Enterprise 2.0 & ROI

Through the organisational views, the implementation of social technologies  is not only covered the expectation of the returns on the monetary side but also those intangible benefits. This might possibly include all changes in the working processes/structures that drive the organisation’s performance, especially communication and collaboration. In order to determine the ‘success’ on how the organisations adopt and apply the social technologies, the return of investment (ROI) is somehow require to be measured for both quantitative and qualitative ways. For this post, I decide to discuss on the ROI scope of the social technology implementations through my chosen organisation, ‘Comcept’ as a case example.

Comcept is an independent Japanese game company that works on both design and development. The company launched its Kickstarter project, ‘Mighty No.9’ at the end of August 2013. Its funded budget was set to be approximately $900,000 as its minimum goal. There was no specific monetary in details on how this amount of the budget could broken down into which sub-costs, but it might surely consist the cost of the game production elements (e.g. programmers, designers, artists) and the cost of the tiers’ physical products (if the company specified/stated them in its announced project).

Illust. by Sarun Y.

Illust. by Sarun Y.

During the funding period (Aug 31, 2013 – Oct 1, 2013) of the Mighty No.9’s project, Comcept had engaged both of its fans and gamers through its project’s social media channels (Facebook and Twitter) along with keeping the updates on its official Kickstarter page. At the current state of the project, the company has successfully reached its minimum goal (within 48 hours after the project launched) as well as some of its stretch goals. By using the social media monitoring tool such Topsy with the main keywords of Mighty No.9, the result really demonstrated that there are high active numbers of around 300 mentioned tweets about this project during the first 3-5 days after the project went live, not even mention its Facebook page (1,077 likes) and its search term (270 hits). These quantified results reflected the phenomenon on why the project could be able to reach its first goal within the short period of time.

On the final date of the project funding (Oct 1, 2013), the funded amount was completely ended with $4,046,579 (with Paypal amount included). According to the progress graph from Kicktraq, it visualized on the growth amount touched the pledged bar of $4M. From this, I decide to use the finalized numbers based on the Mighty No.9’s official Kickstarter page to do the ROI calculation. To calculate the actual social media ROI from this Kickstarter project, I would like to bring up the formula first, and it is “ ROI = ((Gain from investment – Cost of investment) / Cost of investment) x 100% ”. By substituting the mentioned numeric values, the equation is going to look like this:

ROI = ( ( [ $4,046,579 – [ $4,046,579 x 5% as Kickstarter fee ] ] – $900,000 ) / $900,000 ) x 100%  

       = ( $2,944,250.05 / $900,000 ) x 100%  = 327.14%

Illust. by Sarun Y.

Illust. by Sarun Y.

About other related major benefits that the Comcept company gain from this project through the use of social technologies, they can be categorised and listed as follows:

  • Tangible benefits
    – Being able to reach and go beyond the company’s goal with the amount of $4,046,579 through crowdfunding with the total of 67,226 backers16,088 Twitter followers (with 1,088 mentions), and 15,146 Facebook likes (with 6,129 mentions) within only a month.

  • Intangible benefits
    – Being able to engage fans/gamers and gain their inputs for the new game ideas through the use of crowdsourcing
    – Extending the online communication options through available social media channels (Facebook and Twitter) as approaching wider fans/games communities and promoting/informing the company’s project
    – Gaining customers’ insights (especially the trends) and being able to improve/develop the products that meet the targeted audiences
    – Exploring the new market through the use of crowdfunding

By basing on the outputs and benefits that I have mentioned above, I think that the case of the Comcept company is an interesting organisation’s model in terms of applying the current social technologies to maximize the company’s performances. From this, the company can be able to get connected with its loyal and new customers (as the contacts’ extension) much more easier than ever. Together, they can shape the organisation’s future in which bringing the quality of the products/ services into the next stage. That is also considered as another key value where it can be captured apart from the monetary returns.

More interesting posts can also be found at some of my wonderful supporters’ blogs (Adam Farne SangLise WintherJohn CoglanXavier WongZhonghao Liang ). Please feel free to check them out :)

About Sarun Y.

A Thai student who continues his master degree in IT at Queensland University of Technology (Brisbane). Love drawing and think it as another effective way to convey the message to his audiences.

10 comments

  1. Hi sarun, that’s an excellent analysis! The use of Kickstarter as an enabler and using that service to drive social media chatter is a very impressive way of developing a following, crowdsourcing and in this case, meet your targets. Do you think contributing factors of the ROI like crowdsourcing and followers will remain a part of their ROi for the forseeable future, or do you think it will decline if neglected now that they’ve met their goals?

