Powering the community

by Dennis Howlett on May 17, 2007

Maggie Fox has posted an excellent conversation with Craig Cmehil and Mark Yolton where the guys explain the origins, workings and lessons learned from their 3+ years of operating SDN. The current numbers are staggering:

  • 800,000 members (open to anyone who chooses to register)
  • 4,000 posts per day
  • 500,000 page impressions per month
  • 200 countries represented

Craig said to me that on an average working day, he spends 3-4 hours in online conversations that include 10 calls and 20 online chats. When you think about it, that’s not bad for a person who is tasked with fostering a community of this size. But what’s really important is the value delivered.

During the conversation, Mark acknowledged that measuring ROI on this activity is incredibly difficult because community is but one activity among many others involved in a sales cycle. Studies are emerging on this aspect but like Mark, I think it will take some time before we have a good understanding of the monetary value that can be attached to this type of activity.

But then I wonder whether that’s necessarily something I’d wish to advocate under a prescriptive model. Communities are emerging because people feel there is a need to remain connected with others in a constant learning process. So if I find a new and better way to do something I’d not considered – how would I ascribe value? In the past I’d have learned tips and tricks from my immediate peers but their experience is necessarily limited. Engaging with a wider community offers discovery opportunities so in that sense there is both value and cost saving potential.

PShere’s an example that popped up in my mailbox just after I finished this post. Stuart ran a Google search that found the post. I couldn’t help directly but I was able to point him in the right direction.

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  • That's why you need us accountant types -:)

    You can't logically measure ROI until after the fact. But what you can do is model in advance and then do continuous measuring exercises. None of that's possible without having access to the underlying data and in my experience, most companies are pretty clueless on that point.

    I'd also add that marketers are the worst people in the world to attempt measurement (by and large) and IME. Another reason for bringing in the bean counters. Which was why I added my 2 penn'orth to Charlene's study on the topic.

    I know we get a lot of bad press but most of us want to help...
  • Dennis, I think Charlene's model is an excellent place to start, but we have found that calculating ROI tends to be "after the fact", i.e. several months post-launch of a program, evaluating specific incidents and (attempting) to calculate the ROI on the outcome. Of course, selling that is somewhat difficult, but programs can always be (strategically) pulled if they're not performing, an initial outlays tend to be fairly minimal.

    Everything about this space is (IME) bespoke - there is no one size fits all (which is very like human nature, isn't it?)
  • You're right Maggie and I've previously looked at this with my accountant's hat on when Charlene Li was doing her study (I contrib'd).

    When I think about ROI, my problem is one of attribution, certainty and confidence. Can 'we' be certain what we're measuring, that it's directly attributable and the impact it has? I don't think so at this time. That makes me hesitant.

    I would love to build a model capable of measuring these things but each time I look at the constituent parts I come up against brick walls.

    That leaves me with the issue of credibility. Sure - I can build a model but if it can be busted then I've got a problem.

    Charlene's final model was 'ok' but capable of demolition. I've not seen an update that makes sense to me as a cheque writing CFO type but hey - happy to hear if there's one around.
  • Hi Dennis - thank you so much for your kind words. The common calls for determining ROI is (IMHO) largely about helping people who don't "get" social media determine value. If you can show numbers that justify the expenditure to an exec who doesn't understand the implicit value in these type of relationship-building activities, you'll get the green light. After all, what's the ROI on lunch? We don't feel the need to justify that, since we understand well the cost vs. value of personally connecting with clients and other people who are important to our businesses.

    That being said, for a company of SAP's size, even showing a minute increase in some aspect of revenue generation would more than justify an extensive social media strategy.
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