I have seen lots of articles mentioning the value of having an online community, but nobody clearly explains how to calculate the actual return on investment (ROI). Kaustubh mentioned on Reddit that communities are the highest ROI growth asset any business can build. I’m curious. Can someone provide a simple, clear way to calculate community ROI?
Founder • 1w
Community ROI can be calculated using the formula: ROI = (Revenue from Community) - (Cost of Community) ÷ Cost of Community x 100%.
Here's how to do it practically:
Revenue from Community: Add up all income directly generated by your community. This includes membership fees, sponsorships, direct sales influenced by community interactions, referrals or any leads converted because of the community. Read: Make money from community
Cost of Community: Calculate all the expenses involved in running your community. Common costs include community platform fees, content creation expenses, moderator salaries, community management software, hosting / bandwidth costs etc.
Simply subtract total costs from total revenue, divide this by total costs and multiply by 100% to get a clear percentage.
Practical Example
Suppose your community generates monthly revenues of $10,000 through membership fees, sponsorship deals, and affiliate sales. Your monthly expenses for platform fees, moderator salary, content creation, and related costs are $2,000.
ROI (%) = (Revenue - Cost) / Cost × 100%
Example Calculation:
Revenue from Community = $10,000
Cost of Community = $2,000
ROI (%) = ($10,000 - $2,000) / $2,000 × 100%
= $8,000 / $2,000 × 100%
= 4 × 100%
= 400%
I hope this helps.
Member • 1w
Thanks Jennifer for asking — and Kaustubh for breaking it down so clearly. 🙌 I’d just add: beyond numbers, track non-monetary wins too — like product feedback, support cost savings, and brand love. They’re harder to measure, but often the real ROI of community.