By now, the value proposition for a customer community is well-established. Having a community of people who use, improve, and advocate for your product will help you build relationships with customers and prospects that ultimately drive revenue.
But how do you actually measure that value—the real impact of community on your business?
To help us answer this crucial question, we turned to Richard Millington, Founder and Managing Director of FeverBee, the leading data-driven community consultancy. Millington is a thought leader in the community space and the author of multiple books on the topic, including his most recent, Building Community.
For the past couple of years, Millington and his team have been working to define statistically valid ways of proving the value of a community. At Pulse Europe 2023 in Amsterdam, he presented many of his key findings to our audience. Here are the highlights.
Surfacing Insights to Drive Decisions
Proving the value of community based on data is important because ultimately you want to be able to tie investments in community to real outcomes for the business. Only when you understand outcomes can you make really informed decisions.
The challenge with community data is that it is often very difficult to parse out correlation vs causation. For example, the data may indicate that customers who engage with the community are more likely to renew. But the inverse could also be true—satisfied customers unlikely to churn are more likely to engage with the community in the first place.
Finding Your North Star
Drilling down to true value thus requires being very targeted, tracking metrics that accurately reflect the outcome you want to achieve. You need to find at least one clear North Star metric that represents success for your organization.
Millington explored four methods for finding the North Star metric:
- Controlled experiments. Evaluate the impact of community on the business by turning off functionality and tracking the results.
- Compare groups. Compare outcomes for people who engage with the community vs those who didn’t participate very much.
- Value assignment. Measure the investment needed to impact a specific behavior, for example, call deflection.
- Surveys. Using surveys like NPS or CSAT when a user first joins a community and then again after a designated period of time. Have they achieved their goals, based on self-reporting?
All of these methods involve trade-offs. While any of them can be effective in certain contexts, Millington and his team developed an alternative method that is both simple and flexible.
The Community-Driven Impact Score
The community-driven impact score evaluates impact of a community on specific business outcomes through the lens of objective, valid data. Using a survey, respondents answer a single outcome-based question on a scale of zero to 10.
Here are some examples:
- How has the community influenced your likelihood of renewing your subscription?
- How has the community influenced your likelihood to utilize a feature of the product?
- How has the community influenced your decision to purchase additional features?
- Approximately how many times has the community saved you from calling support?
After collecting this survey data, you then take the average impact score and multiply it by the number of visitors. The result is the overall impact score.
Making the Score Clear and Actionable
This community-driven impact score should measure a meaningful outcome, but it also needs to be easy to understand and actionable. To achieve that:
- You need to ask a really precise, well-defined question.
- Don’t rely on an outside data expert to define the parameters—as a community and customer success professional, you have expertise that a data person doesn’t.
- Aggregate data based on time.
- Combine the community-driven impact score with customer information, such as net new customers per month.
- Aggregate by user data—if you know how many posts or shares or likes or comments a user has made, the score will be more meaningful.
Finally, make sure your value framework empowers you to decide what you’re going to do with the data before you collect it. Will your actions change based on the outcome? Determine the possible courses of action before you evaluate the data.
Learn More
Many organizations struggle to prove the value of their community. That leaves them flying blind when trying to make important decisions about improving the customer experience, building better customer relationships, and growing revenue. Finding the right North Star metric for your community is not necessarily easy, but if you take a data-first approach, you will eventually find the answer.
To learn more about community-driven impact, you can watch the full Pulse session, Community-Driven Impact: How to Prove and Improve Community Value.
Ready to build a community platform your customers will love? Learn more about Gainsight Customer Communities.
