How social media changed the ROI at Cisco

Week 10 has arrived and my last blog post on my journey of “Discovering Enterprise 2.0” will finally focus on the bottom line outcome of investing in social technology – the Return on investment (ROI). The ROI can be specified as: (Net profit/invested capital) *100 and in general the examples of how ROI can be increased using social technology are numerous. In my final blog post I have chosen to take a look at Cisco, one of the world’s leading manufacturers of networking supplies, and how the company managed to decrease the investments of a productlaunch with more than $100.000 ultimately increasing the ROI. 

Product launch at Cisco

Usually when Cisco launched a new product the process turned into a costly activity. The cost more precisely was applied to: 

• Flying in more than 100 executives and press members from more than 100 countries to the HQ in California. 
• Time taken from the CEO and other executives to prepare and present the launch. 
• Designing well-crafted and statistical press releases. 
• Distributing press releases. 
• E-mailing customers. 
• Running print ads in major business newspapers and magazines. 

In 2008 Cisco therefore decided to launch their product campaign, for their newest ASR 1000 series router, entirely through social media using videos, images and product specifications. The changes in the product launch strategy more specifically lead to: 

• Saving 42.000 gallons of gas for travel. 
• Top executives not spending more than one hour recording the video presentations. 
• Expensive printed ads replaced with social media exposure.

In total the cost of approximately US$100.000 was only a one-sixth of the former product launch investments.

Reflections of the change in ROI at Cisco

I really think Cisco did a good job in including both tangible and intangible costs in their analysis, having the specific calculations available would, however, increase the validity of the study. As the source of this case study unfortunately do not provide either the net profit, the contribution margin or profit ratio of the product it can be hard to say how crucial the change in the marketing grant is compared to the overall ROI. 

When viewing the product launch in a bigger perspective, all things being equal, I would actually be bold to claim that the most beneficial part of the new product launch strategy, in terms of the ROI, was not the money saved but the money earned; from the following facts: 

• 9,000 people attended the social media product launch event – 90 times more attendees than in the past. 
• Three times as many press articles were published. 
• Over 1,000 blog posts and 40 million online impressions were recorded. 

All in all I believe that Cisco’s engagement in using social media in their product launch was a win-win situation both in terms of savings and earnings – ultimately increasing their ROI

In other news 

Finally in the clip below you can see how other major and minor companies have also increased their ROI using social media: 

 

Before signing off I just like to give a huge thanks to the people providing valuable inputs to my blog helping me “Discovering Enterprise 2.0”. I had a good time, learnt a lot and hopefully you did too :-)

Rererences 

ROI

examples of how ROI can be increased

Cisco

networking supplies

decrease the investments of a productlaunch with more than $100.000

the clip

Social media monitoring of Lego - the toy brand NOT the slang

So the topic of this week is “Social media monitoring”. In order to learn more about this concept I have picked one of my all-time favourite brands: Lego - which I am sure some of you as a child have had the pleasure of spreading all over the living room floor, building amazing constructions, getting lost in a fantasy world of pirates, knights, firemen and Indians…  well at least until one of you parents stepped on a brick and told you to clean it up - or maybe that’s just how I recall some good Lego times :-)

The Lego Group

For a few insights of the Lego Group I can reveal that Lego is a Danish founded and family owned company producing the best toy of the century. In fact Lego has most recently become the world’s most valuable toy brand overtaken the leading position of mayor toy manufacturers such as Mattel (producing Barbie), Haasbro and Playmobile.

Besides Lego being an awesome toy, the reason that I picked Lego is, however, also related to the fact that Lego worldwide has millions of both adult and younger fans that share their passion for the small coloured bricks through all sorts of social media such as blogs, wikis, YouTube,  flicker, Facebook and Twitter not to mention all the individual fan sites. 

In order for Lego to nurture the many fans Lego has also set up the rebrick fan site, not to brand their products, but to establish a common platform for fans to interact, share ideas, rate and comment on what’s going on in the “Lego community”

Social media monitoring of Lego  

So with all this social media activity around Lego why not have a look at how Lego performs using different social media monitoring tools:

HowSociable: offers a simple tool to measure the Magnitude score on a scale from 0 – 10 (which is the activity of your brand on different major social media platforms) on a given week . I thought it would be fun to compare the results of Lego with their largest competitor Mattel 

Tweetreach: is another monitoring tool that specifically analyse the activity on Twitter providing gaphs, circular diagrams etc. and provides a list of the newest tweets containing the brand name.

