The Return of Investment of Social Technologies

Over the course of all the posts I have published on this blog I have discussed the many reasons why social media and enterprise 2.0 is a viable tactic in the business world when it comes to building a customer base and marketing products. What I have yet to discuss is the financial return on such an investment. The importance of a financial incentive for implementing enterprise 2.0 and included social technologies is so businesses seek out these methods and stick with them. Return of Interest is calculated to determine the total profit returned from an implementation, it can be found from the following equation:

return on investment (%) = (Net profit / Investment) × 100

As an example, say a company earns a Net profit (Gain-Cost) from their marketing strategy to a total of $100,000. For the example lets also say they had an Investment of $50,000 and that the point from implementation to evaluation is 6 months. If we calculate the ROI as below:

ROI = (100,000 / 50,000) x 100

ROI = 200%

In this example the company had a return of 200% of their investment within the 6 months of their marketing strategy. This is a successful ROI as the company doubled their investment. Many factors have to be taken into account when calculating the ROI, every cost and profit needs to be weighed in for evaluation otherwise the company could get a untrue ROI.

Onto a real world case study, I am sure many of you may have seen the youtube videos 'Will it Blend', if you haven't then follow this link. What you may not know is that the series is funded by BlendTec who sell blenders. Upon uploading videos of their blenders destroying just about anything to social media website Youtube they noticed a significant jump in sales. Blendtec reported a 700% increase in sales soon after their Youtube channel launched. Now as Blendtec has not published their finances online we can only exaggerate their ROI. As their sales went up 700% from publishing a few 2 minute videos online the ROI must have been at an immense percent.

An Estimation of their ROI:

Before sales BlendTec was your high-end blending company maybe selling 10,000 units a month in the US. Each unit would have been sold to wholesalers at around $80. This gives them an annual sales profit for their medium sized company $9,600,000. Their costs (still exaggerated for the exercise) may have been $50 per unit to manufacture, $300,000 per year for a small marketing team, $400,000 for a small accounting team, $1,000,000 for factory employees and $500,000 for office employees. This leaves them with $1,400,000 left to spend on uncalculated expenses.

Now if the company invested $200,000 a year on their high-quality YouTube channel their ROI would be as follows:

Cost of Investment = $200,000
Expected Sales Profit (after manufacturing cost) = $3,600,000

Actual Sales Profit (after manufacturing cost) = $25,200,000

Profit Added to company = $21,600,000

Net Profit of investment = $21,400,000

ROI = (21,400,000/ 200,000) x 100

ROI = 10,700%

While this ROI is most likely not exact I would not doubt it is far from the truth of BlendTec's successful Youtube campaign. In conclusion you can see just how immensely profitable a social media presence could add to a company, albeit such cases as BlendTec are as rare as winning the lottery.

Marvel in Social Media

In this blog post I will be reflecting on my analysis of Marvel Comics' social media presence. I used social media monitoring applications such as Addictomatic, Socialmention and Omgili. In this blog I will cover the strengths and weaknesses of each application over my analysis. First a quick description for those who don't know of Marvel Comics, Marvel is one of the top comic book publishers internationally and is responsible for producing cult classic movies such as the Avengers and X Men. 

In my analysis first with Addictomatic I found relevant fan blogs through the wordpress and google blog searches. Such searches provided a large fan base that supports the comic book company. Although there were many fan-made blogs returned no official blog posted by Marvel comics. All other social media searches through Addictomatic returned barely related content, some results were even more related to DC Comics (Marvel Comics' primary competitor) than to Marvel. Addictomatic I can conclude is effective at finding Marvel fan related articles and blogs but does not specifically find posts created by the company in question.

Addictomatic results for Bing news and Google blog search

The second web application I used to analyze Marvel's online social media presence was Socialmention. I would like to first mention (pun intended fully) that Socialmention works rather differently than Addictomatic, instead of having multiple feeds displaying different sites, SM displays all relevant results in the same feed. All of the results returned from Socialmention were by fans or followers of Marvel, the majority of results being photobucket pictures and tweets. SM would be a good medium for an advertising company that is hired by Marvel to evaluate market base and how they could create things to interact with it.

SocialMention results

The final web application that I used in my analysis was Omgili. It is quite similar to SocialMention but has less focus on result statistics and more focus on the results themselves having snippets for each result returned. There is little to say bout Omgili other than it allows a user to do much the same as the other two applications, its speciality being in ore depth for individual results. 

Omgili results

In conclusion all three social media monitoring tools are effective in the same thing. Their differences are minor but by sheer volume of results Addictomatic wins out of the bunch as it allows for quicker analysis of social media. 

