The Return on Investment (ROI) of Online Communities

I’m often in the position of being an advocate of online communities. I think that when they’re well conceived and executed they work incredibly well to connect people across roles and organizational constraints. But it can be a hard slog to prove it.

(Not that I really believe in proving things with numbers. I believe marketing is practice of faith, not reason. Yet I have to be able to discuss numbers with some familiarity, and report on progress and results.)

Then today, via the Will Pate experience, I discovered a great post from Bill Johnson on the ROI of Online Communities, with numbers to boot!

Bill and Joe Cothrel presented the following numbers at the Online Community Business Forum.

• Community users remain customers 50% longer than non-community users (AT&T, 2002).
• 43% of support forums visits are in lieu of opening up a support case. (Cisco, 2004).
• Community users spend 54% more than non-community users (EBay, 2006).
• In customer support, live interaction costs 87% more per transaction on average than forums and other web self-service options (ASP, 2002).
• Cost per interaction in customers support averages $12 via the contact center versus $0.25 via self-service options (Forrester, 2006).
• Community users visit nine times more often than non-community users (McKInsey, 2000).
• Community users have four times as many page views as non-community users (McKInsey, 2000).
• 56% percent of online community members log in once a day or more (Annenberg, 2007).
• Customers report good experiences in forums more than twice as often as they do via calls or mail (Jupiter, 2006).

There’s also an accompanying ROI of Communities powerpoint presentation (PDF). So now there are some good numbers to talk about when we talk about how to quantify the ROI of online communities.

Now the nubmers aren’t perfect. In fact, to me they’re more valuable for their consistency with each other and with my experience of conceiving and executing online communities, than as standalone factoids. Basically, people involved in online communities are more engaged in every behaviour you want to foster on your website and for your organization.

What more can I say? Connect with your people and you’ll discover in practice what makes communities so special. But don’t expect a flood. Online communities work more like drip irrigation than a fire hose—small, discreet interactions that accumulate in effect and momentum over time.