Topsy: takes it a bit further by also monitoring links, photos and videos.

Reflections of findings

As I typed in Lego on Tweetreach and went over the latest tweets I however discovered a bit of a bias of the numbers: As some of the tweets were in foreign languages I found (thanks to my good friend Google translate) that lego is actually a “word” in Spanish with several different meanings i.e. “I bequeath” or “layman”. Also I found that “lego”is slang for “let’s go”.

Furthermore when I used Topsy I also discovered that one of the latest posted videos was a rap music video with by a band called Smile and their newest hit: LEGO. You don’t have to watch more than 30 seconds to tell that this is again the famous slang and has nothing to do with coloured plastic brick toys.

Returning to my analysis I furthermore discovered that some tools were case sensitive which I guess can be problematic do to the fact that users might write either: Lego, lego or LEGO again biasing a valid result. These findings unfortunately also decrease the validity of my mini battle of Lego vs. Mattel on HowSociable.

Conclusion

Ultimately the results of my analysis proved not to be purely build on the Lego brand. I do, however, think that the monitoring tools can provide some indication of the activity around a specific brand. The uniqueness of the brand name is, nevertheless, also very crucial in terms of gaining valid results. If Lego were to get the most accurate measures of the social media activity I would recommend the company to engage in social media intelligence instead of monitoring - as I found this to be the next wave of social media listening.

References

Lego

the besttoy of the century

the world’s most valuable toy brand

blogs
wikis
YouTube
flicker
Facebook
Twitter
rebrick
HowSociable
Tweetreach
Topsy
“lego”is slang for “let’s go”
Smile and their newest hit: LEGO
next wave ofsocial media listening

McKinsey - practicing what they preach

In my previous blog posts I have so far covered how different types of organisations can benefit from social technology using McKinsey’s 10 value levers. Since this week’s blog post is directed at the professional service sector, why not take a look at how McKinsey use social technology themselves? This week I will especially focus on how blogging, twittering and using wikis support the company business.     

Who is McKinsey?

The McKinsey & Company Inc. was initially founded in Chicago in 1926 and is today one of the world’s most prestigious management consulting companies serving some of the world’s largest corporations. Being a well renounced company McKinsey also has high expectations of its employees. A famous saying from the McKinsey office is “If you can make it here – you can make it anywhere”. This of cause also makes the company a top priority for graduates all over the world and has helped build the company image and global profile.

Knowledge sharing at McKinsey

Being a widespread global company the risk of “reinventing the wheel” has during the latest decade reinforced the concept of knowledge sharing at McKinsey and the company has therefore established knowledge management centres and networks globally in order to source specialist knowledge and share the emergent findings through the company network. Even though the specific used platforms are unknown these actions are, however, a good example of how McKinsey benefit from using social technology in intra- and inter organisational collaboration and communication (number 9 of the 10 McKinsey Value levers)

Besides the internal and external company network McKinsey also uses blogging to share knowledge. McKinsey has in fact established a wiki where both current and former employees can publicise their blogs in order to increase knowledge sharing on the latest technology or just improve their work relations. 

In terms of sharing knowledge with the public McKinsey also uses RSS feeds, Pod casts, YouTube, not to mention Facebook and Twitter where respectively more than 73.000 friends and 25.000 followers regularly receives status updates and tweets from the company i.e. regarding new research and publications. One of McKinseys latest initiatives also include a new app for iPad offering several tools to share knowledge and stay connected with users.

Finally McKinsey also upholds a company page on Wikipedia where everything from the company history to clients and company criticism is publicised and regularly updated.

Conclusion

Like the other companies that I have previously discussed in terms of social technology McKinsey also seems to benefit from using social technology. The most striking difference comparing the former evaluated organisations with McKinsey is perhaps the shift from B2C to B2B which defiantly affects the way that the social technology tools are used. Nevertheless I still believe that the above-mentioned proves that a social service organisation like McKinsey can also benefit from the use of social technology.    

