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The business value of social business.Customer survey results.

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For your employees, social business tools are a no-brainer. Easier ways to collaborate with each other, customers, and partners; simpler ways to share information; faster resolution of service issues; and robust customer conversation monitoring across all forms of social media (from Twitter to Facebook to blogs) all make the lives of line employees in sales, strategy, support and marketing easier.

Most executives and managers recognize the powerful change that social engagement inside and outside the company has already wrought on workflows, sales processes, and organizational decision-making. They understand that their business will become more inherently social as the use case for the Internet changes to a more social orientation, both in the consumer and business realms.

Regardless, these same executives must justify every dollar spent on software and information technology (IT) products. Yes, they know that Social Business Software

improves productivity, improves customer communication, and boosts sales. But, as in any big IT buying decision, these leaders want to identify a clear return on investment (ROI). The good news is that the ROI for social business tools is now quite clear and that these tools can dramatically boost customer and employee satisfaction, reduce turnover, boost sales, and improve idea generation within an enterprise or organization.

In December 2010 an independent survey firm conducted the largest survey to date examining the impact of the use of Social Business Software in corporations. The

survey covered more than 500 respondents ranging from individual contributors to CEOs at more than 300 companies. Responding companies ranged in size but most were large organizations with 80% having greater than 1,000 employees, 60% having greater than 5,000 employees, and 10% having greater than 100,000 employees. These companies spanned 35 different industries, including IT, healthcare, financial services and government. The survey results provide strong evidence that social business tools produce more than sufficient ROI, on average, to make any senior executive happy.

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At consumer electronics retailer Best Buy, a .1% increase in employee engagement survey ratings at a store translates into a $100,000 bump in annual revenues at that location, according to research published in the Harvard Business Review. A 2007 study by polling and research company Gallup Organization found that publicly traded companies rated in the top 25% in

employee engagement metrics posted earnings per share (EPS) growth nearly 9% higher than EPS growth of comparable companies rated in the lower half of the study. According to other research from Gallup, more satisfied employees equates to higher levels of all manner of related KPIs including: customer loyalty (+56%), productivity (+50%) and employee retention (+50%).

Higher engagement equals higher profits.Social tools have made it easier for people to communicate with others that are important to them in the consumer realm and to better maintain friendships. We found this also to be true in the world of social business. Our respondents reported an increase in employee connectedness by 39%. The survey respondents also reported that social business tools increased employee satisfaction by 30%. All of this adds up to higher level of employee engagement. This is a critical metric that translates into real, hard-dollar ROI.

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Better employee retention, faster onboarding means higher sales per employee.

The accepted estimate for the cost of turnover is between 100% to 150% of an employee’s annual salary. From this estimate, based on an employee base of 5,000 with an average salary of $45,000 per year, a mere 1% decrease in employee turnover could result in $1 million in annual savings.

Likewise, new social business tools incorporate socialization capabilities that make it easier to join and become fully productive in an organization. This also has real hard-dollar benefits. The average knowledge worker requires between four and six months to effectively learn and assimilate the necessary skills and processes to perform their job effectively.

During that onboarding period, those workers actually cost money in several ways. Because they are operating at a reduced rate of productivity but receiving full salary, they act as a drag on the key metric revenue per employee. Those same new employees are more likely to slow down fellow employees by asking questions or reducing process speed in the organization.

Leveraging social technologies can dramatically reduce onboarding time. Social business tools encourage knowledge sharing in unstructured formats more amenable to search. Similarly, social business tools encourage informal micro-communications between employees. These low-impact, casual exchanges facilitate knowledge transfer and impart wisdom without causing significant task disruptions.

A finding that the use of social business tools corresponds with increases in social engagement and improves employee retention is a particularly critical finding. Any reduction in employee turnover results in immediate cost savings to an organization.

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Survey respondents reported a 32% decrease in time required to find appropriate answers to questions or information requests. That decrease led to faster decision making, among other benefits. Further, users of social business tools claimed that they enjoyed a decrease in time spent to find information and experts (as opposed to answers) of 34%.

