Microsoft – Opportunity Costs as ROI

When we talk about ROI (return of investment), the following formula is considered to be a standard method to calculate this metric as an evaluation on the profitability of a business activity. And ROI can symbolize either a rise/fall on the market sale, or an increase/decrease on the financial expenditure.

roi

At the moment, this formula is also widely utilized in calculating ROI on implementing social media like Facebook, Twitter, Google+, Youtube and so on. However, “gain from investment” and “cost of investment” are measured in a variety of aspects due to the tangible and intangible benefits provided by social media. Furthermore, calculation of ROI is always fitting for purpose. In other words, ROI calculation is a evaluation process which is aiming for a specific task, or a group of specific tasks. For example, Microsoft XBOX service center has been attempting Twitter as the media channel for customer service monitoring and management instead of traditional service call (referenced from calculating ROI from social media – problems, pitfalls and breaking all the things…). The way how it works out the ROI of social media implementation on customer service is just simply measuring money saved in call centre costs by the following formula:

xbox

I agree with bloger Hannah Smith, who posts calculating ROI from social media – problems, pitfalls and breaking all the things…, that social media implementation actually don’t contribute to the business revenue growth directly. When calculating the ROI of social media implementation, it is easier to use traditional metrics like financial expenditures on marketing, sales and after-service which directly have impact on the business revenue. These metrics are tangible values generated by social media.

In the case of Microsoft XBOX service center, it only covers the tangible benefits which Twitter generates. Nevertheless, there are intangible factors which should be considered. For instances, migrating call service to Twitter service can improve efficiency of communication and trouble-shooting between technicians and customers, as they can post problems and solutions on the social media platform at any time with attached documents or pictures for better explanation. This measure also helps to build up database with service maintenance records which allow customers to solve a wide range of problems on their own efforts.

There is also another example about how microsoft calculate ROI of social media in a higher level view:

Microsoft calculates the ROI using the regular formula which I provide at the beginning, and the metrics are included as shown in the following picture:

metric

 

As we can see in the picture above, all the metrics are tangible and measurable values which are able to be collected from the hosted social media platforms. And cost of each individual category (exposure / engagement / action / advocacy) is evaluated via the following calculation:

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Therefore, calculation about ROI of social media implementation in Microsoft is done by referencing the tangible values mainly. However, there are intangible values like social media migration impacts on traditional services, and uncertainty of customers’ intention to interact with its social media channels. In terms of the uncertainty of customers’ intention, a typical example is that customers can liked and even leave comments in both Microsoft and Apple channels, they argue about system advantages and vulnerabilities on both platforms, but in most circumstances, people who are using Microsoft system still take up a large portion of the market.

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How popular is ASUS through the social media

Asus is a multinational computer hardware developer and manufacturer from Taiwan. I choose this organization since I am a fan of Asus product and have been its loyal customer of its motherboards and laptops for more than 5 years due to the durability of its computer hardware and the technical supports of its utilities. In this blog, my goal is to use social media monitor tools such as SocialMention, Addictomatic and TweetReach on the purpose of finding out social activities related to or taged as Asus so that we  are able to find out the health condition of this brand through the social media.

This is a practical tool with sufficient statistics and evidences to demonstrate how active Asus is involved in the social media. Keywords can be searched in case-sensitive, unexpected keywords can be eliminated, source type can be selected, statistics can be analyzed in different durations (by day, week, month and even year), and results can be listed by date or source.

Since keyword searching is case-sensitive, the results by searching “ASUS” and “asus” are mostly different, however, both are of referencing value. The following screenshots indicates the key elements included in the monitoring tool.

