Week 8: ROI in Social Technology

Return of investment (ROI) plays a fundamental goal of any business enterprise.  Though the term didn’t really gain much focus until 1960s. As this Google Ngram  chart shows, since then the term “ROI” has gained much popularity. 

So why was this sudden increase in popularity? It is clear that getting a return of one’s investment was always been the topic of discussion among the business-minded. But might be the term used to refer ROI was differentt: Return of Capital (ROC). When checked in this Google Ngram shows that ROI gained popularity as ROC was aging. Meanwhile, another term similar to ROI, “bang for the buck” began to gain popularity with ROI. 

What is ROI?

According to Investopedia, ROI is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. In simple words, there’s a formula to figure out the ROI.  Consider the gain from investment and subtract the cost of investment. For instance, if there’s an investment of $100 to make up $150, then there’s a profit $50, and this profit when divided my $100 gives an ROI of $0.50 or 50%.

In terms of Social technology implementation, social marketing of the business is the solution. With an estimate of about 1.7 billion users worldwide, the need to raise social media in commercial enterprise is a new way to engage with existing and potential new customer. To analysis further, consider an enterprise Hewlett-Packard who used social technology tool LinkedIn to promote there products and services.

Hewlett-Packard an American multinational information technology corporation provides hardware, software, products, technologies, solutions and services to customers, small and medium sized businesses and to large enterprises. Hewlett Packard’s social media team used LinkedIn for expanding social capabilities globally to:

•   Promote HP brand, products, and services (Tangible benefit)

•   Generate strong customer engagement and conversation of HP products and services. (Tangible benefit)

•   Support HP customers quickly. (Tangible /Intangible Benefit)

According to LinkedIn HP case study, HP was the first company to get 1 million followers on its LinkedIn page. There were Discussion groups set up for small business that has at least 5,500 members who actively engaged in discussion, communicate with other groups and recommend HP products. The video below explains on how it was successful.

Director of digital strategy at HP, Larry Nelson, says, “We were looking for new ways to use social media to engage our commercial clients when LinkedIn approached us with an opportunity called ‘Company Pages,’ which provides an HP-branded environment within the LinkedIn community. It’s essential for our content to be available anywhere, anytime, in communities where our customers and prospects congregate.”

About LinkedIn Company Page launched in November, 2010, enables members to post recommendations of HP products and services to their peers.  Each recommendation is automatically communicated to recommenders LinkedIn network, also appearing on the HP Company Page. By this, those who are interested, could communicate on HP Company page and get feedbacks on HP products and services.

Using recommendations from trusted peers, HP was able to connect customers in professional business. Posting discussions on LinkedIn was success and helped drive customer advocacy in the small and large business enterprise. The number of recommendations was growing naturally, HP started to run paid campaign to quickly build a demanding mass for recommendations.

HP launched Recommendation Ads campaign for promoting their products and services.  These ads (shown above) featured actual LinkedIn members who endorsed HP products.  This encouraged LinkedIn members to visit HP company page and recommend HP products and services in their network.

The result of campaign exceeded expectations. Since the launch of recommendations ad campaign in December, 2010, in first 2 weeks, over 2,000 LinkedIn professional had recommended HP products and services. 100% return of investment from ads. The tangible and in tangible benefits were:

•         First 2 weeks, 2,000 professional recommended ads.(Tangible benefit)
•         Ads generated over 500,000 viral updates. (LinkedIn) (Intangible benefit)
•      Rise in traffic to HP products and service page increases, almost doubled.   (Tangible benefit)
•         Rise in recommendations from business professionals. (Intangible benefit )
•         20,000 new followers on HP Company page. (LinkedIn) (Tangible Benefit)

This comprehensive ROI analysis was conducted by LinkedIn Marketing Solutions demonstrates the necessity for social technology to enhance the product and services of an enterprise.

Thank you for reading my blog and please a comment below.