As a community manager, you want greater collaboration with your internal teams and support in advocating for additional investment. To do that, you need ways to show them how community work also helps them achieve their goals. It's the essence of community building—bringing people with you and connecting on what matters to them—and it applies to internal teams as well.
It's important to take the time to understand what matters to each of the teams you talk to. Joshua Zerkel at Asana makes this the basis of his internal roadshows—understanding what matters to his audience based on what goals they're trying to achieve. For marketing teams, it might be expanding the reach of relevant content and raising brand awareness. For product teams, it might be addressing product feedback and understanding feature requests. For stakeholders who need to deliver business metrics, revenue is often a compelling data point. That being said, only 10% of community professionals cite an ability to financially quantify the value of their community (see the 2022 Community Industry Report).
We’ve previously covered the technical considerations for evaluating tools and shared a roadmap to build your tech stack to support your community through its stages of growth. In this article, we’re going to dive deeper into what community-attributed revenue is and how to measure it, so you can concretely demonstrate the impact of your programs in terms more easily understood by your cross-functional stakeholders and executive leaders.
What is community-attributed revenue (CAR)?
At Common Room, we define community-attributed revenue (CAR) as revenue from an organization whose member(s) engaged in the community before they appeared in your CRM or Marketing Automation system (like Salesforce, HubSpot, or Marketo. For ease we’ll call it CRM below). By “community engagement,” we mean interactions with your community through any of your platforms (see our list of source integrations for more details). For example:
- Posting or responding to messages on a chat platform like Slack or Discord or a forum like Discourse or Stack Overflow
- Creating an issue in a code repo like GitHub
- Tweeting or posting comments on social media like Twitter or YouTube
- Attending your events or webinars
We call organizations who meet this qualification criteria as community-first organizations. Now we have a working definition of CAR, but how do we measure it?
How to measure community-attributed revenue
We’ve distilled the process of measuring and reporting on CAR down to three steps: 1) identify your community-first organizations, 2) calculate revenue metrics from those organizations, and 3) analyze data trends over time. We’ll explore each step in further detail below.
Identify community-first organizations
The first step in this process is to identify the organizations whose revenue qualifies for community attribution. Start by pulling one list of all the organizations represented in your community and one of all the organizations recorded in your CRM. Then, compare the two lists to identify those organizations who exist on both lists and were first seen in the community before your CRM. Those organizations are the ones who qualify for community-attributed revenue—they are your community-first organizations.
Calculate revenue metrics
It’s time to calculate revenue metrics associated with your list of qualified organizations. Here you want to highlight data points illustrating the size and value of the business impact these organizations are having. To start, consider the following stats on an annual basis:
- Revenue: Total recurring revenue
- Opportunity: Total opportunity size
- CAR orgs: Total number of organizations who qualified for community-attributed revenue (and what percent of all customers they represent)
- Paying orgs: Total number of paid licenses / seats used by these organizations (and what percent of all licenses / seats they comprise)
You’re on your way! With these metrics calculated, you’ve begun to quantify the business impact of your community programs. But to really understand if this impact is trending in the right direction 📈or if it’s an exception, it’s helpful to look at the data over time and filter by specific attributes to determine the underlying drivers of success.
Analyze data trends over time
Now it’s time to dive deeper into the revenue metrics to see what kind of trends you can identify and what the key success drivers may be. To uncover these types of insights, consider answering the following strategic questions and see how it changes over time:
- Is revenue from community-first organizations increasing?
- Is the opportunity size of community-first organizations growing?
- Does it take less time to convert opportunities from community-first organizations?
- How does the share of revenue and opportunity size of community-first organizations compare to that of CRM-first organizations?
- Are there certain organization-specific attributes to community-first success, such as:
- Firmographic, meaning the characteristics of a firm or company, such as annual revenue, employee size, or industry?
- Geographic, for example, are there certain cities / states / countries where revenue is more attributable to community-first organizations?
- Product usage, for example, are certain types of product behaviors or interactions performed more frequently by community-first organizations?
- Team functions, for example, are specific functions (Marketing, Product, Sales, Customer Success, etc.) more likely to see the value in your product and pay for licenses?
With this analysis in place, you can see if there are positive or negative trends as it relates to CAR and then use those insights to determine the business impact of your programs. For example, revenue and / or the opportunity size of community-first organizations trending upwards over the past few years is clear evidence that your community programs are having a positive impact. If the share of revenue attributable to community-first organizations is greater than the share attributable to CRM-first organizations, that’s another positive indication.
As it relates to understanding what is driving the success behind CAR, organization-specific attributes can help identify key levers. Look for any commonalities from a firmographic, geographic, product usage, or team function perspective from your community-first organizations. For example, it could be that CAR tends to come from organizations with 51-100 employees or from certain product usage patterns. You can dive into why these attributes are contributing to success and share these learnings with your cross-functional colleagues so they understand the impact of your community programs and can grow practices that help replicate that success with other customers.
End-to-end community attribution
By investing in the tools and processes to calculate community-attributed revenue, you’re pioneering an end-to-end customer community journey—one where you’ll be able to understand a member’s experience engaging with your community and track their journey from when they start using your product through to how much revenue they’re responsible for. We built Common Room to empower you to measure this end-to-end attribution to earn buy-in from key stakeholders so that you can set up your community programs for long-term success.
Common Room is the industry-leading intelligent community growth platform. We allow you to instantly connect your community engagement across all channels—including product usage and revenue data—to unlock intelligent insights that let you take action to grow happier customers, measure outcomes, and drive business impact. Ultimately, we want you to build better products, deepen relationships, and grow faster, and your ability to do that accelerates when you can earn executive buy-in for community investment. For more, read how our customers like Asana, dbt Labs, Moov, and Temporal are using Common Room to build stronger communities and drive business impact.
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