– “Strength” refers to the popularity of the brand through most social media

– “Sentiment” refers to the ratio between positive mentions and negative mentions of the brand

– “Passion” refers to the percentage of unique users who have high possibilities on mentioning the brand repeatedly

– “Reach” refers to the percentage of unique users who are mentioning the brand compared to all the mentions

The two results don’t show much differences except the “sentiment”, but all in all, the high ratio between positive mentions and negative mentions demonstrates a health condition of Asus brand.

statistics 1 - asusstatistics 4 - asus

The following screenshots show the top contributors who mention most about Asus, and most popular hashtags related to Asus and also the relevant posts appeared different sources. The results turn out that Asus is popularly mentioned in Twitter, whilst it is not significantly active in Facebook.

statistics 2 - asus statistics 3 - asus

Unlike SocialMention monitoring tool, Addictomatic shows only a list of posts existed in different social media without summary of statistics. And it is interesting that this tool searches no result of “asus” in Twitter (the keyword searching is not case-sensitive). It is probably because of the different searching and data-collection algorithms.

asus-addictomatic

Since SocailMention and Additomatic tools come up with different results on Twitter posts, I use TweetReach monitoring tool to dig out more information specific to Asus in Twitter.

This tool provides much more summaries of statistics than SocialMention as TweetReach also displays bar chart, liner graph and pie chart to demonstrate data in an easy-to-read and comparable manner. The result turns out that Asus is really popular in Twitter, in another words, SocialMention is of more reference value than Additomatic.

tweetreach

Based on the statistics shown in SocialMention monitoring tool, I recommended Asus to put more efforts on social media implementation and involvement with Facebook due to the great amount of users in Facebook as well as the marketing value in this social platform.

Deloitte is successful in utilizing multiple social media platforms

Since traditional marketing strategies like TV advertisement and newspaper publishing have reached the bottleneck on driving significant improvement of sales, revenue, branding, and even interaction with clients and business partners, social media becomes attractive but challenging to organizations, especially professional service sectors like Deloitte. Social media is attractive to professional service sectors due to its potentially high market value and strongly collaborative community bases in virtual environment where marketing and sales are efficient and cost-effective. On the other hand, social media is challenging as the technologies and policies on dealing with networked community issues are not mature enough.

Deloitte, one of the most popular financial consulting and advisory companies, has been successfully embracing social media technologies on promoting brand-recognition and marketing. This success leaves an inspiring lesson on how to adopt social media technologies with highest margins but at a relatively low risk.

The Deloitte Company logo is seen on a commercial tower at Gurgaon, on the outskirts of New Delhi

In the following paragraphs, marketing and sales based on Mackinsey Global Institue Report (2012) will be analysed as the major value lever of successfully implementing social media.

  • Derive customer insights

Social Media at Deloitte Report highlights that Deloitte builds its channel in every popular social media platforms such as Youtube, Linkedin, Facebook and Twitter in order to promote its profile in a scale which is as large as possible. The content it usually posts in those platforms is about its financial reports, consultation scenarios, market survey, government policies or interesting news. The purpose of updating these posts is to bring up valuable topics and then attract audiences to interact with constructive feedback which are significant input for market positioning and user requirements of future services.

(Facebook page in Deloitte channel)

facebook

(Twitter page in Deloitte channel)

 

twitter

  • Use social technologies for marketing communication/interaction

Beside deriving customer insights for future service development, implementing social technologies has benefits on collecting useful information like customer’s loyalty to the company and even to the other brands, customer’s recommendations or complains to improve the current services, and business intention from business partners.

It is worth mentioning that how Deloitte recruits audiences is aiming to connect/follow channels of those with high ranking positions in financial consultation domain from the public or the government. Building “relationship” with famous people can not only enrich updating content in Deloitte’ social platforms, but also its own reputation will be improved at the same time. This is what we call the celebrity benefit.

 

Earthwatch Institute – A University of The World

Earthwatch institute is a non-profit organization which is from USA since 1971 and it has built offices all over the world in order to cover its major task of supporting environmental-scientific researches from schools, univeristies and even other educational institutes (referenced from wikipedia). Earthwatch aims to construct a robust knowledge database about natural environment, let more people from worldwide know about existing environmental issues and protection measures, and appeal them to contribute on protecting the natural environment.

With social media like facebook, twitter and Youtube, Earthwatch Institute has more flexibility to strengthen its follower-base, gather educational materials and research projects, and then fulfill the goal of environmental protection. The following paragraphs demonstrate the social technology value levers which Earthwatch is applying when implementing enterprise 2.0.

1. Collect information and insights (crowdsource resourses and solutions)

social media usedwiki-blog

As it was described above, Earthwatch Institute gains a huge amount of followers around the world via Facebook, Twitter and Youtube. The followers are either from the public or from the educational/research institutes, and they are encouraged to learn, share and contribute their scientific field researches and environmental study/experience through those social media.

