September 21, 2012 Leave a comment
As I move forward with my community 2.0 initiative I realize how important it is to justify the value of our community members. Once you get beyond justifying the need of a strong social community strategy for your company the next step is secure the required funding to support your strategy. Most executives understand the need to be actively engaged with their customers but will want data points to back that up. After some #BigData analysis I now have that answer.
My initial analysis has determined that companies that have community members average purchase is 48% higher than those companies who do not have any community members. The answer why is elusive but some assumptions can be made. What we know is community members are much more informed about your products, much more engaged in options and are regularly looking for answers to help make their solution better. If you look at all those eagerly awaiting the release of the #iPhone5 and IOS6 today from Apple you can relate these assumptions. Those who purchase a new iPhone today will need a new charger, a new case and probably any other accessories that might enhance the value of their purchase. If you use this as an example for your company then you can justify the value of the community by educating existing customers and prospects on not only your core products but also any other accessories that will help make that solutions stronger and more beneficial.
The opportunity resides in member acquisition. If you can increase the number of companies who have community members by 1% the increase in revenue is substantial. This is the monetization justification that executives want before committing to investing more in your social community strategy. The formula to calculate this is really no different than my formula for determining SEO ROI http://bracerennels.com/seo/.
If you know your cost for member acquisition and what your investment is to convert hose anonymous visitors to active community members then you can relate what that increase will be in return on revenue from average purchase. There is also another assumption which is the more actively you engage your members from a company you have the larger that average purchase price will rise.
So, how are you measuring your community?