As mentioned in my previous post, the buzz around social media is also building a discussion regarding its soft and hard ROI. To my opinion, its measurable and financial value in B2B will further be recognized overtime yet is set to contribute to enhancing at least:
* Market | Customer | Competitive intelligence
* Product development & innovation
* Customer support services
* (Open) innovation
* Lead / Demand generation
* Employee related benefits such as enhanced project collaboration and knowledge sharing, employee motivation, (management) development & retention
For political, lobby-intensive or CSR-related organisations social media additionally might bring value in terms of Return on Impact. Social impact therefore in terms of mobilizing citizens’ voice by organisations that target both other businesses as well as consumers such as @350, @WWF, @changents and others. But let’s focus now on businesses that need to satisfy their shareholders.
Speed, transparency & efficiency key benefits
Almost 1700 executives from around the globe took part in a longitudinal 3 year study by McKinsey on social media entitled ‘how companies are benefiting from web 2.0’. 69 percent of respondents report that their companies have gained measurable business benefits, including more innovative products and services, more effective marketing, better access to knowledge, lower cost of doing business, and higher revenues.
Scanning diagonally thru its key results, it seems that bigger speed & transparency as well as reduced (travel & communications) costs are seen as most significant business benefits. Increasing revenue is mentioned by some, yet this is the lowest percentage. Whereas ‘measurable gains’ were reported, the McKinsey researchers unfortunately did not explicitly state whether and in how many cases there actually was a positive ROI in financial terms – dollars, euros, rupiah, sterling or yen.
Me, myself and my community
The McKinsey research distinguishes between the deployment of social media internally to employees and externally to partners, suppliers and customers. Judging by the relative number of respondents as well as the relative biggest gains reported, internal at present seems to be the most popular category. The survey does highlight the relative usage of SM across verticals – not surprisingly high tech and professional services frontrunners – and reports a 35% gain in employee motivation.
With the relative loose connection in most western companies between organisation and employee, this is a significant gain that merits further study. Whilst in many cases the increasing individualization and economic downturn may cause low levels of employee-employer commitment, which in turn results in suboptimal retention – the need to build a powerful corporate community is as strong as ever.
The massive uptake of Facebook, Hyves and other social, friend communities reflects the need for human beings to belong and connect. Why therefore would a corporate environment not try to build a successful, happy community of (professional) employees? To my opinion, this should definitely enhance a firm’s capacity not just to attract, but also to attach the right workers to the right place at the right time. A ‘happiness factory’ – perhaps.