Earthwatch also has its own official websites (e.g. Earthwatch Institute Australia) for various regions in order to systematically organise its events, blogs and news, which help to introduce and advertise itself. Most of the information are crowd-sourced from the followers and cooperative institutes.

2. Mobilize resources (Fundraise)

donation

As a non-profit institute, Earthwatch inspires all people to make donation via either social media or physical actions like donating cash in a fund-raising office. Nevertheless, donation activity through social media is more common compared to the traditional method.

The benefits of social media on fund-raising are

  • Fund transition becomes much more transparent to the public
  • Easier to gain response and actions from the public via network
  • Save time and cost on traveling around to speech and collect donations
  • Popular social platforms have robust user-base and they offers a cost-effective method to publicise institutes

Risk assessment of social media in Nestle

Capture

Nestle is a world-wide manufacturer of food like chocolate-milk bar, milk powder and coffee. Since Facebook was becoming one of the most popular social media with a huge amount of users all over Europe, Asian, America and Australia, Nestle embraced this networking technology as it launched an official facebook site for marketing and achieving more customers as well as supports.

However, lacking experiences and policies on social media administration makes Nestle getting into troubles easily and it will lose customers’ supports if no applicable measures are taken.

The following video uploaded by the Greenpeace organization reveals the environmental damage caused by palm oil purchases from Nestle to produce Kit Kat milk bars. The ‘fight’ between Greenpeace and Nestle caused Nestle a great impacts on its customer base, especially on those who were offended by the environmental damages.

Capture

(video link: http://www.youtube.com/watch?feature=player_embedded&v=VaJjPRwExO8)

The article (http://www.1goodreason.com/blog/blog/2010/05/19/nestles-social-media-meltdown-case-study/) demonstrates a typical risk of embracement of social media in Nestle:

  • reputation risk

As the social media is opened to the public to contribute their opinions, it is highly possible that the social media technology will be utilized as a tool to make negative, abusive or offensive comments. The worse case is that those negative comments may lead to a wider range of impacts on the loyalty of customers.

This risk is particularly relevant to the company as Nestle is a food manufacturer and its reputation determine customers’ faiths on the health level of both products and the company itself.

(Countermeasure / policy)

– Nestle is supposed to be transparent on its manufacturing policies.

– It should raise a discussion board to gain responses and solutions from the public in order to interact with Internet users and earn their trusts.

Another scenario is that an employee requested an altered Nestle logo to be attached to the profile picture of commenting user, otherwise his/her posts will be deleted. This request led to a pool reaction on the official facebook page of Nestle, and then the employee behaved badly on the users.

 

(http://search.proquest.com.ezp01.library.qut.edu.au/docview/914991070)

This case demonstrates the following risk:

  • organization’s liability for employee acts of defamation

It is relevant to the Nestle since it was trying to have strong policy which insisted posters on its facebook page to have its logo.

(Countermeasure / policy)

– Nestle should have a effective mechanism to review the employees’ posts before their actions (posts monitoring system and rules)

– Employees who are involved in the facebook should be trained and qualified by policy / rule tests

Ford connects with its fans via blogging

Ford motor company, as a world-wide motor manufacturer, has a strong customer base which is enough for building social connection, creating company-and-customer interaction and even gatharing feedbacks of products from customers via digital social media. Both the customer base and the product development are growing at a significant rate after Ford embraces social media technologies. As is shown in the image below, the FordSocial website with blogging and forum functionalities is a typical example which brings economic benefits to Ford:

(website: http://social.ford.com/)

Image

1. Marketing and sales value lever:

  • Marketing communiation/interaction

Image

The screenshot of the FordSocial website above demonstrates the blogging function which allows Ford customers or fans to share their stories with their Ford vehicles. The content of the blogs includes customer satisfaction or complains to the products, and this can be customer insights as well as analyzable statistics which are useful for reviewing the brand-health, customer loyalty and market capacity. At the same time, allowing customers to blog about the product rather than self-marketing by the company is a cost-effective and objective way for building reputation.

