# signed up / community visitors (Pro Tip: Google Tag Manager) •# signed up / normal website visitors “Members of the community will be more likely to try our paid product.”
- 34. MORE LIKELY TOSIGN UP/PURCHASE # signed up / visitors 33%= VisitorsSignups / Conversion Rate 66%= VisitorsSignups / Conversion Rate
- 35. CASE STUDY Jennifer SableLopez Director of Community
- 36.
- 37. SEE? YOU CANDO THIS It’s not rocket surgery. •Find your equation (they exist) •Get your two samples •Compare community to non-community •Divide cost by results, adjust until profitable
- 38. Easy, right? Ok, nowthe bad news.
- 39.
- 40. CONTROL GROUPS •Community membersalready love you. •Correlation vs Causation •But correlation is an ok starting point. I’ve been cheating. Photos via: http://bit.ly/1Jh0Tvs & http://bit.ly/1FmOw17
- 41. CONTROL GROUPS Causation Photo via:http://bit.ly/1L7DBqJ •Look at before/after joining community •Holy grail: A/B testing
- 42.
- 43. #4: GETTING MANAGEMENTBUY-IN & RESOURCES •Common challenge •Vicious cycle
- 44. GETTING DEVS TOHELP YOU •Overall: Be nice •Strike during lulls •Ask them if they can teach you
- 45. GETTING MANAGEMENT TOBOTHER •Jealousy •COO/CFO/Finance •Analytics consultant •Hack v1 yourself
- 46. IN CLOSING Go dothis. Be taken seriously (by your company and your friends). Get piles of job offers. Icons CreativeCommons ShareAlike Licensed: http://bit.ly/1FeScji & http://bit.ly/1K6ED8L & http://bit.ly/1cUTmGi & http://bit.ly/1HegidB
- 47. Photo via http://bit.ly/1FoHusI THANKYOU EVANHAMILTON.COM @EVANHAMILTON
Editor's Notes
- #6 This is a dry preso, so: kittens.
- #9 1. (but so is PR, much of marketing, working at McDonalds) 2. Totally, but who cares 3. Thank goodness for CMX 4. Ugh. We’ll get back to this later
- #10 Reminder: not a math whiz, this isn’t a magical formula Not mind-blowingly new, but hopefully a useful framework PS: Highly recommend getting asked to speak at CMX to force you to think about this :) PPS: Join your local community management group, like CM breakfast! We talk about this stuff all the time.
- #11 You can’t pay rent with engagement. Dev can’t say “we build things that work really well” - even they need to build products people will pay for Bottom line is not cynical, just practical. Companies need money to exist. Sigh, acquisition. Personally I think this can be opposed to community values, but that’s another talk. This should be happening in your interview. Not deciding on goals is like agreeing to drive a friend somewhere but not asking where.
- #12 Health is great! Definitely measure active members, and engagement, and satisfaction, and time on site, and all of that. Just don’t call it ROI.
- #13 1. (which affects SaaS fees, ad revenue, etc) New leads: SEO/WOM/Referrals Lots of exceptions: nonprofits, products where the community is the product, etc
- #15 Gasp!
- #16 Gasp!
- #17 Define active: no point in shooting yourself in the foot by calling someone who posted once “active” Pull list: may have to be you manually looking at forum, noting who is active. For this reason, I don’t recommend Facebook groups or Meetup past a MVC. If you do use ‘em, cheat like I did on Meetup (sorry Scott!)
- #18 Ahhh, math terms. Here: kitten
- #23 This is a dry preso, so: kittens.
- #26 Erica Kuhl Data
- #27 This is a dry preso, so: kittens.
- #30 Really want to verify? Break it. One big co saw the forums go down for 2 days, saw call volume spike.
- #31 Really want to verify? Break it. One big co saw the forums go down for 2 days, saw call volume spike.
- #32 Really want to verify? Break it. One big co saw the forums go down for 2 days, saw call volume spike.
- #36 Verify
- #37 This is a dry preso, so: kittens.
- #38 Really want to verify? Break it. One big co saw the forums go down for 2 days, saw call volume spike.
- #40 This is a dry preso, so: kittens.
- #43 This is a dry preso, so: kittens.
- #48 This is a dry preso, so: kittens.