Thursday, November 04, 2004

Communities of Practice ROI

Can one truly measure the return on investment on communities? I guess the answer is it depends. It depends on what the goals of the community are. This past month I had been tasked with return on investment proof for my community. The question specifically posed to me was not what is the impact of the APQC KM community but how or does the APQC KM Community impact the bottom line and how.

So I set out to find correlations between community members and their behaviors. My first attempt was at purchasing behavior. I took the names of my community members and totaled their purchases. I was able to prove that community members are active APQC product and services buyers. Then came the hammer. Would these people have made the same purchases were they not community members? Answer: Yes, possibly. This is the tough part. There is no way for me to tell how being in my community influences a purchase decision.

Next attempt was at membership tenure. Most of you know APQC is a membership based organization, so we live and die by our member retention rate. I looked at the list again and tried to determine how tenured these community members are. Same answer, community members are tenured APQC members. This time I put myself through the scrutiny; would these people have continued to be APQC members if your community did not exist. Same answer, I think so but I don't know for sure. I am not sure how being a member of my community impacts a decision for an individual to renew membership.

Back to the drawing board. I went back to my own advice. What was my community created for? It was created to add value to the membership. It wasn't created to increase revenue (although I wish I could say that it did). So I finally took this message to the management.

The KM community consists of tenured APQC members with purchasing power. I have several testimonials from community members that express this value sentiment. I cannot prove that my community makes them buy or makes them stay, but what I do want to try is to get them more involved and to expand the community offerings so that I can attract more members like these. Because my hypothesis is the more involved members I have the greater the probability of additional purchases and of membership renewal.

I did not ask for a lot of money. Just a little slush if I needed to travel to set up local chapters, a few technology dollars to incorporate this blog into the community site and an approval that I should continue to spend time on this community. (one of my proposals was to nix the community completely - my argument was if its all about the money then let's just not do it. But I know APQC, it's never just about the money, it's about member value, so I knew that was not going to happen:-))

I got all three. So I am going to spend the next couple months really setting strategies. Not just for my KM community but also for my Web site.

Now to the apology. I know I have been gone a while and some of you may have given up on me, but I was in way over my head trying to prove ROI (not just community, site and technology et al) and I had on request from Bill Ives gotten Amanda to conduct a blog review for me. It's pretty cool, she charges $100 and basically gives you some pointers on maximizing your blog.

That will definitely go in as part of my strategy for next year. Stay tuned for lots of changes and innovations from me. I'm crazy that way.

5 comments:

Stephane said...

Hi Farida!

I don't know if you still follow this blog, but I just wanted to get back in touch with you, after KM World... I hope everything's going well at APQC! Here at Cossette, I'm happy: the Fridge is very well received, and I'd be glad to tell you all about it very soon!

I don't think I'll be able to make it to the St, Louis conference, but drop me a line when you have a chance. I'm at stephane.ethier@cossette.com Talk to you soon!

- St├ęphane

Jim Lee, PMP said...

Hi Stephane,
So nice to hear from you. Things are busy as usual at APQC. I am involved in a study on communities of practice as a subject matter expert and will be traveling in the month of March. My regular work is also picking up quite a bit so I have been staying really busy. As you know I have been pretty delinquent on my blog not having found time to keep up with it. But its one of my goals this year so I had better get started.
I am glad "the fridge" is being well accepted at Cossette, I am going to use your case study whenever I can when I am speaking at conferences. I think the analogies are great.
Please do let me know if I can be of help.
take care
farida

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