How to measure success for your community using KPIs that matter

Measuring the success of a community is a challenging task.

As an experienced community manager, I have had countless conversations with business owners, senior executives and even other community managers on how to measure a successful community.

Here’s some “average” ways to measure the success of a community:

  • % increase in the number of people who have joined the community
  • % increase in number of posts/comments/likes per month
  • % increase in event attendees over time

The above metrics are incredibly common, but they are usually some of the worst ways to measure community success.

There are better ways to measure whether your community is on track and doing well. 

How can we do better at measuring the success of a community?

As soon as I am either tasked with building a new community for a client (or mentoring others who are about to launch their own), I focus on these two questions BEFORE doing anything else:

  1. What is the Return on Investment (ROI) from building this community?

  2. What are the Key Performance Indicators (KPIs) that we could use to indicate this community is on track to helping us achieve ROI?

Avoid wasting time on metrics that don’t matter (like how many people are in your community).

Instead, recalibrate and focus on the actual goals of the business and how building a community can help achieve those goals.

1. How can we calculate the ROI (Return On Investment) from building a community?

The majority of senior managers and business owners want to know how community helps with the following:

How does community help us acquire new customers?
How does community help us retain existing customers?

Let’s go through both of these scenarios in more detail.

ROI #1: How does community help us acquire new customers?

Every community is different, however here are some ways that building a community can help with acquiring new customers:

Market Research and Insights
Your community can be a rich source of market research, offering insights into consumer behavior, trends, and preferences. This information can guide your marketing strategy, product development, and customer service policies, making them more effective and reducing wastage of resources.

Increase in Organic Traffic
Communities can drive significant organic traffic to your website through discussions, questions, and content sharing. This can reduce your reliance on paid advertising and improve your search engine rankings, leading to more organic sales.

Brand Advocacy
Active community members often become brand advocates, spreading positive word-of-mouth about your products or services. This form of marketing is highly effective and comes at a lower cost than traditional advertising methods.

Direct Revenue Streams
Depending on the nature of your business, the community itself can become a direct source of revenue. This can be through memberships, exclusive access to products or services, or partnerships with other brands targeting your community.

Leverage User-Generated Content and raise more awareness Encourage your community members to create content around your products or services. This user-generated content can act as authentic marketing material, reducing your content creation costs and enhancing your brand’s credibility.

Networking and Collaborations
Building a business community can open up opportunities for networking and collaborations with other businesses, influencers, and industry leaders. These partnerships can enhance your brand’s visibility and credibility, leading to new business opportunities.

 

ROI #2: How does community help us retain existing customers?

Here are ways that building a community can help with retaining existing customers:

Enhance Customer Loyalty: A vibrant community fosters a strong emotional connection between your brand and your customers. This loyalty translates into repeat purchases, higher lifetime value, and reduced costs related to acquiring new customers.

Feedback and Product Development: Use your community as a sounding board for new ideas and feedback on existing products. This direct line to your customer base can lead to more successful products and services, reducing the risk of costly product development missteps.

Customer Support and Self-Service: A well-engaged community often participates in peer-to-peer support, reducing the load on your customer service team. This can decrease support costs and increase customer satisfaction, as many users prefer finding answers through community engagement over reaching out to support teams directly.

Scaling Customer Education: Use the community to educate your customers about your products or services, how to get the most out of them, and any updates or changes. Educated customers are more likely to be satisfied and less likely to need intensive support.

If your business uses any of the below metrics, the key is to find a way to measure how your community impacts these metrics:

  • Customer lifetime value (CLV)
  • Customer acquisition costs (CAC)
  • Customer retention rates
  • Sales (attributable to community members)
  • Cost savings (from peer-to-peer support)

2. What KPIs are useful to determine if your community is on the right track?

I’ve mentioned some relevant community KPIs in a previous blog post a few years ago – and a lot of those are still relevant today.

Most importantly you should be focusing on KPI’s that actually track towards your greater goal – and typically that how you will be achieving your ROI. 

