Want to see how we can calculate how much our company benefits from a successful support community, read this discussion.
Here, I would like to share with you how you can calculate the Return on Investment (ROI) for your support community. I have learned these from a CMX webinar by Ben Fowler. Ok, let's see how to measure the success.
Communities have many metrics that can be measured. One of the most important ones is ROI, which is very hard to calculate.
For many communities, specially support communities, value is driven from non-monetary transactions, and that is what makes this measurement hard.
In other types of communities, we do not call the user engagement as transaction. But in support communities, every time that a user looks to a piece of content, or asks and answers a questions, we count it as a transaction. These transactions are non-monetary and here we learn how to show the monetary value for these non-monetary transactions.
Different communities focus on different things:
customer satisfaction
case deflection & case avoidance
product adoption
net promoter score
new user on-boarding
In a support community, we mainly focus on the case deflection & case avoidance.
Your community should be great in providing the the engagement metrics. Most of the platforms deliver the reports that tell you:
how often visitors come back
how often members post content
who your super users are
number of helpful or correct answers
It is hard to translate these metrics into pure ROI. Therefore, community managers use a formula to convert these metrics into an actual ROI number. We are going forward with a real world example to learn how to calculate the ROI. In this example, we focus on "support case deflection and avoidance".
Case deflection is when someone wants to repost something or open a case on the community, then we show them some contents that can solve their issue, they look at the content and find it helpful, therefore they do not file the case or report anything new on the community.
Case avoidance is when people do not tend to file a case, and they come to your support community, search for the content, and asking questions on your community perhaps.
Both, case deflection and case avoidance, can be measured by google analytics and other tools to measure the events.
Now, let's see what is the best formula to calculate the ROI:
To find the variable in the equation above, we need to find 5 numbers:
Average number of answers per month
$ Value of answers
Number of customer searches per month
Percentage of searches that are successful
Community cost (budget)
Value of an answers= (1 2)
Networked value of answers= (2 3) multiply by 4
Also, you can simply use this link to use the Community Roundtable free calculator. Just insert your numbers and the system does the calculation for you.
Now we are going to explain each item in more details.
1. Average number of answers per month: It is a sum of three items below.
Forum: all the answers on forum in one month. (example 100 answers)
Case Wizard: anytime a user starts to create a case but users recommended self-service content instead, or better to say deflections. (example 50)
Knowledge Base: A % of the helpful or like marks on your knowledge base content, which is art-side and you need to have a gustimation for this. (example 20).
therefore, the total value for the average number of answers per month is 100+50+20= 170
2. Value of an answer: what is the cost to answer a customer question if it is answered by your support team? You need to know:
annual salaries / number of cases in each year
% of time spent on self-service questions vs. "non-deflectable" complex questions
In this example we are considering the value for each answer as $100.
3. Number of customer searches: what is the average number of searches your customers perform each month? You can get help from analytics API to measure these types of events. In this example, we has 4000 customer searches each month on our community.
4. Percentage for successful searches: a successful search is when users searches the community and does not make a support contact with the 24 hours of their last search. In this example, from the 4000 searches, 3600 people did not have a support contact, therefore, the percentage for the successful search is: 90% = 4000 /3600
5. Cost of community:
Platform: All contracts and vendors
People: Community team, support team answering questions, support team writing knowledge content.
In this example the total cost for the community is $ 600.000
Now, we can put all the number in the equation to calculate ROI. The ROI for these numbers is a huge number of 669%. In this case, the company profit is something close to 4 million dollars in a year. There, you can show how valuable it is to have a successful support community and how it can benefit your whole company.
We have used this method in our company to show how great is working our support community and why our company should consider budget for the community project.
If you have any questions, please post a "reply" under this discussion. I will be happy to help.