Community-Attributed Revenue (CAR): How to Measure the Revenue Impact of Your Community
Remember all that press about community marketing? How important it is? Well, it’s true (just like we always said). Does that make us oracles? Doubtful. Does it stroke our egos a little bit? Absolutely – we’re only human.
Chatting recently with a Head of Trading and an Engineering Technology lead, we learnt that they adored spending time with vendors and other customers. Bitching about stuff, influencing the roadmap, and generally learning. Standard community activities. Yet as we chat with vendors, it seems very few of you embrace community marketing.
Vendors that aren’t going in on communities to enhance their B2B marketing strategy are missing a trick. Community referrals, for example, are especially powerful. According to Captera, 61% of IT buyers state recommendations are the most important factor in swaying purchasing decisions, and 88% of B2B decision-makers rely on word of mouth for information and advice.
Compelling statistics. However, they mean nothing unless you can attribute some revenue to them. And so we come to the aim of this article; community-attributed revenue (CAR). How do you measure the revenue impact of your community?
Let’s talk CAR.
But before we dive in, we’ll address the meme – terrifying, isn’t it? Table your terror for a moment; it serves a purpose. These articles accompany our fledgling newsletter, #norocketships (scroll down and sign up there), in which the voice of our MD, Jamie Hancox, is often recognised. Same for these articles.
However, you have been duped. He doesn’t write it all! We have created a “voice” that means all of our content team can write in this persona. It’s a blend of Louis Theroux and Ross Kemp from Eastenders. We even made an AI image of their two faces, which turned out to look remarkably like Jamie. Those are the faces you see in the meme.
Why is this relevant? Because we’re holding a little competition. There are two Jamies involved in this enterprise; MD Jamie Hancox, and Copywriter Jamie Howden. Two Jamies, one voice. Which one do you reckon wrote this article? DM us on LinkedIn if you fancy sharing your opinion; Hancox here, Howden here.
Thanks for that little indulgence. Now, onwards.
What is a B2B technology community, really?
We’ve recently spoken a lot about communities within our little circle of vendor friends. Some, the ones who “get’ marketing, consistently tell us that building a community is vital. Others still don’t see the value in communities. Most don’t realise they already have one.
When we talk about communities, a dedicated space (like our own Commerce Futures community on circle) or a monitored WhatsApp group comes to mind. A well-formed group of people, gathering in a place where they can interact with each other about a shared commonality or characteristic. Whatever the product or service, people want to engage with companies where they already hang out.
Hm. Sounds an awful lot like your user groups, doesn’t it?
We don’t blame B2B businesses for overlooking this obvious fact. Frankly, if it doesn’t immediately impact your bottom line, it probably doesn’t exist for you. We get it. B2B vendors have viewed communities as a slow-growth strategy for a long time, but it’s a common misconception. All B2B technology businesses have communities. Whether they’re user groups, organic online user communities (think Redditers), or curated communities (in platforms like Circle or Discord), they do impact your revenue. And whether they’re discussing your brilliance or berating you for your shortfalls is irrelevant.
Whatever community you have, it’s worth nurturing it and building it up – even if that doesn’t mean creating a dedicated “community space” immediately. Community-attributed success can be difficult to measure, but it pays off; 72% of community-led deals closed within 90 days, compared to only 42% of sales and marketing-led deals. Worth it? We think so.
What is community-attributed revenue (CAR)?
“Revenue generated that can be traced back or attached to direct actions undertaken by community members.”
At its core, it’s not dissimilar to traditional marketing attribution models. Similar to how you would attribute success to specific B2B marketing efforts, in a community attribution model, you carefully track and analyse new revenue sources in an effort to attribute them to overall success.
However, community-attributed revenue is a little more nuanced. We’ll try and explain it through another short story (full of them, aren’t we?).
We (that’s a royal “we”, by the way) were stood at a drinks reception last month – very classy, very cool – with two customers. One of whom had previously said, “we [not a royal we] generated no pipeline from your events last year.” The other said (unprompted), “Commerce Futures was worth about £3m to me in 2021/22.”
The important thing here? That £3m wasn’t through direct action from our events brand. In fact, much of the success and business won by Commerce Futures’ clients come from the community of attendees that support it.
However, this conversation does raise an important point. These two are joined at the hip. If one wins, so does the other…and this got us thinking. What about the way these two attributed their spend with us differed? Why doesn’t every business track leads/opportunities/deals at touchpoints along the journey?