Professional Enterprise 2.0 Strategy

This week I will be going into detail on yet another organisation and identifying how yet more social media value levers influence the social technologies used by the said organisation. This week the focus is on the Professional Services Sector. The company I have chosen to investigate is Optus company the Australian Telecommunications company. To analyse how Optus uses social media technologies we can analyse their social presence primarily through Facebook and Twitter. Optus has a smart, casual and friendly social attitude to their social media approach. They remain in communication with customers through their online social media presence.

Optus' Facebook profile has 133,364 likes as today and 1,826 people talking about it. Their staff frequently comment on Facebook users with insightful and friendly posts that reinforce their policy. Below is an example:

This helps to build confident and strong relationships with the customers of Optus. As the interactive aspect of their social media binds users to the Facebook page. Optus' Twitter page is more business oriented with Tweets as such it is aimed at a different audience, more investors and business clients than the casual approach of Optus' Facebook profile. Their Twitter page has 30,511 followers and has made 121,237 tweets. Optus' Twitter account follows a professional online etiquette such is visible in the picture following:

Twitter allows Optus to build strong business ties to their professional customers as they can keep updated with company related news with the almost daily posts. Both Optus' Facebook and Twitter accounts benefit their company by establishing a bridge of communication to their customers. This allows them to follow some of the social media value levers such as:

• Customer Service
• Providing customer care via social technologies
• Marketing and Sales
• Deriving customer insights
• Using social technologies for marketing communication and interaction
• Generate and foster sales leads
• Social commerce

The above two categories of Value Levers are the two most relevant to the social aspect of Optus' Social technologies. In the field of customer service followers of the company can ask questions through Facebook and receive informative replies on topics regarding to future products, sales and other things similar. The other aspect of their social media presence is to foster sales leads through the use of Marketing on their websites. Promotions and new products are advertised on both their Facebook page and their Twitter page. 

In conclusion Optus' online presence through social media benefits both itself as a company and the customers bridging their communication in a medium that allows quick and informative discussion.

Value Levers in the Not-For-Profit organisation Wikipedia

In previous blog posts I have covered Social Media Value Levers in commercial organisations. While there is a lot to learn from commercial organisations we can also analyse how non-profit organisations use Social Media Value Levers to their own advantage. I have chosen to analyse Wikipedia, who as pretty much everyone on the internet would know provide a free encyclopaedia service for the Internet. If you have ever researched something through google chances are a wikipedia page was right at the top of the results. Wikipedia was not always a bastion of information and knowledge, as it is sourced one hundred percent by the community in its early days it there was much disinformation and many incorrect facts. 

The Social Media Value Levers used by Wikipedia can be summed into four main social technologies:

• Collecting Information and Insights
• Gathering information for their service
• Crowdsourcing resources and solutions

• Mobile Resources
• Fundraising
• Creating and expanding volunteer networks
• Retaining support

• Executing their Mission
• Educating the public
• Engaging with supporters

• Social as Organisational Technology
• Improve collaboration and communication
• Rapid organising

Wikipedia uses crowdsourcing for their collection of information for their articles. Any user can contribute to the website and the article will be flagged for experienced volunteers to look over to validate. This allows Wikipedia to generate accurate and insightful information for their high quality articles.

Another Social Media technology that Wikipedia embraces is the use of Mobile Resources. Wikipedia's volunteers are built off of an intuitive discussion environment which allows users to get involved in the research that they are interested in. This allows their volunteers to engage in their fields of research and become dynamic members of the Wikipedia volunteer group which allows Wikipedia to have a large amount of volunteers.

Wikipedia is able to execute their mission of educating the public and engaging in historical discussion through the use of social media value levers. Wikipedia has achieved their mission by educating millions through using their service. 

In conclusion Wikipedia uses Social Media Value Levers to great effect in establishing their online presence. 

Risks of Enterprise 2.0 in Business

The main focus of this blog has been to promote Enterprise 2.0 and as such all blog posts so far have been promoting it with out looking at possible problems that could occur. Enterprise 2.0 whilst good for business, requires social media policies to be drafted and implemented, for a sustainable social presence. Creating a social media policy (SMP) comes with the benefit of controlling social media risk. To make a point, if a company doesn't disclose their legal liabilities and responsibilities they can be subject to many legal repercussions. Such legal repercussions include:

• Loss of confidential information;
• Breach of copyright;
• Defamation;
• False statements and or misleading and deceptive conduct;
• The tort of Passing off;
• Reputation risk;
• Statutory risks including:
• Breaches of the Privacy Act;
• Breach of continuous disclosure obligations in the case of listed public companies;
• Discrimination;
• Organisation and industry specific risks posed by the organisations operating environment.

 The above is quoted from Dundaslawyers. Classification of risks can be found here.