References 
McKinsey
The McKinsey & Company Inc.
A famous saying
the companynetwork
McKinsey Value levers
publicise their blogs in order to increaseknowledge sharing
app for iPad
RSS feeds
Pod casts
Facebook
Twitter
YouTube

How social media reinforce the wellbeing of animals

In my former blog post "Have you tried the Big McAfee ?" I came to discover how social media can support the enterprises on different areas and provide direct economic earnings. This week I will furthermore pursue to prove how non-profit-organisations and non-government organisations (NGOs) can also benefit from the use of social media.

According to the McKinsey report:The social economy: Unlocking value and productivity through social technology NGO’s can also benefit from the use of social media in several areas as seen in the table below. 

A good example of an organisation benefitting from the use of social media is the Australian Animal Rescue organisation (AAR). AAR is a non-profit, non-government organisation, run entirely by volunteers. AAR was founded in April 2009 in the state of Victoria as a means to save the wildlife affected by the widespread bushfires that year. AAR has grown and expended its activites over the years and is today dedicated to creating a better life for both wildlife, livestock and pets within the state of Victoria.

Facebook as a key tool to improving animal wellbeing

Besides the organisation website, AAR has also established a Facebook page to reach further out into the community. Through Facebook AAR has experienced an increased feedback and interest in several areas. More specifically these areas include:

• Crowdsourcing resources and solutions (2)  in order to help lost pets finding their way home or putting pets up for adoption.
• Increased Fundraising (3) both in terms of financial donations as well as food and other supplies.
• Increased volunteer network (4).
•  Retaining public support (5) keeping the community up to date about what goes on in the animal world – telling stories about the god, the bad, the happy and the sad events.
• And lastly the opportunity to educate the public (6) 

Images from the AAR facebook site 

Even though AAR has already experienced many benefits of engaging in social media it can, however, be argued that even more initiatives could help support the work of the organisation. In terms of Gathering information (1) and Engage supporters (7) AAR might consider to urging the community to report any accidents or other critical events directly through the social media platform, for instance using on-the-scene pictures. In this way AAR could proactively gather critical information of animals in need fast and thereby forward the appropriate rescue resources. If an incident was reported in a remote area, nearby volunteers would also have the opportunity to approach the scene faster. Ultimately this use of social media could even make the difference of life and death for animals in need.

Having the public engaged in providing information can, however, also create some risks. I.e. if the platform was used to report animal cruelty or abuse it would most likely raise legal issues in terms of privacy rights or risks of unfair public discrediting.

In closure of how social media can be used to improve the wellbeing of animals I will finally also like to point to another NGO. RSPCA decided to take their fight for animal rights a bit further by creating the hashtag #PoliticalAnimal in order to put focus on animal-welfare-policies before the Australian election of 2013.            

Refrences

Have you tried the Big McAfee ?

the McKinsey report:The social economy: Unlocking value and productivity through social technology 

Australian Animal Rescue organisation

AAR has also established a Facebook page
RSPCA

#PoliticalAnimal

The dark “site” of Enterprise 2.0

As proved in my previous blog post: the use of social media can be highly beneficial for the company’s revenue. However, using social media can also introduce many threats and risks to a company i.e. through brand-damaging customer comments on the company website or through other social channels. 

The customers are, however, not the only potential threat against the company. Both internal and external stakeholders also possess the power of creating negative publicity or even legal risks against the company

According to  Burrow and Shullich some of the most common legal risks rooted in social media are as listed below:

• Confidential information can by mistake or intentionally be published
• Infringement of the company trade mark, if a company has not insured its company name on all social media websites
• Statements made on the company social media websites could potentially damage the reputation of the company
• Malware attack – specifically through social media

Having a social media policy has, hence, become inevitable in many modern companies whether the company itself decides to engage in social media or not. The purpose of the social media policy is to inform and instruct its employees in what is acceptable social media behaviour, both in and out of the office, according to the specific organization. 

A McD story

Even though an organization has spent much time and effort developing a social media policy there is, however, still no guarantee that an apparently innocent post on a social media website, trying to reinforce the company brand, will not backfire and create severe damage to the company reputation. This is exactly what happened for the fast food restaurant giant McDonald’s.