Vendors spend so much on account-based marketing (ABM) services like ours, paid search, trade shows and content services but so little on measuring through even a nine-month sales cycle. And so, community-attributed revenue entered our thoughts.
Side note: You could stretch the definition to include revenue from a business whose members engaged in your community (through Reddit, Twitter, wherever) before appearing in your “lead universe”. But we’ll stick with the simple, clearer-to-define view.
So, for the purpose of this article, we define community-attributed revenue (CAR) as revenue generated that can be traced back or attached to direct actions undertaken by community members. As opposed to tracking specific marketing efforts.
A community member referring your product/service to people they know who buy is a good example. Referrals and upselling are obvious places to track ROI. However, to truly measure CAR, you must dig deeper into things.
How to measure community-attributed revenue
Like any self-diagnosed “thought leadership” post, we have to tell you this requires a mindset shift. Now that you’re sufficiently enthralled by our apparent genius, we can dive in.
The key is to measure through the sales cycle and beyond. But you have to move your magnifying lens to the right places. We can think of no less than six actions/areas that your community (and, by extension, your community members) could engage in that have an attributable impact on revenue. The first four are simple to join the dots on:
Internal referrals (to other areas/functions of a member’s business)
People bringing you along when they move jobs
External referrals (sharing with their network outside of the community)
Upgrading existing/buying more of your software
With a little due diligence, the above are straightforward to follow. The last two are more nuanced but equally important metrics to track:
How community members Influence your product roadmap
Reducing churn
Number five feeds nicely into number six. Take your user expert’s requests for new functionality and capabilities seriously, give them what they want, and you’ll have an improved product and loyal fan base with comparatively little effort on your part. Other than listening.
You can then take it a step further and consider measuring how many touchpoints across the sales cycle community activities generate with leads. For example, you might meet the “lead” at an event, at the rugby, in the pub and over coffee. Each time you do, you become closer. Maybe you genuinely become their friend. And in return, they might give you additional titbits of information you can use that might lead to more conversations and more opportunities. Opportunities that may not have occurred were it not for your community.
Beyond ROI; how community attribution impacts your functions
Three to four years ago, much of what we spoke to our ABM clients about was the friction between sales and marketing functions. Our ABM services approach was built around nestling ourselves between these two siloes.
But B2B technology companies have come a long way. Vendors have put in some good work, and we hear less and less talk about friction between sales and marketing, about poor quality leads. It still happens, of course (especially for those relying on PPC to fill their MQL targets). But it happens far less frequently, and that’s the main thing. Much of this is down to the widespread adoption of target account programs.
But another rift has appeared - between customer success (CS) teams and the rest of the business. SaaS valuations are (of course) driven as much by customer churn as net new wins, so those targeted with retention have their own priorities, and often that is all about meeting ARR KPIs. And less about solving customer problems.
Enter customer communities. The overarching message of a community is to build a strong sense of trust with customers, which means encouraging them to talk to one another. This can cause B2B tech companies to look on communities with mixed emotions, giving mixed reviews. You might have a litany of fears stopping from dipping your toe into the frigid waters of the unknown. To name the big contenders:
Fear your community will become a quagmire of complaints
Fear you can’t control the discussion
Scary, right? Traditionally, it’s a difficult concept for SaaS teams to get their head around, but with this “mindset shift” we’re preaching, those fears fade into obscurity once you’ve done the work to see how much value communities can create. Perhaps it means an end to customers being at arm's length. Certainly, it will satisfy the CS team’s moly-coddling instincts.
Measuring CAR through the means above (and communicating to sales that just because it’s not an immediate lift in products sold, it’s still value), is the key to breaking down the final silo between CS and the rest of the business.
But it all stems on attribution. Flawless seque inbound…
Last issue of #norocketships (sign up to the newsletter by clicking on that link and scrolling down) we mentioned a possible meetup – a breakfast thing – to discuss attribution for marketing leaders within SaaS in particular. It’s happening.
If this topic interests you even slightly, it’s worth coming to. And with enough interest, we’ll run a working group to specifically discuss best practices for community building (and community attribution), too.
As mentioned, we run a thriving community ourselves – one that we have no trouble attributing revenue to. We’re always happy to talk shop (to talk at all, really) – so don’t be shy, drop us a line and give our eager beavers at the other end the chance to bend your ear.