Here’s a more updated breakdown of useful KPIs depending on what your goals are:

1. Enhance Customer Loyalty KPIs
  • Customer Retention Rate: Measures the percentage of customers who remain engaged with the brand over a specific period (compare customers who are members in the community vs. those who are not or who are not active)
  • Repeat Purchase Rate: Tracks the number of customers (in the community vs. out) who make more than one purchase, indicating loyalty.
  • Net Promoter Score (NPS): Assesses customer satisfaction and loyalty by measuring the likelihood of customers to recommend your brand to others (within the community vs. out)
2. Leverage User-Generated Content KPIs
  • Volume of User-Generated Content: Counts the number of posts, comments, reviews, or content pieces created by users within the community (there are several ways to do this – you can use hashtag campaigns that are launched within the community in the simplest form)
  • Engagement Rate on User-Generated Content: Measures likes, shares, comments, and overall interaction with content created by users (this is especially useful to show how the community is creating “more engaging” content that is even consumed outside of the community/ raising more awareness about your business).
  • Conversion Rate from User-Generated Content: Tracks how often user-generated content leads to a desired action, like a sale or sign-up.
3. Feedback and Product Development KPIs
  • Number of Product Improvement Suggestions: Counts the suggestions or feedback received that are actionable for product improvement.
  • Implementation Rate of Suggestions: Measures the percentage of user suggestions that have been implemented – and follow this metric further with additional sales/revenue generated from doing so
  • Customer Satisfaction Score (CSAT) Post-Implementation: Assesses how satisfied customers are after suggestions are implemented. Useful to tell a more complete story on how you are attributing to customer retention
4. Customer Support and Self-Service KPIs
  • Number of Peer-to-Peer Support Interactions: Tracks the instances where community members help each other.
  • Average Resolution Time in Community: Measures the average time it takes for questions or issues posted in the community to be resolved.
  • Reduction in Support Tickets: Compares the volume of support tickets before and after community implementation. Further insights could include cost savings from not having to hire additional customer support, any reductions in customer support costs etc.
5. Increase in Organic Traffic KPIs 
  • Organic Traffic Referrals from Community Platforms: Measures the amount of organic traffic directed to your main site from the community.
  • Search Engine Rankings for Community Content: Tracks the SEO performance of community pages and content.
  • Bounce Rate for Traffic from Community Platforms: Assesses the quality of traffic by measuring how quickly visitors return to the search results.
6. Brand Advocacy KPIs
  • Brand Mention Volume: Counts how often your brand is mentioned within the community and on external platforms over time.
  • Advocate to Customer Ratio: Measures the percentage of community members actively advocating for your brand.
  • Social Share of Voice: Assess your brand’s visibility on social media compared to competitors, thanks to community advocacy. Community advocates are an ultimate competitive advantage for a business (they are difficult to replicate!).
7. Direct Revenue Streams KPIs
  • Revenue from Community Members: Tracks direct sales or contributions from community members.
  • Membership Growth Rate: Measures the increase in paid or exclusive community memberships.
  • Conversion Rate for Exclusive Offers: Track how well exclusive community offers convert into sales or actions.
8. Market Research and Insights KPIs
  • Number of Actionable Insights Generated: Counts the market or product insights generated from community feedback.
  • Innovation Rate from Community Ideas: Tracks the percentage of new products or features developed based on community ideas.
  • Customer Sentiment Analysis: Measures changes in sentiment within the community over time, indicating shifting preferences or concerns.
9. Networking and Collaborations KPIs
  • Number of Partnerships Formed through Community Connections: Tracks collaborations or partnerships initiated through community networking. Follow this further with how these partnerships have translated in business terms (increased revenue, reduced costs etc).
  • Community Referral Traffic to Partners: Measures the traffic sent to partner sites or collaborations through the community.
  • Engagement Rate on Collaborative Content: Tracks engagement with content or events produced in collaboration with partners or influencers.
10. Scaling Customer Education KPIs
  • Educational Content Engagement Rate: Measures how actively community members engage with educational materials.
  • Reduction in Basic Inquiry Support Tickets: Tracks the decrease in support tickets for basic questions that are addressed by community education.
  • Customer Proficiency Score: Assesses the increase in customer knowledge and proficiency in using your products or services as a result of educational efforts within the community.

Tracking the relevant KPIs can help understand the effectiveness of your community-building efforts.

You will be able to make data-driven decisions to enhance your community building strategies and achieve higher returns on your investment.

 

Final thoughts

Try to avoid wasting time looking at vanity metrics for your community. 
 
If you’re dealing with a larger organisation or a manager who is unsure how to actually measure your community, it is worth having an educational session using similar content such as the above to discuss measuring what has TRUE impact for the business.
 
Some of these KPI’s may feel impossible to measure.
 
I’ve had to get more creative in the past to figure out ways to measure relevant KPIs even when the platform didn’t have these metrics in their data dashboards.
 
Most of the times the analytics have not existed and I’ve had to figure it out.
 
It can be done it just takes some creativity and patience! 
 
This will give you greater leverage to increase funding for your community building efforts where needed. 
 
Let’s get to work.
 
Other blog posts:
 
 
 

I'm on Twitter & Youtube!

Leave a Comment

Your email address will not be published. Required fields are marked *

Community Coach Tips

Unlock Your

Copy Now...