So last week we learnt how McDonald’s awesome social media campaign resulted in a huge increase in revenue. This week is opposite dedicated to highlighting how McDonald’s also suddenly experienced the dark side of engaging in social media. The video below describes how McDonald’s tried to use Twitter to promote a sincere and positive reputation of the company by focusing on the pride of the hard working staff through their everyday stories. In order to do so McDonald’s introduced the hashtag “#McDStories”.

From the video clip it is obvious how McDonald’s attempt to create a positive wipe by using a specific hashtag backfired and turned in to what in Twitter language is called a “Bashtag”.

How can the companies deal with the risks?  

Even with a sound social media policy and with the best marketing staff McDonalds would not have been able to predict that the followers at twitter would react the way they did - turning the good intensions into a public mocking campaign.

The big question now is: How should the company react when the damage has already been done? One true answer to this question is not easily found. Some ideas has however, started to emerge in order to support the companies in mitigating the potential threats through social media.

To sum up companies should:

•  Be very careful how you select a post or a hashtag and avoid sensitive topics.
• Be prepared (have the resources) to answer criticism openly
• Have a backup plan if your post or tweed turns in to a negative campaign against your organization

As every organisation, and thereby its engage on the social media scene, is unique a clear set of guidelines or roadmap do not exist. The organisations can, however, only prepare themselves for potential adversity from both internal and external sources. This being said, I still believe that with some “common sense” the benefits of engaging in social media strongly uphold the risks. Hopefully the success stories will continue to exceed the social media horror stories ultimatly inviting more companies to join the game.

Refrences

many threats and risks to a company

Burrow

Shullich

a social media policy

video

“Bashtag”

mitigating the potential threats through social media

Have you tried the Big McAfee ?

Around the world more and more companies are constantly discovering the benefits of Enterprise 2.0. i.e through:

• Productivity and Efficiency
• Staff Engagement
•  Knowledge 
• Reputation

In The social economy: Unlockingvalue and productivity through social technologies (July 2012) report by The McKinsey Global Institute it is further stated that in 2011 72% of companies, asked in a survey, answered that they were using social technologies in their businesses. Out of these companies, non less than, 90% reported experienced benefits from the use of social technologies.

As the main finding the McKinsey Global Institute have in their report identified ten areas where social technologies can add value to an organization - the so called value levers. The ten areas are shown in the figure below. 

McDonald's befitting from social technology  

In this blog post I have decided to focus on McDonald’s and their use of co-creation in product development. 

Everybody knows MacDonald’s as a globalised company in the fast food industry and most people would properly also have voted for McDonald's as world leader with a market share of 13%.

In 2011 McDonald’s in Germany decided to engage in social technology in a very smart way.  

As a part of their constant product development and marketing events the company decided to launch a competition where people could log on to McDonald’s website and design their own dream burger.

Once the burger was designed the contestants used a wide pallet of different campaigning tools (such as banner templates) available on the McDonald’s website to create a customized campaign for their dream burger. The contestant would then use Facebook, Twitter or VZ-Networks to promote their individual campaign which at the same time would enter them into the competition to get the most votes. After a few months the top ten finalists got to present their burgers before a test jury while other contestants were able to follow the event on Facebook. The final top five burgers then went on sale at McDonald’s Restaurants throughout Germany.

Facts:                                                                                      

• During the competition a total of 116.000 burgers were designed - with the first 45.000 burgers designed in the first week alone.
•  More than 12,000 individual ad campaigns were posted on Facebook
• 1.5 million votes were registered.
• The campaign achieved more than 21 million contacts which in total meant reaching one out of four of the German population.
• The entirely event was launched and marketed through social media channels whiteout McDonald’s spending the usual fortune on advertising.

According to McDonald’s no campaign had ever resulted in so many new customers, so many promotional burgers sold or in such high total revenue.

McDonald’s has I my opinion used social technology for product development, through customer insights, as well as branding, in a very smart way with a minimum cost. Not only did Mcdonald’s use co-creation to develop 5 new burger variants, they also gained valuable customer insights, as a massive statistical foundation, in terms of forecasting how their customers think a McDonald’s burger should be composed ultimately providing McDonald’s with a tool to target their products even better.  