    • Thank you for your feedback, Sam 🙂
      Based on your question, I think that it depends on the purposes of the organisations who use the crowdfunding websites (e.g. Kickstarter, Indiegogo). Through my findings, I found that many successful funding projects would have those contributing factors (e.g. followers) remaining until the following funded projects were completed and shipped to those backers who supported them. In some cases like this Mighty NO.9, although its Kickstarter project was over, but the organisation still required to use the crowdsourcing for its game development (http://kck.st/19BxWKi) as letting the backers to be parts of shaping the game (e.g. suggesting opinion or voting for the game prototypes and designs) and make it matching the taste of the fans, gamers or backers as possible.

  2. Hi Sarun
    Thanks for yet another great post – and for mentioning me in your final remarks 🙂 I also learned a lot from your post and especially your reflections. I really like how your stated both the tangible and intangible benefits in the end of your post. You mention the many “likes” and “followers” as tangible benefits. Surely I agree due to the fact that these numbers are directly measurable. I have, however, come to wonder how/if the increase in followers and likes can actually be translated into direct tangible benefits to the company. I mean; sometimes I also “like” a company but it does not always mean that I will buy their product, if i.e. it is too expensive for me. Do you think that an increased number of likes and followers = company success and increase in ROI? Anyway thank you for a great blog! I surely had fun and learnt a lot following it 🙂

    • Hi Lise,
      It is like what you have mentioned in the comment about benefits’ interpretation (tangible and intangible). To answer your question, I think that there are different metrics in measuring the success of the company. I agree with you that people can ‘like’ their favorite organisations without the intention of buying the products from them. By having high numbers of ‘likes’ and ‘followers’, I think that the organisations might possibly consider them as parts of their engagement success (http://bit.ly/ODc7zj, http://bit.ly/16yVRYl). In terms of ROI, the above factors might be put as ‘immeasurable’ value that caused the growth of products’ sales without using them for the actual calculation. Thank you for your visit and comment, Lise 🙂

  3. Tom

    Very innovative case example of calculating ROI! However, setting a $$ amount on the gains from social technology does not take into account the immeasurable value and benefits that are also gained. You mentioned an increase in Facebook likes and Twitter followers as tangibles. If they are tangibles then an exact $ amount could be placed on them which obviously it cannot. They should be looked at as an intangible benefit from social technology. The reason why a $ amount cannot be placed on them is for a number of reasons which include:

    1. How do you value the emotional attachment backers will have to their contribution? 2438 backers do not get a digital copy of the game so there is no way of determining whether they will purchase a full copy. Positive semantic analysis will imply a future purchase but the total cannot be determined.
    2. The increase in Facebook and Twitter followers will create a massive increase in discussion and exposure online. This kind of advertising is immeasurable.
    3. A successful kickstarter campaign also provides the perception that the concept is a great one. This will create an increase in the game’s value which again cannot be measured.

    As with many big companies the reliance on ROI is now less about determining $$$ but more about seeing positive value growth which in turn will turn into profits!

    • Thank you for your feedback and detailed comment, Tom 🙂
      I totally agree with you on the interpretation of ‘likes’ and ‘followers’ as ‘immeasurable’. My first intention for the following intangible benefit section was to summarize and identify on how the final amount consisted of, and I mistakenly split them up into sub-points. Lately, I just fixed this part, and I wanted to thank you for pointing it out clearly. Through my findings, I found that those ‘likes’ and ‘followers’ could be counted as the engagement success (a sub-type of tangible benefits) (http://bit.ly/ODc7zj, http://bit.ly/16yVRYl) in which requiring different metrics to measure them.

  4. Hello Sarun, Another interesting blog, I do like the Kickstarter business model as a platform to facilitate crowdfunding models, and with a 5% fee any ROI would look good.

    • Hi John,
      I like the Kickstarter’s business model too. However, every business has risks involved. With the use of crowdfunding, it means that those who are ‘backers’ give their trusts to what they believe/support for with levels of expectation. For some cases of the unsatisfied end-product results (http://bit.ly/17hlHga), it might possibly impact the organisations’ reputation and cause the decline of the customers’ loyalty (http://bit.ly/17kXfJT). Thank you for your comment, John 🙂

  5. Sarun great post, I like how you broke up the ROI and calculated the percentage. Do you think that more companies should use monitoring tools such as Topsy to calculate their ROI?

    • Hi Wong,
      I think that the use of social media monitoring tools can potentially help the organisations with their ROI calculations (e.g. gaining insights and trends, securing the orginsation’s reputation) (http://bit.ly/13hob12 , http://bit.ly/13IUdz2). However, there are various aspects on how each of the organisations interprets the value from the social technologies’ adoption either monetary value or immeasurable value. To answer your question, I might say ‘yes’ for more companies to use the following monitoring tools based on above given reasons. Thank you for your visit and comment, Wong 🙂

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