ROI and Social Technologies

Return On Investment (ROI) can help organisations calculate the amount of profit received considering the investment input. This can be applied to the organisation’s social media. However, determining the ROI of social technologies can be difficult as they are less tangible than traditional ROI calculations. Today I will be identifying and discussing a ROI case example

Cisco Systems is one of the largest organisations that designs, manufactures, and sells Internet protocol(IP) based networking. Cisco also design, manufacture and sell other communications and information technology products. The company currently employs more than 65,000 employees in more than 80 countries.

This year, in August, Nucleus Research published a new ROI case study report on Cisco focusing particularly on “Salesforce Radian6” and how it achieved a 281% ROI in less than one year. Salesforce Radian6 is currently the industry leading social listening application within the Salesforce Marketing Cloud. It currently has “more than 5000 social mentions a day on Facebook, Twitter and other social channels.”

Cisco System’s Social Media Listening Center

According to the case study report, Cisco achieved this ROI by reducing marketing costs by using other marketing methods such as using social technologies. Cisco also increased profits by gaining a complete understanding of customers in order to identify leads, solve service issues, and improve overall engagement with its customers.

Project costs included software license subscription fees, outside creative agency and consulting fees, hardware, personnel, and training. Nucleus Research quantified the initial and ongoing cost of these project costs over a 3-year period to get a calculation of Cisco’s total investment in Radian6. The total investment were then caluculated with the additional investment and direct and indirect benefits (the gain) Cisco achieved such as sales and productivity driven by social media, to calculate the ROI.

This case study and ROI calculation thoroughly include the tangible benefits; however I believe that they could have incorporated more intangible benefits. When calculating the ROI they could have further analysed the social technology benefits.

The strengths of this case study are that Nucleus Research they clearly identify the product and company. They also successfully identify the tangible benefits and costs. However I feel that the calculation method employed by the Nucelus company is a weakness for this case study. This case study does not properly consider the non-quantifiable benefits and hence has greatly affected the outcome of the ROI and this case study.

ROI calculations can be very useful to quantify the benefits of social technologies for a company’s product or campaign etc. However, after analysing this case study it is evident that this process is very difficult to measure the non-quantifiable benefits with a ROI.

Do you another company that measures ROI of Social Technologies better than Cisco does? Leave a comment.

Thanks for reading,
-Grace

References:

Cisco Systems, Inc. (n.d.). Cisco Systems, Inc. Retrieved September 24, 2013, from bit.ly/jIHh

Duffy, J. (n.d.). Cisco Systems – Wikipedia, the free encyclopedia. Wikipedia, the free encyclopedia. Retrieved September 24, 2013, from bit.ly/gRaW1

How Cisco Achieved 281% ROI with Social Listening and Salesforce Radian6 – Salesforce Blog. (n.d.). Salesforce Blog – News from the industry leader in cloud computing. Retrieved September 24, 2013, from bit.ly/19pYTBh

ROI Case Studies Research Documents. (n.d.). Nucleus Research – Home. Retrieved September 24, 2013, from bit.ly/GDdfRr