2. Operations and distribution

  • Use social to distribute business process

Image

The images above is the forum section which inpires Ford fans to post their ideas about how to improve the product. The posted topics are all from crowd-sourcing method and they covers knowledge areas on appearance design, mechanical promotion, security enhancement and problem solving. With participation of FordSocial users, Ford ont only can flexibly adjust product line or business strategy based on the recommendations from customers, but also are able to forecast the customer’s expectations to the future products.

How social media and network technologies changed the fortune of company

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The beauty of social community is to allow trouble-shooting, knowledge growth and business improvement being proceeded in a collaborative environment between companies or between company and professional individuals around the world. Network technologies and the social media like twitter, facebook and youtube are the path to support industry collaborations with higher efficiency and benefits regardless of constraints like geographic distance, time management, documentation difficulty and budget issue. In a word, enterprise 2.0 is the social media technology which offers companies a great challenge to gain higher benefits of both profile and business by deeply involving into social community via Internet. The following paragraphs will introduce a few examples of companies which successfully implemented enterprise 2.0 and achieved remarkable business values.

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(article cited from http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=4000006924)

TELUS is a telecommunication service provider from Canada which used Microsoft Sharepoint as the crowd-sourcing tool to enhance the learning-and-growth of employees in a cost-effective way since 2010. With help of sharepoint, employers can access uploaded course and training materials from the knowledge database prepared by the experts within the company. It saved about 20 percent of learning budget to its staffs.

Peering business model is utilized in this case since TELUS is peering with Microsoft and imason to develop the social media for staffs in TELUS to share their skills and experience.

Image

(image cited from http://communities.intel.com/community/itpeernetwork/blog/2012/01/02/evolving-enterprise-social-computing–the-intel-it-story)

(article cited from http://communities.intel.com/docs/DOC-3603)

Intel is another example who embraces social media and network technologies to build up the digital environment for internal collaboration. The image above demonstrates that Intel has been introducing social media since 2004 and the company heavily relies on them. Based on the article, by 2009, Intel aimed to “develop social computing strategy” for the purpose of enabling more frequent communication and better experience on resource and knowledge sharing. Based on the existing software and hardware technologies developed by Intel, social media have been working in a highly organised way at low risks like security breach, system unstability and low productivity.

Ideagoras business model is used in this case because the enterprise 2.0 technologies which Intel uses are consumer-oriented social media. In other words, Intel gains external contribution by collecting feedback from consumers via wiki, forum and blog.

Enterprise 2.0 – Blogging powers the society

In the enterprise 2.0 unit, I plan to improve my fame by buiding a popular and productive blog, and even by demonstrating my leadership during teamwork.

From my point of view, blogging in plain text only can easily fail to attract our readers. Sometimes written skill becomes critical when we try to express deep level opinions or explain technical stuffs especially without visual assistances other than plain text. It might be acceptable for people who love reading books, or someone who does academic research. However, a successful blog invloves perfect interaction with readers by adding multimedia elements such as images, videos and even flash games.

Therefore, one of my strategy to build up a popular and productive blog is to embed multimedia technologies for corresponding articles in the blog. Just like the lecturer utilizes lecture slides with interesting pictures, I can insert a few images in my blog to help expressing my ideas clearer and even provide better understanding for the readers. Inserting videos which are made in either a professional way or an entertaining way also has similar effects on creating attraction with readers. A better way to impress the reader and even engage them to interact with the blog is to add an easy-to-play but funny flash game. A typical example is the Google doodles which are google icons in different design appeared on the google homepage for specific themes during festivals or anniversaries. Sometimes they are flash games allowing visitors to engage with (http://www.google.com/doodles/basketball-2012).

Image

Another strategy to improve the popularity of the blog is finding powerful quotes to catch readers attention more efficiently. The quotes can be hot news, famous articles and arguable topics which may “manipulate” readers’ emotions so that they cannot wait to raise a comment. The following picture demonstrates a website with blogs containing a varity of hot topics and news (http://blogs.computerworld.com/).

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The worth-reading blog that I would like to recommend is http://www.theverge.com/. This blog looks tidy and professional in the homepage as the news and interesting articles are listed properly in titiles with abstracts and images. The most impressive section of the blog is the IT product introduction page which contains comprehensive articles with device specification, product rating and even high-quality photos.

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