Any risk to a companies legal standing is a risk that should be taken very seriously, and as appropriate risk should be mitigated. It is especially important for high-traffic (those with a large customer base) businesses and organisations to create an SMP. For example QUT requires an SMP, some scenarios in which it would be necessary:

Reputation Risk

Reputation risk is classified by Dundaslawyers as follows:

Reputation risk is probably the most imperative risk to minimize in the social media environment, as the intangible loss of reputation can significantly damage the hard earned brand, in a very short time.  Numerous example of reputation of organisations being harmed on Social Networking Sites occur on a seemingly daily basis.  DundasLawyers

This is relevant to QUT as they have many staff members working in close contact with students who avidly use social media, thus negating any way they can be caught liable due to students is important to QUT.

Scenario 1
A past student defames a tutor they did not like, on the QUT Facebook  age. The public now sees the tutor in negative light, and the tutor wishes to sue QUT for damages to his/her character. QUT requires its SMP to claim that any post on their social media pages, which is not directly posted by them, is not expressive of the view held by, endorsed by or affiliated at all by QUT.

False Statements and/or Misleading and Deceptive Conduct

False Statements and/or Misleading and Deceptive Conduct covers any statement published by an organisation digitally, which legally can include those made by 3rd parties with out a SMPdisclosing otherwise. This is relevant to QUT as they allow 3rd parties to post on their Facebook page.

Scenario 2
A past employee working for QUT PR department with access to QUT's Facebook page's password posts on the QUT Facebook  age that Easter holidays is a week early. A student sees this and believes it, misses an in-class exam due to their belief the class was the next week, fails their degree and then sues QUT for falsely failing the student demanding monetary repercussion. To avoid such a problem QUT's SMP requires their Facebook page to be non-representative of QUT's course structure or other calender related structures.

I am not going to go any further in depth about how QUT could be exploited with out its SMP s I have made my point apparent, with out an SMP they can be made liable for things that are out of their direct control. In conclusion their SMP should be aimed at negating all liabilities from student and staff contact with the organisation through social media.

Expanding on Dell's social technologies

If you have read my previous blog I covered Dell's Enterprise 2.0 implementation, Idea Storm. This week I am going to investigate in more depth on how Dell's Enterprise 2.0 has an impact on marketing and sales of Dell products. There are four sub-categories I will be covering: how Dell derives customer insight, how Dell uses social technologies for marketing communication/interaction, how Dell generates and fosters sale leads, and how dell uses social commerce.

Customer Insight

Researching Dell's enterprise and social technologies I can confidently claim that Dell's Enterprise 2.0 focus is to gain Customer Insight. As previously mentioned in earlier posts Idea Storm allows concerned customers to provide input on how the future of Dell products. This insight is to the benefit of Dell as it allows them to change their product to meet demand with less focus on market analysis and more focus on customer demands.

Marketing Communication and Interaction

Dell's marketing communication and interaction is a core focus of their social technologies, evidence behind this would be Dell's Facebook Page where they advertise Dell and also interact with their followers with posts. This communicates their product to consumers who are interested and allows them to interact with staff, ask questions, etc. This benefits Dell as they can get their product marketed directly to the consumers they want, without having to spend money on conventional marketing that reaches less of their ideal market.

Fostering Sale Leads

Dell as of 2012 had the third biggest market share of any personal computer manufacturer, against heavy competition from HP and Lenovo. Some of the success in staying in the top 5 for market share over the years can be attributed to Dell changing with the times to support user interaction. It is not directly clear how Dell's enterprise 2.0 implementation is used to impact sales leads. Beyond advertising their new products on social networks and on their website, Dell does not actively push for sales leads as they push for customer insight or marketing interaction. Sales leads are a subtle side-effect from the other components of Dell's Value Levers. Arguably fostering strong relationships with their user base through IdeaStorm, Dell is able to secure sales leads with technical users upon release of new products.

Social Commerce

The social commerce aspect of Dell's marketing and sales enterprise technologies is not as pronounced as some of the previous technologies but it is still accounted for by Dell. Dell links from their social networks sales that appear on their company website that has a shopping cart for product purchase direct from the manufacturer. This is beneficial to Dell as they can recommend this medium as the best way to purchase Dell products giving them the most profit as they don't have to sell their products to retailers who buy at a lower price than consumers.

Summary

In conclusion Dell benefits greatly from Enterprise 2.0 in the aspect of Marketing and Sales through the use of gaining customer insight, marketing communication and interaction, fostering sales leads and social commerce. Not only have these technologies allowed Dell to remain competitive but they also allow Dell to understand their customer base properly.

