This is ROI formula:
Many corporations use Return on investment (ROI) to evaluate business performance and efficiency of investment. When Enterprise 2.0 relate to incomes and costs, it is difficult evaluation and calculation directly. Many firms prefer to use money to evaluate value. However, some benefits cannot use money to replace it, such as productivity, employees’ loyalty and corporation’ reputation. Companies’ implement several policies need to pay extra costs. Hence, many corporations using social media because of low costs, and companies do not spend more time to training their staffs. It can greatly decrease policy of implementation costs and increase to anticipate benefits.
The gains from productivity
The corporation use social media which have a lot of communication and interaction can effectively collect and integrate idea and experience. Staffs may through these social media improve mistake even get new thinking. When employees introduce new idea in working, their productivity will become more powerful.
The gains from employees
Some firms manage staffs who will think employees using too many social media may affect regular working efficiency. However, staffs may through social media share their thinking and opinion, so employees will feel freer and sense of presence. Finally, it can increase staffs’ loyalty in corporation. Besides, employees’ feedback can assist manager to make a correct policy timely.
The gains from corporation
In corporation section, high quality productivity and loyal staffs will affect companies’ positive growth. Customers and employees have immediately feedback in social media which can provide fine exchange platform. Therefore, corporations progressively improve their mistake and achieve customers’ requirement. Ultimately, the company gains their reputation.
Some return on investment (ROI) examples
Vamplets is a small business. They are using Facebook advertising propagate their company. However, Vamplets needs to pay $250 cost of advertising per month, and then they gain extra $1000 income actually. This is their positive return on investment of 300%.
The Creme Brulee Man is a food truck in the America. They update their next location via Twitter. They allow have new customers following their new state at any time. Besides, using Twitter remind customers they will move to new location. In just over a year the Creme Brulee Man Twitter account has gathered over 12,000 followers which have a huge number.
Houlihan’s is a restaurant chain in the America. They have around 100 restaurants. Their main competitor is Applebees. Houlihan manager runs a private social network which is called “HQ”. They are via social media and e-mail send exclusive discounts and promotions to customers. In 2008, they are quickly built up 10,000 members of the network. Hence, social media also can increase ROI for small company.
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