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The Value of Community Management

by Rachel Happe on January 28, 2010

Most community managers know that the discipline has worth (i.e. significance) – our experience shows us that communities without community managers are much more likely to die off, go off track, become thorny stews, or get so insular that they can’t grow or evolve. For sponsoring organizations who want something fairly specific to result in their community initiative then, not having community management comes with some degree of risk. No one expects the Spanish Inquisition, after all – or for your employees to stick cheese up their nose and post the video to YouTube or whatever your community members decide to do next. Not having someone on top of that can lead to some unexpected surprises. So having a community manager is definitely worthwhile.

However, much less work has been done on analyzing the value (i.e. financial benefit) of community management. This is partly due to the maturity of understanding the value of online communities in general and partly due to the fact that it is almost impossible to run a scientifically valid comparison of two communities because no two communities – or community managers – are the same. Taking one community without a community manager and comparing it to a community with a community manager will allow one to observe qualitative differences in behaviors but it is not an apples to apples comparison needed to get at a specific dollar value. Communities are complex systems that defy easy analysis.

Tom Humbarger is one of the few people who has done an analysis of community activity with and without a community manager and the activity drop off, while not a cliff, slows significantly in a fairly short amount of time.

I’ve included his chart here because it is a striking example but his post has more specific stats that are worth checking out. It’s one of the only examples I’ve seen of this type of analysis.  To get at value you would have to compare changes in activity to changes in outcomes (support calls, online mentions – whatever the community’s prime purpose is) for various periods. Regardless, it’s easy to see the cost of community management against community activity and have a good understanding of what type of investment is needed to get the type of activity desired.

We are actively looking for others who have done some type of analysis on the value of community management – if you have a case study that you are willing to share – publicly or confidentially – we are looking to help community managers and executives understand how to think about the value of community management.  Some approaches we are seeing to understand this value are social network analysis and systems dynamics modeling but both require an advanced understanding of the approach to effectively use.

We’re also going to tag a few community management experts here in the hope that they’ll contribute to the conversation and give their thoughts on how to assess the value of community management: Rawn Shah of IBM, Connie Bensen of Techrigy/Alterian, Ken Burbary of Ernst & Young, David Alston of Radian6, Erin Liman of SAP, Rachel Makool, Michael Brito of Edelman Digital, and Dawn Lacallade of SolarWinds.

If you are community manager, how do you think about and demonstrate the worth or value of your role? Please keep in mind, just because value cannot be assessed does not mean the investment is not a sound one. We invest in worthwhile things all the time – political campaigns, charities, sports, relationships – so we’re not suggesting every community management investment needs to be able to assess value but it is something that some communities will be able to track.  For others, being worthwhile will be sufficient.

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  • http://tomhumbarger.wordpress.com Tom Humbarger

    Rachel – thanks for the shout-out and for trying to get more case studies on the importance of community management.

    Tom

  • http://www.livinginhd.com/remixcity Kairy Walker

    Rachel,

    This is a great article as Tom points out but it seems to me that executives and other investors have a scarily short memory. Motivated individuals, website developers, CTOs and others have been advocating sound community management for years. Sure it was a electronic bulletin board or a listserv or heaven forbid it was something that has long since died and gone to technological heaven and historical reference. It manifested itself in another form but it requires the same discipline and leadership.

    Community managers should have an easy time getting the audience, the support and buyin for their work. If your sponsoring organization is giving you a hard time it just shows how much they do not understand.

    As a web designer and technologist I’ve been waiting for social media with all the networks and applications for years. It took too long and it’s still a bit shiny but seriously, the net result should be strong support for community management.

    Let’s have a country with no NGOs, government, military and police and see what happens. It’s not just chaos, it’s just pointless.

    More power to all the community managers out there! I salute you! We need you!

  • http://www.community-roundtable.com Rachel Happe

    Hi Tom –

    Your blog post is a critical part of letting people really ‘see’ the result of not having community management – critical for many people to start to even have a conversation about the importance of community management.