These types of reductions, again, can seriously boost a corporate bottom line. IDC estimated that the average knowledge worker expends 9 hours per week searching for information. This multiplies out, IDC found, to an

average annual cost of $14,000 per knowledge worker per year. The average sales person spends more than two hours per week looking for the correct marketing collateral. By reducing this search time by a mere 10 minutes per week a business could realize a revenue boost of greater than $50,000 per employee. For a large organization with thousands of sales people, then, implementation of effective social business tools could result in revenue increases ranging well into eight or even nine figures, depending on improvements in information dispersion and retrieval and minimization of search time.

Better answers, less time searching, faster access to expertise.Finding the right answer to any given question can, in a diverse organization, prove frustrating. Multiple players may have bits and pieces of an answer. The player who holds a key piece may be on vacation. The same sort of collaboration and easy construction of transparent knowledge repositories that helps new employees onboard quickly also empower employees to more quickly locate the right answer to a question.

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According to IDC, the average knowledge worker spends 13 hours per week writing and reading emails. That represents an annualized cost per employee of $21,000. This number likely stretches higher in higher-paying organizations or verticals, and for higher job roles. There are indications the IDC numbers are quite conservative. A survey of 1,000 workers in the United Kingdom by Star, a provider of on-demand computing and communication services found that employees spend, on average, 32.5, 8-hour work days a year on email alone. Reducing time spent by 27% would then represent a cost savings of greater than $5,000 per employee, per year. Beyond hard dollar savings, reducing email has other beneficial effects such as making information more accessible and more searchable by the entire organization and breaking down information silos that lead to related inefficiencies.

In terms of reduction of meeting time, social survey respondents reported a 26% decrease in time spent on meetings. Respondents also noted that meetings work better in conjunction with social business tools due to social mechanisms for capture of unstructured information through tags and other collaboration tools and annotation tools.

In another logical extension of these social tools efficiency gains, survey respondents reported a decrease in duplicated tasks of 27%. They generally stated that social business tools made it easier for them to ascertain what colleagues are doing and to search quickly and effectively to determine whether all or part of a task they are about to undertake have been previously executed by another employee.

Ultimately, these types of gains mean nothing if there are not corresponding increases in productivity. Respondents did in fact report an increase in product collaboration and overall productivity of 37%, an indication that the previously described reductions in unproductive activities translated into increases in productive activities.

Enhanced collaboration meant that social business tools users enjoyed higher project success rates and were also more likely to complete their projects on time. All of this, of course, is driven by ideas. And the use of social business tools correlated positively with new ideas, as well. Respondents reported a 32% increase in ideas generated within a company. The next big idea, in other words, may come about because an employee had more time to think, chat with colleagues and contemplated the possible rather than bang away at mundane tasks.

Less email, shorter meetings, higher productivity, more ideas.Even though we are now in the Post-Dilbert era, jokes about corporate life and copious time wasted sitting in unnecessary meetings and replying to useless email chains still ring true for many employees and senior managers alike. Social business appears to alleviate and moderate these woes. Our survey respondents reported a 27% reduction in the amount of email sent inside their organizations, a result largely attributed to the use of social tools.

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On the flip side of sales is customer support and engagement. Social business tools drove real gains in those areas, as well. Respondents reported an increase in communication with customers of 42% driven largely by newfound abilities to engage customers in multiple channels simultaneously, from social channels to traditional email and Web channels.

This increase in communication accompanied a 28% decrease in support calls, as customers were able to get the support they needed more easily without picking up the phone. A decrease in volume of support calls has multiple benefits. First, it reduces costs for your support team. Second, it allows support staff to concentrate on bigger cases and to better focus on cases involving the most loyal and important customers.

Besides improving support, better communication with customers also translated into a 34% increase in feed-back and ideas from customers. Social business tools make it possible to not only crowdsource innovation but also tap into the product expertise residing in your fan base.

