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STUDY: The Business Impact of Online Communities

How do organizations track the impact of their online communities?  How do they measure expenditures, revenue, and cost savings?  How do they link the community to competitive advantage?

To get answers to these critical questions, Leader Networks conducted a survey of nearly 300 marketing and community leaders that resulted in The Business Impact of Online Communities Study. Out of the participants, 34% work at Associations.

The survey confirmed what we’ve seen first hand:

Online communities deliver significant business benefits – but community leaders struggle to measure value in business terms.

We spoke with Vanessa DiMauro, CEO of Leader Networks, who is the lead researcher on the study to learn more. Below are some of the  key findings with an eye to how they relate to Associations in particular.

On Competitive Advantage:

For most organizations, competitive advantage means keeping existing customers. A solid digital strategy, aligned with business goals, can be a game changer.  When we asked “What does digital competitive advantage mean to your company? We found that customer retention topped the charts (57%), followed by customer intimacy (48%).

However, Associations and Non-Profits were far more likely to identify competitive advantage as customer retention (74% vs. 50% of other business types) and less likely to identify it as increased sales (19% vs. 49%). A main reason why retention is so important to Associations is because our lifeblood is our members… keeping members engaged, ensuring that the content, services and products are relevant to them is core to the work we do, so naturally member retention is critically important.

Communities are organizational orchestras, and marketing is the conductor.

Communities are silo-breakers – the place where marketing, corporate communications, operations, support, and other departments collaborate across organizational boundaries.  Not surprisingly, marketing leads the pack with the majority involvement but is followed closely behind by operations/support, and corporate communications.

Associations were much less likely than B2B and B2C organizations to have participation from sales, HR, and R&D within their communities. While in-part this reflects on the all-inclusive nature of many Associations – marketing and member services are often rolled under the same title or job description –  it also speaks to the opportunity Associations have to strengthen connections between their online community and Association staff members. Associations have an opportunity to strengthen their communities by creating cross-functional stakeholder groups (think events, IT, R&D) who help steer the priorities, content and community success measures to help make community more integrated into the Association’s operations.

Here are some specific differences between Associations and other types of organizations.

  • Sales participation in the community was more common in B2B and B2C organizations (45%) than with Associations/Non-Profits (13%).
  • HR participation was most common in B2C/both organizations (40%) vs. B2B (20%) vs. Associations/ Non-Profits (13%).
  • R&D participation was most common in B2B (40%) vs. B2C/both (23%) vs. Associations/Non-Profits (18%).

Associations plan to integrate communities with operations and implement better analytics.

We wanted to know how organizations are planning to leverage communities to impact business in the future? When we asked that question some interesting key themes emerged:

  • Integrate the community into core operations to increase revenue
  • Invest more in analytical tools
  • Strengthen support and engagement
  • Listen better to existing idea exchanges
  • Increase staffing
  • Align community with member retention programs

This feedback indicates that communities are still in their formative stages: they are being used to listen and collaborate.  As community leaders implement more advanced analytical systems and integrate the community into operations, we anticipate that usage patterns will change. While Associations are typically strong at listening to their members, they also are often the least well-funded when compared against other types of organizations.  This means that Association community leaders need to do a lot more with less. Communities represent an opportunity for Associations to streamline operations by making them a one-stop-shop for member services, advocacy, events and education – which goes well beyond the common focus on member engagement.

Community leaders’ biggest obstacles are data analysis and reporting.

We asked community leaders what obstacles they face in leveraging the community to achieve competitive advantage: 72% face issues related to analyzing and reporting data and 35% lack meaningful metrics to report success in business terms.  This is a theme that carried through the study: many participants answered, “I don’t know” or “I guess” in response to financial questions – and it wasn’t because we didn’t draw from a senior level population.

This idea is reinforced by Lesley Lykins, Director of Member Engagement, The Customer Experience Professionals Association (CXPA), she said  “I have a monthly meeting with leadership where I report on the efforts and successes of the community. They are active on the community and I will often direct them to specific conversations. When leadership has their own set of experiences and successes in the community those become powerful stories to draw upon in communicating the value of community across the organization.”

When we asked the open-ended question, “What are the top three to five success measures your community tracks?” we received more than 100 responses. Answers ranged from vanity and baseline metrics (such as number of members and number of posts) to sophisticated, business-focused measures that would delight any CFO to her core.

From these responses we developed the Community Impact Framework which provides both a real-world look at how community leaders are currently tracking community impact – while demonstrating that metrics (of all kinds) must align with and support business goals to be relevant. If you are one of the 72% facing issues in reporting we hope that this Framework can be of help to you and your team.

For more insights into the Framework and the study please download your copy HERE.

 


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