Starbucks Social Media Sucess

IMG_1350It is with sadness in my heart that I write my last post (for a while) on enterprise 2.0.  From next post, I will be writing about other topics such as travel, fashion, politics just to change things up a bit. We have been talking about social media technology and how it adds value to organisational business functions.

With that information out of the way, today we will be looking at social media Return On Investment(ROI) calculation i.e.looking at how these organisations actually measure the benefits of social media. roiROI is the measure of the ratio of money gained or lost on an investment to the amount of money invested and is usually expressed in percentage. My initial reaction the first time I heard about social media ROI was, the old and traditional way of calculating ROI will definitely not be applicable to social media. But, Steve Schmidt said that, ” measuring social media ROI is possible so long as the efforts are focused on building network of engaged customers, meaning that non-monetary goals achieved by the organisation can be translated into money and calculated. Some of these goal are;

  • Increase brand awareness
  • Increase leads and sales
  • Improve online reputation
  • Retain clients

But the non-monetary goals above is useless and wouldn’t make any difference to the organisation if they don’t know how to turn them into paying customers in order to be able to calculate the Return on Investment (ROI). To do this, they have to tie the results from their social media use to actual monetary business value. In the example given by Priit Kallas, the organisation may have 1,000 Facebook fans and get 100 visitors per month from their Facebook fan page. 25 of those visitors make a purchase that gives 500 dollars of profit. So if the quality of fans is constant, each additional fan will generate 50 cents of profit per month. They could use up to 49 cents per month acquiring more fans through advertising or other activities and still have a positive ROI.

static-starbucks-final-withstarI will be looking at Starbucks’s social media ROI calculation. Starbucks is a good example of an organisation that have invested a lot of money in so many social media technologies. A few posts ago, I talked about how Starbucks launched “my Starbucks idea.com” in 2008,  a forum for consumers to make suggestions, ask questions and, in some cases, vent their frustrations. The founder of Starbucks, Howard Schultz did this to turn the dying business around. The website now has over 190,000 registered users with over 150,000 ideas submitted and over 900 of these ideas implemented.

As of December 2012, Starbucks serves 60 million people per week in over 55 million countries generates a total revenue of 13.3 billion dollars, over 22 million Facebook fans, 1.5 million twitter followers. With the launch of their loyalty card and mobile payment app, Adam Brotman Starbucks’s digital officer said that they now have 51 million monthly visits across it’s mobile platform, 25% of store transactions are prepaid with 2.1 million mobile payment transactions done per week and also the amount of dollars loaded on customers Starbucks cards increased by 20%. Brotman said that as for their Return on investment, the combination of their web, mobile, and social efforts gives them “a lower cost of marketing per customer“.

Though they (Starbucks) did not exactly say what their return on investment was or how much was invested developing and managing these technologies, it is evident (from 2012 annual reports) that their net revenue increased from 10.4 billion dollars (in 2008) to 13.3 billion dollars (in 2012).

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Amnesty International Reaches Out

amnesty_prisonerA few weeks ago I discussed some of the value levers organisations use to add value to their various business functions. This week I will continue with these levers but will be focusing on a particular sector and a particular business function. The social sector is made up of groups, foundations, cultural institution, etc. According to McKinsey, these various organisations are social by nature and depend on social technology to enlist volunteers, raise funds and source for continued support.

Amnesty International (AI) is a non-governmental organisation  that I happen to volunteer for. Founded in 1961, it is a worldwide movement of people campaigning to protect the human rights. Their main objective is to create a world where every person enjoys all the rights stated in the Universal Declaration of Human Rights and other human rights standards.  In 2011, Amnesty International had provided an opportunity for significant human rights change.

For a non-governmental organisation such as Amnesty who is constantly under pressure to maximize funds, the use of social media to rapidly disseminate information across the global network is beneficial as it is of very low cost. To effectively discuss the benefits of value levers to Amnesty International business functions I will be using one of the functional areas and its associated value levers as discussed in McKinsey GIobal Institute, MGI analysis report.

Executing Mission (Education & Engaging supporters)

education_1Amnesty International (New Zealand branch) released a Facebook app called Trial by Timeline to help educate and make the public aware of their work and the existing in balance in human rights around the world, by letting them ( in a more creative way, through the app) experience first hand what it might look like to live as human beings without the basic human rights. The app does this by analyzing the user’s Facebook profile and shows them what punishments some of their comments and/or behaviors could cost them in another country, assuming there was no freedom of  expression. Amnesty International uses this app to further spread their message regarding freedom disparities across the globe.

