Week 6: Return on Investment

Implementing social technologies within companies by now hopefully sounds like a great idea, but can an actual business case be made for justifying the expenditure? Yes it can, and Yammer is a good example of this. Yammer is an internal social network for companies to use as a way of communicating between employees. To gain access to the service, the business must pay a monthly fee per user (from $5 to $22) and as it is owned by Microsoft, companies are able to bundle it with licenses for Office 365.

Profits and ROI

Coles is a customer of Yammer, signing up 103,000 of its employees to the service. Up to $22 per employee per month, equaling $2,266,000 per month or $27,192,000 per year sounds like a large sum of money, so what would it take for Cole’s investment to pay off? Assuming that their employees work 39.7 hours a week (the national average for full time workers), for 50 weeks of the year, minus 1 day or 8 hours of training, making a total of 1,977 hours a year worked per employee and that their employees are also paid the average wage of $1,516.90 per week, therefore making $78,878.80 per year, an hour of a Coles employee’s working time using Yammer is worth $39.8982. Therefore, each employee must save 6.6168 hours each year to break even, or just under 8 minutes each working week.

If a user saves just 10 minutes each week, or 8⅓ hours each year, the company will save $332.485 per employee, or $34,245,955 across the company. This gives Coles a 25.9413% return on their investment.

It should be noted that this ROI doesn’t take into account any extra internet or networking hardware costs this initiative would incur, although these would be minimal, or factor in the cost of training, although it does allow for lost productivity. It should also be noted that it doesn't include that Office 365 (and support) is included in the cost, a service which companies would almost certainly already be paying for, and therefore that budget could be redirected towards paying for a bundle including Yammer, saving the company some money and improving their return on investment.

Other Benefits

Although companies ultimately make business decisions based on their bottom line, there are many intangible benefits that Yammer can also offer which Coles benefited from. Possibly most importantly, it provides a place for people to share their expertise, increasing collaboration, innovation and problem solving across the company. It also helps to free up store staff, meaning more are able to serve customers and give them a better shopping experience, as well as boosting employee morale and improving retention. Despite what many may think, that Coles is a large and more traditional company and therefore both the employees and the corporate culture as a whole wouldn't be open to trying Yammer, it was actually found that it had a high adoption rate, with 87% of employees using it within 3 weeks of it becoming available in South Australia.

What other companies do you know of that use Yammer or other internal social networks? Let me know in the comments.

Week 5: Case Study

For this post, I’ll be looking at how Coles, a supermarket retailer operating in Australia, has been using social media, especially to communicate with their customers.

Social Media

The social media that Coles is most active on is Facebook. Here, the company has two accounts, on for Coles and another for recipes. The main account's page is focused on posting a wide range of content including information about new offerings in store, product recalls, sales, information about charities Coles involved with, as well as contests and giveaways. It also has some recipes, although Coles also has another page dedicated to them. Their main Facebook also links to a part of their website for online customer service, however any issues or queries customers have don’t appear to be addressed on the Facebook page itself.

Google+ is another area of social media Coles is using. This appears to be basically an ‘edited’ version of the company’s Facebook page, showing some of the more important posts and not updating as frequently. On this service, just like with Facebook, there doesn’t appear to be a lot of interaction with and between customers.

Coles also has accounts on Twitter. One is the main Coles profile, which generally serves the same purpose and tweets the (exact) same posts as Facebook. There is also an account for Coles Online, the company’s online store. The tweets from this account are usually to let users know about any technical issues the system may be experiencing which would affect them, however, there are also tweets about sales available through the store or competitions the company is running. However, both accounts also answer a lot of customer queries, in a casual yet professional way, and it does a lot to both help those people and humanise the company.

Another area where Coles is quite active is on YouTube. Here, they have a range of content available, including cooking technique tutorials, videos from and about competitions they have run, reports about the company from the media, and advertisements, both current ones and 'classic' old ones for the nostalgic user. Here, the company is putting then platform to good use, providing their subscribers with a wide range of content and most are sure to find something that interests them.

Another website that Coles is using well is Pinterest. Mainly this is used as another platform to share their recipes, however it worked especially effectively here. Coles is able to sort those recipes into various categories by pinning them to different boards. It also places the focus on pictures of the food, rather than the written recipe, making exploring the board very visually appealing. Coles has also has created some original content for this platform, rewarding those which track them on this social media tool instead of spamming them with posts the have already seen on other sites.  A great example of this which I especially enjoyed is the pictures of the carved fruit.

Coles also has a blog on their website. This contains longer posts than their other social media platforms, allowing for those who are interested to learn more about the subject to do so. The blog includes a wide range of post subjects, although they are mainly about new products. They also include posts about various charities the company is involved with, cooking or food tips and posts about their supplier farmers. The blog has a good mix of posts that have already featured in other places as well as ones exclusive to the blog.

McKinsey Value Levers

Coles is using their social media to help achieve two of their organisation functions, marketing and sales, as well as customer service. Of the value levers which fall under marketing and sales, the one that Coles is implementing the most effectively is ‘use social technologies for marketing communication/interaction’, however, they do really need to work on their interaction in most platforms. The company is almost certainly also trying to leverage ‘generate and foster sale leads’, and ‘derive customer insights’, and they have a great opportunity and the ability to do these effectively.

Coles is also beginning to utilise the ‘provide customer care via social technologies’ lever in customer service. However, Coles still has a lot of work to do in this area on certain platforms, as well as generally fostering more connection and interactions with their customers.

Do you know of any retail companies using social media and other social technologies more effectively than Coles? Let me know in the comments.