Online communities learn new practices, report higher ROI

The growing trend of supporting the activities and strategic objectives of a business through digital communities continued to mature and gain refinements this year. Better integration across the board and real measures of ROI are a hallmark.
Written by Dion Hinchcliffe, Contributor

In the early days, online communities were typically fairly informal discussion sites created by a groups of enthusiasts on some subject, or they were slightly better-organized forums put together by activists passionate on a topic, often around political issues or an open source software project.

In those nascent days very few businesses were involved in online communities, the workings of which -- especially whether or how they might benefit the goals and objectives of a corporation or organization -- were generally quite poorly understood.

Frequented mostly by technology people, academics, and/or highly motivated birds of a feather interested in a particular niche subject, online communities could certainly be fun and informative, but rarely associated with creating outcomes that a serious enterprise would be interested in.

Online Communities Move to the Enterprise

Fast forward through a decade and a half of evolution, and we are now witnessing the emergence of online community as a real force in how businesses achieve a wide range of activities, from customer care and marketing, to workforce collaboration and B2B partner engagement. More tellingly, we are getting a much clearer understanding of how to make them highly effective, more efficient, and scalable ways of carrying out many vital business activities.

The State of Online Communities in 2015

Along the online community journey, right about halfway through, a major lesson was learned: It was realized that well-functioning online communities typically had dedicated staff with specialized skills that could create, nurture, grow, and sustain them. Thus the role of community manager was born and online communities became an real, formal profession, complete with job titles, industry recognition, and salaries, along with weighty responsibilities, even if most organizations still aren't very familiar with what they actually do today.

But the nagging question about business value was frequently asked, especially as online communities require sustained budget and staffing to exist and function.

Finding Value in Business Communities

In terms of ROI, probably the top long-standing question that traditional business leaders will ask about online communities, the case studies fortunately continue to grow. One of the best new examples is the data collected and published recently by Salesforce's Erica Kuhl, Senior Director of Community for the widely-known CRM firm. The data they collected on the business results of their growing portfolio of user communities is impressive:

Community members spend 2x more and have a 33% higher [product] adoption rates than non-community members.

Various other results have been collected on the effective of communities over the years, and they have been particularly valuable as a cost-effective boost to brand advocacy, as well as a much better way to provide care and support to many types of customers, while also cuts costs by about 30% on average according to my research.

I've been exploring the platforms (yes, this needs an update soon), successful good practices, and the strategic issues around digital communities -- both internal and for customers -- here on ZDNet for most of that time. Consequently, it's been heartening to see the steady -- but often interminably slow -- uptake of communities as a more vibrant, connected, engaged, scalable, and diversity-friendly new way of of working.

Community as a Management Practice

Now, we appear to be at a watershed moment, as community management becomes more than just a profession and a vital corporate activity, but an increasingly expected and formalized institutional function. To explore this issue, as I try to examine closely every year, is the new release of the Community Roundtable's highly anticipated 2015 State of Community Management (SOCM) report outlining the industry's recent realization of how the people, platforms, and supporting corporate structures/processes must be much better integrated as well as aligned with corporate goals. For background, the Community Roundtable is the most authoritative organization studying communities today.

The report itself conveys some notable advances in the last year, particularly around best-in-class communities, which are generally doing very well indeed against the Community Roundtable's regularly updated and widely used maturity model. Fully 78% of them have ways of measuring value, from time to resolution to revenue generated, with almost half of them now reporting positive ROI. Presumably most of the rest are still either in early development or taking strategic losses to achieve growth.

The report itself is an absolute wealth of data for those who are augmenting or updating their business functions using the various advantages of an online community model, and want to get it right by building on the latest lessons. The report includes detailed data and breakdowns on policy, governance, tools, content, staff development, skills, and much more. If you're involved in online community, it is required reading.

But the report's takeaway -- and my sense as well -- is that we've now started the next segment of the community management journey: Just as corporate management went through many decades of refinement as the first large corporations formed over a hundred years ago, community management -- which is the modern way of creating, organizing, guiding, and sustaining very large numbers of otherwise disconnected people towards common goals -- is now finding its way as a top-level management practice.

In particular, we can see this in the rise of the number of community management centers of excellence (CoEs), which the Community Roundtable specifically cited, along with 1) a collective better understanding of how to incorporate online communities in key business workflows, 2) the creating of incentives to engage, 3) formal structures to encourage active community engagement (particularly advocacy programs), and 4) a growing trend towards alignment of corporate strategy with community goals, all demonstrate -- along with the thousands of corporate communities out there reporting these improvements and evolutions -- that community management is gaining its place as an important and vital new top-level business function and management practice.

In fact, it's now clear the technology -- and by this I mean social technologies -- have actually led directly to the development new digital-era management and methods, such as Holacracy, Wirearchy, and others. Holacracy even has its own management software, called GlassFrog, which is used to monitor, measure, and self-organize. But it's still early days in this respect, and we are certainly not yet at a point where the community model is the primary way we manage and work. But in our omni-connected digital world, communities are indeed increasingly likely as a major model for the future of work.

Additional Reading

Building community for your brand? Don't sell. Empower.

Is the window closing on customer communities?

When online communities go to work

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