Dell and the Escapist, Social Technology used efficiently

Social networks and other social technologies are on the rise within cutting edge companies around the world. The focus is to bring together employees to work more efficiently with greater production per group of employees. A good indicator of the popularity of the enterprise 2.0 revolution is the amount of companies adopting these technologies. An expert in the area, Mel Duvall writes for CioZone, a website that specialises in networking for IT leadership. In the articles, the author's found that 64% of companies in the united states of america use Web 2.0 Technologies within their enterprises. Mel continues in more detail the type of technologies, 

Those technologies (Web 2.0 Technologies) range from Web Services to blogs, wikis, social networking, podcasts, and instant messaging/ presence applications. Mel Duvall - CioZone

Mel goes on to list the percentage of respondents who say they are using or implementing Enterprise 2.0 Technologies,

• Web Services - 78%    

• Instant Messaging/Presence - 64% 

• Collective Intelligence - 60% 

• Wikis - 60% 

• RSS - 56% 

• Blogs - 53% 

• Podcasts - 53% 

• Tagging - 50% 

• Social Networking - 48% 

• P2P - 45% 

• Rich Client Technologies - 44% 

• Mashups - 42% 

• Semantic Technologies - 39% 

• 3D Web -37%

 Mel Duvall - CioZone

From the above findings we can deduce that social technologies of all types are vastly popular, with web services being the most popular. Web services are indicatively critical to a company that wants to expand its social technology presence.

To get a better look at how corporations use Social Technologies to their advantage, is to analyse a few examples according to the Wikinomics business model. That is the aspects of Peering, Being Open, Sharing and Acting Global.

Escapist Magazine is a online magazine that posts articles and videos that review games and movies, discuss social issues that are relevant to gamers/geeks, and discuss political issues that impact the audience of the magazine. The online community is kept alive by its busy forums which discuss the previously mentioned topics along with many other off-topic items. The site is made profitable from its advertisements aimed at the gamer/geek audience which flock to the site for their interesting articles.

Peering

The site's customer base, the visitors can engage in discussion facilitated by the staff of the website, or peer users. Such discussion devices are personal messages, comments, polls, all of which help bring the community into a strong discussion over the topics brought up daily. The company uses popular forum discussions and often tasks their article or video writers to target important issues with their customer base. As an example the popular desire for two of the companies most watched video reviews to get together to co-produce a video, brought together a collaborative series that was well praised on their forum.

Being Open

The magazine works with its community to let them know when new articles or video series are on their way. It keeps a close relationship with their user base, letting them know that first they are a company and need to make money. But they do not let this hamper their focus of creating active, engaging discussion in a clean and nice community, which they structure. Ranking their users highly in their priorities, it allows them to successfully use this connection to grow their customer base, and along with it their profitability.
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Sharing

Escapist has free giveaways to its customers to build interest in their events such as the EscapistExpo and their online store. In which members of the website get a discount. Such use of sharing fits perfectly with their online magazine structure.

Acting Global

The website is based in America, but most of its members are from a diversity of english speaking countries. Generally most users are from North America, Europe and Australia (source, user created survey). Thusly the magazine is acting global, as it is a website, it is available anywhere that has an internet connection.

Dell is a electronics manufacturer, specialising in producing laptops. As a company going through the expensive process of bringing products from design, through to production line, it is very important for Dell to gauge what their customers would like in a product. To better understand their customer base Dell launched Dell IdeaStorm. Idea Storm aims at collecting ideas from customers, refining them and then finally integrating them into their own designs to deliver a product that users will (hopefully) enjoy. To get an idea of the numbers behind the IdeaStorm Dell claims that: 19,766 ideas have been submitted; with over 742,210 votes submitted on them and almost 100,000 comments on these ideas, bringing together a refined total of 541 ideas implemented since the conception of the idea.

Peering

Dell produces good products through collaborating with their technical users through their social technologies.

Being Open

The entire idea of Dell's Idea Storm is to increase an open trust with its user base as they can communicate their wants and needs to the Dell developers benefiting both parties. Through their strong feed back and discussions Dell hopes to create trust with their customers.

Sharing

Dell facilitates sharing of intellectual property through their brainstorming sessions with developers and customers. Where ideas are passed back and forth on the structure of dell computing, what features Dell would like improved and how customers would like to improve them. This is quite open for a company delivering a product, and quite unique. It has certainly helped Dell foster both a relationship with technical users and increase their products growth as they are released with more features people desire.

Acting Global

Idea Storm is available to any customer of Dell products who speak english, while this may be a slight limitation, Dell products are not often sold in countries that don't speak english. Dell's global activity meet its social needs perfectly as it reaches its entire user base with the option to communicate with the developers of the products they use.

Summary

In summary of the two companies investigated, both use different means of communication with their customers to improve their product significantly. Social technology is a powerful force in regards to building relationships and trust with users.