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other business initiative in order to be able to calculate the return on the company ’ s
investment.
One way of measuring value is to calculate the additional value that a community
member represents in comparison to the average site visitor. For example, in a trans-
actional Web site, if a community member purchases twice as much per month as the
average user, then the community is generating additional revenue. Similar compari-
sons may be made with respect to usage for noncommercial sites. It appears that
communities that are actively managed have higher participation rates and conse-
quently bring greater value to the organization. Most companies lack experience in
community management and will have to fi nd resources that can possess the neces-
sary expertise, processes, tools, and infrastructure to get the job done.
Community development costs may be based on hardware and software costs (one-
time and ongoing), community strategy development costs (one time), and the
ongoing community management costs. Benefi ts other than usage are much more
diffi cult to assess. For example, the benefi ts of the closer relationship that builds
between the community members often leads to higher employee retention rates.
Organizational learning is likely accelerated and process effi ciencies attained as a
result, but it is diffi cult to quantify these valuable outcomes. Another example would
be the power of viral marketing or word of mouth that uses a community as a conduit.
Such recommendations would be much more targeted, relevant, and add to that the
fact that they come from trusted peer sources. In this case, the outcomes would be
much more favorable in terms of the internalization and application of this shared
content.
Another approach is to attempt to measure the value of the social capital that has
been produced as a result of the knowledge sharing. Social capital has been measured
in a number of innovative ways, though for a number of reasons obtaining a single
“ true ” measure is probably not possible, or perhaps even desirable. Measuring social
capital may be diffi cult, but it is not impossible, using different types and combina-
tions of qualitative, comparative, and quantitative research methodologies ( Woolcock
and Narayan 2000 ; Sveiby and Simons 2002 ). It is especially challenging because social
capital is comprised of concepts such as trust, community, and networks, which are
diffi cult to quantify. The challenge is increased when one considers that the quest is
to measure not just the quantity but also the quality of social capital on a variety of
scales. A useful form is that of a story or vignette of success due to the existence of a
knowledge-sharing community, such as the one working toward a cure for SARS.
It may also be possible to adapt methods used in measuring social capital of coun-
tries or societies. For example, in his research comparing north and south Italy,