    Kairy – Thanks for your comments. This is definitely where the ‘worthwhile’ becomes obvious but traditional organizations don’t necessarily acknowledge that they even have a role to play in the wider network. It’s somewhat similar to a small country like Somalia saying, well… we know our pirates are causing a lot of trouble internationally for others but we just don’t have the money to deal with it. In many ways they have a valid point but it sure would be useful if they would at least cooperate in their wider network to allow those with resources help them. Companies have gotten to ‘ignore’ the externalities that they’ve created for a long time but I believe that the social web is exposing those and forcing them to more directly address them.

  • http://www.thwack.com Dawn Lacallade

    I don’t think this is a unique challenge to the Community Management audience. I think other project management professionals have had this same discussion about why to hire and the benefit of hiring someone with the background and skills to make it happen. Perhaps these other professions have some data we can review for applicability.

    I have found that when a company contact me with the “do we need a community manager” question, it is simple to answer. I ask them a handful of questions about their strategy, goals, implementation planning and legal considerations and in most cases they can quickly see why having an experienced Community Manager is a great benefit.

  • http://www.community-roundtable.com Rachel Happe

    Thanks for your perspective Dawn and the project management analogy is a good one – I’ll look around in that area to see if any studies have been done. I would imagine in that field there may be some cycle time or quality surveys that may have been done. And I’m with you that in many cases it becomes obvious that a person at the helm is a good thing, but with 60% of sponsored communities lacking a community manager (recent ComBlu research), we’re just hoping to nudge some companies into considering what they are missing because of that gap.

  • http://www.community-roundtable.com Rachel Happe

    We received some very specific data from a B2C company that has a community for each of its product lines. They are seeing an average 7.8% conversion rate across their communities as a result of community management interaction (they do not advertise per se in their communities so the conversion is the result of conversations/interactions). Looking at their numbers, I’m estimating that they get a ~2x return on expenses (software, headcount, content). They ask that their name, industry, and data be kept confidential but were happy to share the general stats and the ROI estimate is mine, not theirs so take it with a grain of salt.

  • http://www.community-roundtable.com Rachel Happe

    Rawn Shah offered his excellent perspective here: https://www.ibm.com/developerworks/mydeveloperworks/blogs/rawn/entry/value_of_a_community_manager16?lang=en

    Rawn talks a bit about pattern analysis and how that equates to functional transactions that are repeated. That is a great way to think about the position – what are the patterns/outcomes that are facilitated on a repeatable basis. Each can be a unique interaction but the pattern is the same: answering a customer question, creating content that educates and gets shared, collaborating on product designs, etc.

    Rawn also just released a book on Community Management that is worth checking out: http://www.amazon.com/gp/product/0132357798/

    Thanks Rawn!

  • http://www.sueontheweb.com Sue

    Four months ago I started sending out a “personal” email, at the end of each month, to all our new members who had joined our community but had not posted. In many cases I’ve found out they were just too scared to start posting, or didn’t know how. As ours is a fairly large community (over 115,000 members) I think many of our new members felt a little intimated (like they were arriving late to a party). Since reaching out to them I have seen an increase in new members participating instead of lurking (knowing that I was around if they got stuck). However, I haven’t yet been tracking those stats closely. Your post is spurring me to look again, and try and record certain activities that I engage in and compare it the reactions and responses. So thank you very much for highlighting this.

  • http://www.mizzinformation.com Maggie McGary

    Trying to get Snagit to work so I can send you a snap like Tom’s of traffic to my organization’s website from Facebook and the plunge it took when I left and there was no community manager on staff for a month. There was a very distinct plunge in traffic, and a definite increase to former levels once I returned. This is just one measure, I realize, but I think that anyone would agree that increase in web traffic is a tangible measure of value. With a community manager on staff populating our Facebook page with content, Facebook is consistently about #15 of over 10,000 sources of traffic to our website.

