How to handle the ROI conversation as a community manager

June 7, 2014 — by Kimbe MacMaster2



How to handle the ROI conversation as a community manager

June 7, 2014 — by Kimbe MacMaster2

How to handle the ROI conversation as a community manager - Emma CunninghamThe ROI conversation has occurred an overbearing number of times among groups of community managers. It’s almost impossible to touch on this subject without an undertone of frustration. Actually it’s not really so much an undertone as just blatantly stated! But I get it. We’re frustrated by the fact that those we report to don’t fundamentally understand the value that we provide. They hired us. They “knew” they needed us, but they’re not really sure why.

In last week’s #CMGRHangout,  Emma CunninghamDom GarrettJon KoobTim McDonaldMaya PavezaJordan Reeves and Brit Thompson explored (very passionately, I might add!) the various sides to this ROI “conundrum”, the value community managers provide above and beyond ROI, and the roles we can each take to shed light on our value.

Why does the ROI “conundrum” exist in community management?

Why do we have such a hard time proving a return on investment in community management, anyway? Last week’s #CMGRHangout really helped to identify many reasons. Here are some of the best:

  • Community building is a long game. It’s not an activity where you flick the switch to turn on your Twitter account one night and find leads pouring in your front door the next morning. As a result, measuring it’s impact over a long period, with no defined end date becomes pretty tricky.
  • Your influence is often indirectly linked to the bottom line. In order to see ROI on a community manager and their activities, a business needs to see that the sales you bring in and the costs you save the company are greater than your salary plus the expenses you put in to your community. But more often than not, community managers only play in the very top of the sales funnel. A community manager may bring in a lead only to have that lead passed off to the sales team or an email marketing campaign. How can you really measure this against the bottom line when you’re so far away from it?
  • Community building is more than marketing. Community managers are not social media managers. For starters, communities can be built for things above and beyond just gaining new customers like product feedback, crisis management, technical support, or recruitment. I’ll avoid exploring this tangent for the sake of brevity, but I’m sure if you ask Tim McDonald, he will passionately explain the differences to you! As Tim puts it, community managers “are a resource for every department in our organizations”. Measuring the impact of each of these things on the bottom line becomes a much bigger project than one marketing campaign.
  • There are many intangible benefits to a community that are difficult to quantify. These include things like strong relationships with consumers or influencers, trust with clients, awareness with potential customers. It’s hard enough to measure the level of each of these with community members, let alone determine how it impacts the bottom line. But we know, and research has proven, that these do, in fact, impact the bottom line (or we wouldn’t be doing them!) – it’s just extremely difficult to measure.

How can we adapt traditional ROI to fit us?

Let’s be real here – we’re all operating in businesses. Positive results must come out of the work we’re doing, and more likely than not, these must be shown monetarily. But there are many ways that you can get creative with showing your monetary value.

The first step is to recognize that ROI is not only bringing money into the company, but saving the company money, too. So there are actually two major ways to generate a ROI, both equally valuable:

  1. Bringing in more money from an activity than was spent on that activity
  2. Saving more money from an activity than you spent on that activity

So how can you do this as a community manager? Here are two great ways:

  1. Bringing in money: Show your impact in the top of the funnel
    If you generate leads through social media, you can find out the dollar value of this activity by knowing the average value of a lead. (Hint: take your average conversion % and multiply it by the average value of each customer order)
  2. Saving money: Show the resources you’re gaining and processes your streamlining

Are you getting product feedback from your community? Then you’re saving the company the cost of expensive research projects or focus groups. Are you answering technical support questions through Twitter? Then you’re saving a certain number of call-centre reps. Share these benefits and don’t forget them!

Sharing your value beyond the numbers

We all provide value above and beyond ROI. But managers have a difficult time buying into this, so here’s where we need to do a little bit of extra work. The key here is to show them the value you provide, not just tell them. Help them understand and believe in what you do. Tell stories!

A great way to showcase the value you create above and beyond the bottom line is screen shots of great conversations. Sure analytics on engagement will help to show trends of what’s happening in your community, but showing tweets from community members who rave about your product or who shared and recommended your service to a friend will help to evoke emotion and belief from executives. This gives them a better view into the longer term and somewhat less tangible benefits of what you do.

Most community managers are emailing, tweeting, calling, and video chatting for a reason. Unless you’re project is purely an on-the-side, for fun project (not likely!) then you’ll need to show the company what you offer them. But really, when you take a step back and think about it, this is the case for most positions in most organizations. It’s the responsibility of any employee to show their manager the value that they bring to the company.  Sure, it’s not the easiest task for community managers and there are hurdles in our way that make it a challenge. But hey, building a community isn’t easy either and we all jumped on that bandwagon!

Kimbe MacMaster

Co-founder and CEO at Fides
Kimbe is a co-founder and CEO of @Fides_Social. A social media fanatic, start-up marketer, and community manager herself, she understands the ins and outs of the social process. When she's not buzzing around the Kitchener-Waterloo Startup Community, you can find her on the ball diamond or walking her chow chow. Connect with her on Twitter (@Kimbe_Mac).