Businesses often struggle when measuring the value of a community offering. Many times, companies only focus on one primary aspect of the community to quantify ROI, such as reducing service costs. However, there are so many other benefits that are waiting to be reaped within your community.
Tracking and measuring these benefits has been difficult for many Community Managers, who are always looking for ways to drive more engagement and get more value from their community. Let’s first explore this issue by discussing some community myths, then we can run through some less commonly considered advantages that many companies see from implementing a community solution.
Myth #1: Communities are only for reducing customer service costs
Usually, companies invest in a community to offset support costs such as resourcing and staffing. While case deflection is typically the easiest measurement to capture and the quickest to see improvement on, communities don’t just reduce customer servicing costs. Communities can also make a company more agile, innovative, and ultimately more profitable.
Myth #2: Communities don’t contribute to the bottom line
Unfortunately, there is still a stigma present in business today that providing a community for customers is a money-suck that doesn’t really bring any intrinsic value with it. Others think that there isn’t really an empirical method to prove its value. However, implementing community capabilities strengthen your brand, nurtures existing customers (who are renewing and buying more products more often), and improves a customer’s lifetime profitability.
Areas where community value can be measured
Promotes cost savings
Saving on overhead is something that every business is concerned with. Providing a 24-hour accessible support solution for your customers allows them to instantly and conveniently find answers for themselves. Resources such as articles, blogs, and peer-to-peer discussion drive down case submissions, phone calls, and potential escalations. This, in turn, reduces support agent time and results in faster overall case resolution. Now your agents can support more customers in less time and typically your cost per case measurements are improved.
Improves customer satisfaction
It costs 10 times more to bring on a new customer rather than selling to an existing customer. Therefore, customer satisfaction is perhaps the most sure-fire way to ensure continued business at the most cost-effective rate.
Companies that leverage communities see higher product adoption and customer retention within community members. And a lot of companies show an increased Net Promoter Score (a customer’s willingness to recommend a company’s products or services) as a direct result from community members. These members are true brand advocates that improve your overall bottom line, whether that be through their own continued service or evangelizing your business.
Increases the overall business value
Through the use of communities, you are able to co-create with your customers to build your brand and help shape your products and services to be the most appealing to the current market. By leveraging collaborative features like Ideas and Chatter, you also have a convenient and affordable way to potentially develop new products or applications altogether.
Communities are an easy way to cater and tailor your product to existing customers. You can elicit product feedback through community discussions to collaboratively design the best solutions possible.
Ramps up revenue generation
Generating revenue is the final, most impactful benefit of implementing a community. As aforementioned, you are able to easily improve on products with the help of your users’ input. And as your product or service improves, you can bank on higher sales prices or added margins for increased revenue.
There is also evidence that communities are a causation of increased average spend from members. The University of Michigan recently reported that users who are a member of a community spend 19% more than those who are not. Essentially, you’re leaving money on the table if you pass up on providing a community for your customers.
Some businesses have a one-track mind when it comes to the decision to provide a community for customers. They know that it will help with service costs, but often don’t think beyond this one benefit. But when maintained correctly, a community platform can spur innovation, keep your customers happy, and even make you money in the long run.
Need more expertise on driving value from Community Cloud? Contact Simplus today.