Customers of companies that deployed social business were also more engaged not only with the company but also with each other. Survey respondents reported that social community usage by customers drove significant increases in web site traffic from existing customers (34%) and new customers. Giving customers a reason to come back to the website regularly also added to website sales, with survey respondents reporting an increase in web-based sales (usually the lowest cost type of sales) of 26%. Engaged employees are happy

employees and the same applies to customers. Respondents recorded an increase in customer satisfaction of 33%, increased customer retention of 31% and increase of brand advocates by 31 percent.

The increase in brand advocacy is particularly valuable. According to Forrester Research, 94% of customers trust “word-of-mouth” recommendations while only 14% trust advertisements. Social marketing company Zuberance found that brand advocates are worth five times more than average customers because they tend to spend more and also will recommend a company with each recommendation on a searchable social media platform reaching at least 150 other people. So any tool that can boost brand advocacy will quickly return its cost through enhanced sales and enhanced word-of-mouth marketing and customer activations.

Better addressing the needs of customers, selling more.All of the above gains are primarily inward facing. So what types of ROI benefits do social business tools provide to more outward facing functions? As it turns out, the outward-facing process gains are comparable. Survey respondents reported an increase in their sales win rate of 23%, an increase in new customer sales of 27%, and increase in existing customer sales of 27%. The increase in existing customer sales is particularly impressive because those sales likely involve a higher gross margin due to the reduced cost of sales inherent in reselling or upselling to existing customers.

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The benefits of social business tools seem quite logical. Based on sheer adoption numbers (hundreds of millions of Facebook users are hard to refute), consumer social platforms have clearly illustrated a tremendous ROI in terms of allowing consumers to more easily keep track of projects, communicate with friends and family, and share information.

Social platforms for enterprise logically extend these capabilities to the organizational realm. Further, these

tools provide an invaluable framework upon which to build a true social enterprise. This enterprise super-charges growth and innovation by tapping into the power of socialization and social applications to drive monetization while simultaneously boosting employee morale, saving everyone time, and keeping customers so happy they won’t shut up about your company.

Social Business ROI is real. And it’s huge.After reading through this information, any CFO should think differently about social business tools and view these new technologies as clear revenue boosters with well-defined ROI that benefits both the top-line and the bottom-line.

“ The imperative for business leaders is clear: falling behind in creating internal and external networks could be a critical mistake. Executives need to push their organizations toward becoming fully networked enterprises.”

McKinsey Quarterly, “The rise of the networked enterprise”,

December 2010

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Social business software survey results.

All statistics from a survey conducted Dec. 2010 by third-party market research firm. The survey was open to all Jive Software customers. More than 500 people from more than 350 companies responded; more than 60% of respondents came from companies with more than 5,000 employees. More than 10% of respondents came from companies with more than 100,000 employees. Nearly 1/3 of respondents use Jive for both internal and external communities.

39% increase in employee connectedness.

25% decrease in onboarding time.

29% increase in executive communication.

34% decrease in time to find information and experts.

27% reduction in email sent.

26% decrease in time needed for meetings.

27% decrease in duplicated tasks.

32% increase in ideas generated within the company.

23% increase in win rate.

32% decrease in time to find answers.

37% increase in project collaboration and productivity.

30% increase in employee satisfaction.

24% decrease in need for travel.

42% increase in communication with customers.

28% decrease in support calls.

33% increase in customer satisfaction.

31% increase in customer retention.

34% increase in feedback and ideas from customers.

34% increase in brand awareness.

27% increase in new customer sales.

27% increase in existing customer sales

34% increase in web site traffic from existing customers.

32% increase in web site traffic from new customers.

26% increase in web site sales.

31% increase in brand advocates.

33% increase in clicks from Google searches.

27% increase in channel sales effectiveness.

26% decrease in channel support costs.

Jive. First in Social Business.Jive is the largest and fastest-growing independent Social Business Software company in the world.

For more information, visit www.jivesoftware.com.

jive software 325 lytton avenue, palo alto, ca 94301 o 1.877.495.3700