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Evaluating the ROI of a Private Online Community - 8/13/2014 -


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Evaluating the ROI of a Private Online Community

Online communities aren’t the right fit for every association. However, since the platform is so flexible, the potential is vast. Bottom line: It’s worth investigating.

By Joshua Paul

Building community and generating member engagement fuel almost every business objective for your association. This includes producing research and content, advocating for your members, and continuing to provide education, support, and networking opportunities for your industry.

Without engaged members, your association has more difficulty efficiently serving its mission. In a way, your members define you. Members’ interests, participation, and support (in the form of time and revenue) make what your association does possible. The degree to which members are engaged affects everything from legislative wins to event attendance to member retention rates.

Even if you’re familiar with private online communities and their potential to increase member engagement in your association, convincing your executive team and board members to invest in such a broad platform can be a hard sell. There are certainly other options to boost member engagement, so why should you invest in a private online community?

Well, I can’t tell you absolutely that you should.

Online communities aren’t the right fit for every association. However, since the platform is so flexible, the potential is vast. Bottom line: It’s worth investigating.

Is a Private Online Community Right for Your Association?
In determining if a private social network is a wise investment for your association, there are two important factors to keep in mind:

  1. Will creating a member community solve your most important challenges?
  2. How can you clearly explain your strategy to the association's leadership?

While the many different uses for online communities are a strong selling point, they can also make the process of determining the best path for your association even more confusing. The last thing you want when pitching a private online community for your association is to overwhelm your board members with all the different goals that the platform can help your organization achieve.

To help you determine if a private online member community aligns with your association's top priorities, here are the top three areas where associations have found the most return of their investment in private online communities.

ROI Area #1: Increased Member Value
Back in 2011, a study found that the number-one reason members don’t renew their membership is a perceived lack of value. You never want your members to ask themselves, "Why am I a member?”

Just as your association is determining the ROI of creating a private online community, your members are also questioning the ROI of their membership. Each year that their membership comes up for renewal, they’re questioning whether the benefits your association has to offer are worth the membership dues.

  • Alignment with the things members want. Online communities align with what many members say that they value. They create opportunities for networking, grant access to exclusive content, and provide educational opportunities your members might not be able to get elsewhere.
  • The power of Metcalfe's Law. As your members receive value from your community, they’ll also bring value to your community in how they network and interact with each other. The connections members make and the discussions they have are often the most uniquely valued aspect of a private online community. Bonding with other members creates a sense of loyalty and responsibility to a community, which can also positively affect retention.

ROI Area #2: Member Engagement
Without member engagement, your association may struggle to get the revenue and retention rates you need.

  • Ongoing engagement. Rather than a conference that happens just once a year, an online community provides a year-round opportunity for members to connect with your association and each other.
  • Momentum. Engagement works as a domino effect — as more members become involved in your online community and your association, they’ll inspire other members to do the same.
  • Higher conversion rates. Consistent member engagement also allows your organization to maintain stronger relationships with members, so they’ll be more likely to convert when you need them to. After an event, for example, you may want members to provide feedback on a survey. Your online community provides a platform to convert them on calls-to-action.

ROI Area #3: Non-Dues Revenue
Beyond simply increasing engagement and offering more value, a private member community can also generate significant non-dues revenue for your association. In addition to standard advertising, your membership organization can generate additional revenue through your private online community.

  • Event attendance. Online communities help raise awareness and excitement for your events. And, your members will also look forward to attending and meeting the other members they’ve networked with through your online community.
  • New sponsorship opportunities. With an online community, your sponsorships won’t have to be limited to traditional offline event sponsorship.
  • Online vendor programs. Many membership organizations create programs that give access to your online community to companies in your industry. Partnering with vendors provides added value to your members while also generating more revenue for your organization.
  • Virtual membership programs. Creating a virtual community for members also opens the door to an option for virtual membership. If you have international members who know they’ll likely never be able to take advantage of in-person events, you can offer a discounted virtual membership and extend your organization’s reach.

At this time, creating an online community for members may or may not be the right strategicdecision for your association. When evaluating your options and setting your plan, keep in mind that private online communities have the potential to create meaningful value, maintain high levels of engagement, and open new revenue streams. These areas can help deliver an ROI for your association that can affect nearly every business objective you have.

Joshua Paul is senior director of marketing and strategy at Socious.


 

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