Amnesty International (UK) in 2009, used social media to engage their supporters by asking them to drop a coordinated social media bomb used any social technology tool such as Twitter, Facebook, etc. at exactly 1:10. This was to get their supporters to raise awareness about the violence against women in the UK and the message read “each year, 1 in 10 women in Britain experienced rape or other violence in the UK“. As of June 2013 and as part of an ongoing effort to engage the Chinese speaking human activists and supporter all over the world, AI launched  a Chinese speaking websitethat will provide resources and information in the form of blog entries and articles to the Chinese whose global influence are constantly growing.

Hopefully, it his post will go a mile to convince you to get involved with Amnesty international and contribute to their cause. Don’t forget to visit my must see places page on this blog to share your opinions, share and recommend places that you have been or would like to visit and why. Thank you, until next time, Goodbye, Addios, Adeu, Au revior.

Your Customer Reflects Your Business

Shoes-of-Prey-270x180Hello again and welcome to my enterprise 2.0 blog, where I bring you the latest on social technology and the and how it influences organisations (large, medium or small) today. Last week, I showed you a glimpse of enterprise 2.0 in action using Starbucks and Ford as an example.Today’s post will be focused on how businesses can make use of social technology to add value to their business.  Whether we want to admit it or not, social technology has improved our connections and is responsible for some of the ideas that have come to be via brainstorming.

According to MGI  (pages 35-40), there is a large untapped potential for businesses to use social technology to add value in a way of improving communication, knowledge sharing, and collaboration. From their research in 2012, they identified 10 value applications of social technologies that organisations use to create value in their organisational functions. But I will be using Shoes of Prey as an example today, to focus briefly on four them as it applies to two segments of the organisation value chain.The two value chains I will be focusing on today are;

  • Product development
  • Operations and distribution

Shoes of Prey?  Shoes of Prey is an online retail store based in Sydney (where they recently opened their first shop) that lets you go on their website, register and design your very own shoes which will be hand-made and then delivered (free of charge) to you. They make different types of shoes for different types of feet (narrow, wide, odd,big feet etc). This medium business was founded by three friends in 2009;

  • one is from a law and advertising background and
  • the other two were former Google executives.

In Edelman Australia post, Shoes of prey co-founder, Jodie talks about how social media boosted their business from her lounge room to the international business it is today. She said that reaching out to YouTube wiz kid, Blair Fowler (who has over 1 million subscribes) gave her and her partners’ a stepping stone, as she had over 200 million viewers on her YouTube vlog. With over 30, 000 Facebook fans and over 7,000 followers on twitter, Jodie said that their strategy for success with social media was replying quickly and relevantly to posts on their pages and also mention Twitter as “a great proactive tool” that engages customers, taking you to them instead of waiting for them to come to you.

Product Development (co-creation and deriving customer insights)

barriers to product developmentAsking customers to design their own shoes using the shoe and sophisticated material templates found in the 3D design tool on their website, is what makes Shoes of Prey so unique to other shoe manufacturers and retailers, as you get to choose the shape, color and size of your shoes and get it produced (hand made, I might add) and shipped to you in any part of the world. The idea to customize your own shoe was born when Jodie, realized that she never seemed to find one shoe that had everything she wanted.

It always gives a good feeling looking at a gorgeous shoes and realizing two things;

  • It’s yours and
  • It’s your design!

Earlier this year, Shoes of Prey teamed up with Foxtel’s Fox8 channel to promote one of their international series Carrie’s Diary in honor of the lead actress’s obsession for shoes . As part of the promotion, Shoes of Prey set up a competition to Fox8 viewers via Facebook. The competition was for every contestant (including your truly) to log in via Facebook, sign up, design, submit and share a pair of shoes daily for 30 days for a chance to win one of your shoes at the end of the competition, they also encouraged contestants by announcing daily winners each day. Through this strategy, Shoes of Prey was able to get a statistics of the kind of shoes people liked and after the competition, used this data to email contestants (potential customers) with suggestions of shoes they might want to order from them especially during the holidays(brilliant,right?I still get suggestion emails).

Operation and Distribution (forecast and monitor, distribute business processes)

effective-salesTaking a feather from MGI, organisations that keep track and monitor their social media can use information derived, to improve their inventory and how the business functions. Shoes of Prey uses its Twitter and Facebook page to advertise their products and also collate customer feedback on their products by improving on the best ones and turning the bad ones into something positive. They also use twitter as a medium of employment.

In my opinion, to improve customer engagement, I believe that their website need a little more work and they might also consider inculcating some gamification  features,in form of reward such as discount vouchers, gift cards etc.,  in their website (most designs, best designs etc.) to draw more people to design and order for shoes.

Until next time, Goodbye, Adeu, Addios, Au revior.