R-O-Why? For Communities, Profit Can Come with Purpose

Businesses have been supporting and building communities for as long as I can remember. Historically their focus was to invest locally, contributing to well-being and economic opportunity in the places where they had a business presence. Today, the power of community is no longer limited to geography. Since joining Facebook (now Meta) in 2014 to lead the Community & Impact Partnerships team, I’ve seen digital communities run by community leaders, nonprofits, and even businesses that have been able to foster authentic connection and a sense of belonging far beyond their local borders. And in doing so, they’ve made a profound impact on the people they serve while simultaneously growing their organizations, proving that you can do well while also doing good.

It’s Time to Talk Community ROI (CROI)

Community can create incredible social value but the reality is it requires investment, so it also has to drive business goals. Do you have a Go-To-Community strategy to complement your Go-To-Market strategy? Does your community kick off your company’s marketing/sales flywheel? What’s your CROI (Community ROI)? Those are the questions Lolita Taub, GP at Ganas Ventures and guest speaker at Meta last month, asks when deciding whether to back an early-stage community-driven company.

But how exactly do you measure the value of community, especially in business? It’s a key question that our ever-growing field is working to answer. In fact, according to CMX’s latest Community Industry Report, 9 out of 10 community managers aren’t able to quantify the return on investment of their communities. Interestingly, almost 40% of respondents reported they could map their community’s data to their CRMs. So why is there such a gap in understanding ROI?

In our work with brands building communities, we’ve found that the most effective communities first focus on answering a fundamental question: Which business objectives are you driving? Defining a clear purpose (business goal) for your community will inform who you bring into your community, your content strategy, and your measurement strategy.

At Meta we’ve developed a Community ROI framework that helps businesses get this right up front. We’ve broken down possible community objectives into three buckets that track how your business can earn, grow and learn: Revenue, Operations, and Insights (ROI for easy recall).

Meta’s framework for designing a community that drives business outcomes

The activities under these pillars are directly aligned to help you measure a community’s return on investment, whether it’s through generating more income (Revenue), saving costs and finding operational efficiencies (Operations), or using insights to amplify your business and brand efforts (Insights). By identifying which objectives to prioritize, brands will be better equipped to design their community for business impact and identify tangible value.

You also need a strong foundation of engagement and trust in your community to make any of those business outcomes possible. We also believe that communities create rich opportunities to drive social value and we’ve see so many great examples of this in the industry today.

So, Who’s Doing It Well?

Let’s take a look at a couple of examples of some strong brand communities and how they align to the framework above:

The Marriott Bonvoy Insiders community launched in April 2020 just as COVID-19 was deeply impacting travel. It took them 12 months to grow to 20,000 members and then just 3 months to reach 40,000. Today they’re at 100,000 members and counting.

The community is full of devoted brand advocates who are fostering connections with fellow travelers and sharing their best travel (and Marriott Bonvoy) tips, all while continuing to give the company valuable feedback about the loyalty program.

Under Meta’s ROI framework, the community is designed to achieve two things:

1. Operations — Customer Success: Bonvoy members leverage the community to learn how to get the best out of their memberships, especially around earning additional points and sharing travel tips.
2. Insights — R&D: The community is a source of regular feedback so Marriott can continue to improve their program to meet their customers’ evolving needs.

The community is deeply engaged (every post has peer engagement), and Marriott also drives social value through sharing resources around donating points to charities. In response to the Ukraine conflict, Marriott matched donations to World Central Kitchen and UNICEF from Bonvoy members point-for-point, up to 100 million points worth $400,000. And as of April 8, 46 million points had been donated.

Tonal, a high-growth fitness startup, launched the Official Tonal Community in 2018 to help customers optimize their Tonal experience. Since then, the community has returned the favor by helping Tonal optimize its product.

According to a recent study, Tonal found that community participation drove higher product use and member satisfaction.

Under Meta’s ROI framework, the community is designed to achieve two things:

1. Revenue — Increase LTV: Official Tonal Community’s most active members work out with Tonal 50% more than the average user. The most active users also have a higher proportion of members who say they’d be very disappointed if they could no longer use Tonal (18 percentage points higher), and who would recommend Tonal to others (22 percentage points higher).
2. Insights — R&D: The community gives Tonal feedback on a weekly basis to improve its product and offerings. Several ideas from the community have since come to life in the product; from live workouts and form feedback to Apple Watch integration and workouts specifically for those with mobility restrictions.

Perhaps most importantly, the Tonal community is a place where members support one another on their fitness journey, offering positive reinforcement and celebrating each other’s achievements.

What Does Community ROI Mean To You?

At Meta we have multiple global programs with communities dedicated to gathering rapid product development feedback, while others are focused on helping our top community builders drive more engagement on the platform. The programming, incentives, and community culture vary depending on each use case.

The ROI of community today is just as meaningful and powerful in ways that are both concrete and intangible — particularly in the social value it can drive. I’m excited about this global community that we’re growing together and the conversation this post might spark.

I’d love to find out what Community ROI means to you and your business or organization. Please share your comments, ideas and experiences!