How To Calculate ROI For Support Communities

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Community ROI

Yay, you made it over the hurdle to convince your executive sponsor(s) to start a community for your product. Congrats! It might even be super successful and your analytics are on point, but the big dreaded question is coming your way. Show me the proof that the community is contributing to the company’s bottom line.”

We can argue back and forth, whether showing ROI on support communities or social care is the right measure for the value of your activities, but let’s leave that to another blog. Today, I want to focus on the need to calculate ROI. Because after all, that is still THE THING for justifying a community or even resource needs to grow.

Community ROI

So what is your Return on Investment for your community? If you are one of the lucky ones who manages a support community, this post can give you some real hands on (and hopefully simple) calculations to help you show the superficial ROI and value of your community. If you are very experienced, than this blog is not for you. It’s more like an ROI 101 for beginners.

If you are a community manager of a non-support community (say an engagement, product, acquisition or advocacy community) than this post will still probably help you some, and most definitely send you to the best industry articles you can ask for.

I was inspired to write this post because there are so many amazing calculators and calculations out there on how to show ROI on your community. But they all have a flaw. I find them overly complicated, involved and hard to make work unless you have all the requested data points at your fingertips. Here take a look for yourself:

In a recent presentation I shared a couple of simple ways to calculate ROI for social customer care initiatives and support communities. Click here for the slides and the workbook.

But let’s start at the beginning.

Why Have a Support Community?

At the previous companies I worked for (mainly tech companies) the goal of the community was to provide a self-serve platform for customers and future customers, to find re-active solutions to customer problems and inquiries. The community also provided pro-active content such as training, documentation and peer feedback, product reviews. The foremost benefit to the company were these (in order of priority):

  1. Call and support case deflection
  2. Customer retention
  3. Upselling/ Cross-selling to existing customers
  4. Shortening the sales cycle
  5. Increasing customer advocacy and loyalty

While every one of these is important and ultimately contributes to your bottom line, to keep your initial ROI calculation simple and executable. Let’s focus on #1.

Call Deflection

If you have not been living under a rock, than you might have noticed that support costs are skyrocketing in the tech industry. Basic Gartner and Forrester research shows that call center, chat and email support can be up to 100x higher than that of web based self service support.

 

Forrester Customer Service Cost

Forrester Research (North American Technographics® Customer Experience Online Survey, Q4 2010)

 

Gartner Study 2005 (Customer Service Cost)

Gartner 2005 study: Average Cost of Customer Service

 

I am sorry I don’t have any newer statistics than these 2005 and 2009 reports from Gartner and Forrester respectively, turns out they stopped measuring (or publishing these data points). I highly encourage you to work with your operations team to learn about your own cost of customer service, so you can make your ROI calculation unique. Alternatively try using industry data.

Standard Data

Assuming that we are looking at the Gartner report, each call into the call center costs $4.50. My company manages roughly 8 million calls a year (based on 2017 data) ….. That would costs us over $36,0000,000 based on these statistics. Now think about the impact of deflecting just 1% of those calls to say social media. Even at a conservative $0.65/ case estimate (based on Gartner 2013 reports), you are talking about 80,000 cases. That’s a grand total of $52,000 and a net savings for the company of $308,000! Still not convinced. Let’s look at real data.

FinServ Company Data

At my current company, each incoming call to our call center costs us roughly $10 per call. Since we manage roughly 8 million calls a year….. That costs us over $80,0000,000/ year. Now think about the impact of just deflecting 1% of those calls to say social media. We estimate that our social care cost per case is roughly $2 per case. It’s pretty high, but we are a financial services company and our systems are (let’s just say) old. So let’s go with the $2 estimate.  At a 1% deflection you are talking about 80,000 cases. That’s a grand total cost of $160,000 and a net savings for the company of $640,000. Pop the champaign!

Now let’s be a bit more daring. Our latest customer call reports show, that about 18% of all incoming calls are repeat, easy to solve issues. Imagine deflecting 18% of our existing calls by providing useful community content or easy social care interaction. I won’t even do the math, I am not sure I can handle that kind of mic drop moment. (ok. I did do the math, it’s $11.5 million dollars saved annually)

What Can You Do?

Your number one priority should be to build friendships across different teams that can help you not just execute an excellent customer experience, but also make sure to measure your success and have accurate data. Most companies I have worked for, lack customer operations data for web-based customer service. If there is anything I would urge you to do now, it is checking what data sources you have, what are your gaps, and making a plan on how you can plug them. Accurate and easy access to data is key. Here are the things I would ask you to get started with (industry wide or your company’s specific data):

  • Current volumes and cost of ‘traditional’ customer service (call, text, email, chat, etc.)
  • Current volumes and cost of ‘digital’ customer service (community, social care, in app)
    • Volume of questions posted or resolved on your community/ social media
    • Cost of staffing for digital customer service channels
    • Trends of top performing content on your community that are related to customer service issues (deflected calls can be measured by video views or blog articles that have step by step guides of “fixing” something)

The Future of Support Communities

Aside from case deflection of course you also have to consider growth in your customer base, so call center volumes may still go up while you are also deflecting calls by providing a helpful community. So it’s a bit more tricky than that.

Any forward-thinking company who needs to streamline their support services thinks community first. Community is a spot for peer to peer help, case escalation, public documentation and training. It’s a platform where a one-time publication or case resolution can reach thousands, sometimes even millions. It will deflect future calls about the same issue from new customers and old customers alike.

We have always made a conscious effort to monitor our support ticket system, to find repeat questions that we can be turned into community content. That content is then surfaced on the community with a public setting in many shapes and formats, such as videos, blogs, AMAs, or simple conversation threads. Both, community members and support agents can later reference those content pieces when answering questions and thus form new habits in your customers, by instilling in them the need to search the community first. This content is of course also google search engine indexed. That way, customers or future customers who search the world wide web for their questions first, might never even need to pick up the phone or send an email.

It is my believe that the only successful way to scalable business growth is by enabling collaboration amongst community management, social customer care and customer service teams and asking them to work towards a single goal, that of outstanding customer experiences.

If this was a bit too much to digest in one go, check out the presentation slides and the workbook.

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