So let's do the math

According to McDonald’s financial report from2012 the total revenue for the McDonald’s Corporation in 2011 was 27 billion US dollars. Furthermore the report states that the European market accounted for 39% of the total revenue. Out of the total revenue generated in Europe, Germany accounted for 51%. This means that Germany generated a revenue of

27*0.39*0.51 = 5.4 billion US dollars                            

According to The McKinsey Global Institutes report, using social technology in the areas Product development and Marketing and Sales can generate extra revenue of > 0.5% and > 2% respectively.

Assuming the minimum expected growth, meaning that the revenue for McDonald Germany would only increasing 2.5%* from the use of social technology this would, however, correspond to a massive increase in revenue. More specifically:

5.4*0.025 = 134 million US dollars

This is in my opinion a pretty decent outcome of a competition that didn’t even offered a spectacular first price. In short McDonald’s Germany took a great idea and combined it with social technology and got the maximum benefits on the bottom line in return through different value levers. 

The Big McAfee

So of cause I couldn’t resist to log on to the Danish Homepage of McDonald’s and design my own burger as well. So here it is, in honor of you-know-who :-D I give you:

Now who's hungry? I know I am!!

References:
discovering the benefited of Enterprise 2.0
The social economy: Unlockingvalue and productivity through social technologies
world leader

the company decided to launch a competition

MacDonald’s financial report from2012
Danish Homepage of McDonald’s
*(from the assumption that the growth in the two areas is experienced simultaneously)

Just saying "Hallo Web 2.0"

Most people know the feeling of being part of a conversation at work or in class where someone suddenly brings up a new and unfamiliar concept that everybody else seems to know about but you. So your instant thought is “please don’t ask me about this” and “get me online so I can look it up on Wikipedia” before I look like a total dummy. Recently I came across the concept of Web 2.0 in a similar manor. So I went on to use Wikipedia (as I always do) without even knowing that I was actually already using a Web 2.0 tool.

Here is what I´ve found:

“Web 2.0 is in short social software that enables people to interact in knowledge sharing using different types of tools through the web”

So far so good. But what are these main tools, how do they work and how can I use these? Through my searching I found that not all the web 2.0 tools were as unfamiliar as I first imagined. Wikipedia is, as mentioned, a well-known tool to most people as well as Facebook and Twitter. To me some of the new tools included blogs, podcasts, rss and general use of wikis. Getting to know all these new tools and the ideas behind them might, to some (including myself), seem overwhelming but as it turns out pedagogical and visual introduction to these tools is luckily also available. In example explaining the concept of an rss-feeder, as a common Web 2.0 tool, is introduced here.

Haven gone over the video clips the tools of web 2.0 suddenly do not seem so distant and unfamiliar. So I continued my search in relation to how the web 2.0 tools can assist my personal productivity and found even more tools that I am positive will come in handy through my future studies and hopefully to you too. In example:

Google.docs - (as part of goggle.drive) just started using this tool and really think it's a nice alternative to dropbox as more people canwork in the same document at the same time

Glogster.com  - a place to use your imagination and design your own posters using, music, video, speak, pictures, animations and more. A fun and visual alternative to ordinary blogging.

Popplet.com – an easy to use, collaborative tool for creating mind maps for school or professional work.

To me the only downside to these tools is that I didn’t know about them until now ;) In general Web 2.0 has contributed to my personal productivity in terms of providing important knowledge that is essential to my specific interests. Also it has reinforced my own engagement and contribution of knowledge sharing through my personal online networks.

As it turns out the more I look the more I notice that web 2.0 is all around and even though some aspects are new some are definitely also familiar and to me that is a nice starting point. I guess I am also not a total dummy any longer if someone asks me of my opinion on the new trends in Web 2.0 – so mission complete!

Again, please feel free to comment as I am sure I can still learn a lot, whether you are a know-it-all-IT-geniuses or just a rookie - like me.   

Well that’s it for my blog post this week and enough of all this Web 2.0 stuff….now it´s time for Facebook!!!  ;-)

Refrences:
Web 2.0
Wikipedia
Common craft
Google.docs
dropbox
Glogster.com
Popplet.com