In one of his more recent posts, FastForward colleague Jon Husband urges organizations to look past traditional return on investment (ROI) measures in today’s Enterprise 2.0 organization, because there are many intangibles that bring value to the organization. Return on Investment in Interaction may be a more effective measure, he says.

Straight ROI is difficult in Enterprise 2.0 environment, but there are some areas that can potentially be measured, as illustrated by Forrester analyst Natalie L. Petouhoff, Ph.D., in a recent study titled The ROI Of Online Customer Service Communities.

The report observes that online customer service communities are now maintained by a host of mainstream companies, including AlterPoint, DIRECTV, Intel, and Verizon. Natalie and her team spoke with some of these early adopters, and concludes that many are delivering an attractive ROI within “a short period of time while delivering better customer experiences.”

Natalie and Forrester modeled some ROI estimates on a hypothetical company with 500,000 customers that receives approximately 30,000 calls per month. In the report, she calculates that over a three-year time frame, such a typical company will probably need to invest approximately $1.2 million for a well-functioning online customer service community.

That million-dollar-plus outlay accounts for expenditures in the following areas:

• Technology: Building the Web site; creating user registration and sign-in procedures; integration with sales and marketing systems; integration with knowledge management system; search capabilities; yearly license fee for a leased platform; analytics package to measure key performance metrics; reporting capability for analytics.
• People: Project manager; community manager; IT resources;  training.
• Process: Marketing and launch promotion for the community; creating community plan and policies;  ongoing marketing and promotion to continuously engage super users and community members.

Interestingly, many inquiries and issues formerly handled by paid customer service or tech support representatives will be offloaded to super users within the community, Natalie suggests. This also fits Jon’s premise for Return on Investment in Interaction.

The estimated payback in benefits will be seen within the first year, Forrester estimates. The analyst firm’s model suggest that the first-year outlay for the hypothetical company will total about $500,000 in start-up costs, but will return about $900,000 in benefits. Benefits will continue to accrue at about $900,000 a year in the years after than, while annual costs will run about $400,000.

The measurable benefits identified by Natalie include a reduction in agent-assisted interactions, an increase in first-contact resolutions,  increased agent productivity,  a reduction in agent-assisted email, an increase in product ideation, an increase in relevant Web site content and reduced search engine optimization (SEO) costs, an increase in customer retention and customer lifetime value (CLV).