  • Susan Zellmann-Rohrer

    While managing communities at Communispace, where there was intense daily enagement and activity/content generation, I saw B2B communities with well over 50% active participation. These communities were private, branded and highly purposed. Members told us that it was the intensive interaction, the high level of relationship building driven by community managers, that they most appreciated. You can access a number of whitepapers on the Communispace site that detail the approach and impact of highly engaged community managers on ROI.

  • http://www.community-roundtable.com Rachel Happe

    Hi Susan -

    Thanks for the pointers – not sure if the it gets at exactly what I’m specifically looking for (i.e. the value of the community manager/s in numerical ways) but very interesting none-the-less.

    I found these two particularly interesting: 10 Best Practices for Managing Online Communities – http://www.communispace.com/research/abstract/?Type=All%20About%20Communities&Id=31

    Size Matters: When Insight is the Goal, Small Communities Deliver Big Results – http://www.communispace.com/research/abstract/?Type=All%20About%20Communities&Id=39

    Both of these infer strongly that the community manager is critical.

  • http://giatalks.com Gia Lyons

    One thing I’m learning from my clients is that the value of the *community* must be established before valuation can be placed on its management. For example, if there is no clear business objective for the community, it’ll be rather difficult to prove you need a manager.

    So, the converse of that is this:

    If you’ve established business objectives for the community (e.g., reduce lead-to-conversion time, improve industry thought leadership, reduce number of bug defects, increase rate of product releases, innovate products from a more customer-centric view, enable partner-to-partner collaboration, etc.) and measurements of how the community impacts those business objectives – which need to be benchmarked before the community “happens” – then business value can more easily be placed on the community manager role.

    Piece of cake, right? ;)

  • http://communityorganizer20.com Debra Askanase

    Rachel,
    What a fabulous discussion! I want to add the social media strategy perspective: I’ve seen Facebook Page interactions (from Facebook Insights) drop from the 20s to 1 when the company stopped interacting and began auto-feeding articles to Facebook. I’ve seen organizations’ Twitter activities die down to nothing when the organization stopped interacting on Twitter. I’ve also been part of Linkedin groups that were poorly managed, leading to excessive spam, group member flight, and decreased value of the group. These are also communities, and they failed without good community management.

    The statistics you offer (in the comments, and via Tom’s blog post) are powerful reminders of the value of personal brand shepherding and that people are in groups for the interaction. If communities didn’t offer the interaction and insights that come from the community manager’s activities, then, your statistics show that they would experience significant decrease in ROI, and community engagement. I venture to say it is the same in branded social media spaces, such as a company’s Facebook, MySpace, Linkedin, YouTube, or Twitter presence.

    Look forward to the continued discussion, research, and insights!

  • http://www.independentsector.org Will DeKrey

    I know we may be focused on online communities here, but I think the great work the Barr Foundation has done around measuring the impact of community managers / network weavers among nonprofit organization offers great insights for this discussion. Check out: http://www.barrfoundation.org/resources/resources_list.htm?attrib_id=9534

    And, specifically, the foundation’s report on “Building the Field of Dreams” (http://www.barrfoundation.org/resources/resources_show.htm?doc_id=506208) provides a great framework for examining the structure and productivity of a network both prior to and after the integration of a manager/weaver. I think certainly lit like this could help inform frameworks for measuring online community management.

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  • http://www.isismaternity.com/blog Cindy Meltzer

    I’m a latecomer to the conversation but I really love what you are doing here. I have some pretty compelling graphs/stats from Facebook showing the effects of active engagement, which I began when I was transferred into the role of Community Manager. Our senior team was impressed (after seeing the numbers, our CEO asked, “what did you DO?”) and it confirmed their (wise) decision to create the CM role full-time within our company.

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  • Donna Garber

    Hi!
    Do you also have a set of job titles/roles/descriptions that describe the responsibilities and the differences between Ambassadors, Evangelists, Moderators, Gardeners, Managers, Sponsors, etc.?

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