Return of Investment - JetBlue

Hello everyone! This week we are going to see the impacts from investments made in social media campaigns. Based on my last posts, there is no doubt that social media is the most famous option when marketing campaigns are planned, but in many cases the return may not be clear. That is why Return of Investment (ROI) is a excellent way to analyse how successful a campaign is. Basically, the purpose of Return of Investment is to measure (usually per period) the return of the money invested in something. This ROI case study will analyse the impacts of a social media campaign made in the company JetBlue.

About the company:

http://goo.gl/YrBsBK

JetBlue is an airline company headquartered in the Long Island City neighborhood of the New York City. The company is well known for its award-winning service and free in flight entertainment. JetBlue servers 78 cities with 800 flights per day.

Brief overview of the project:

The company began its studies in social media back in 2011, and found a crescent market with a wide variety in features and capabilities for marketing applications using in Facebook and Twitter. After some studies made, the company chose the product "Buddy Media" from the Salesforce social marketing suite, to run its new social media campaign because of its strengths in creating and managing Facebook tabs. The company's team took 2 months to prepare and run the buddy media properly, and during this time the company trained the team for 20 hours each, which was formed by employees from branding and promotions. The company used to hire outside firms to build microsites to its campaigns, these were proven ineffective and costly. Today, this relatively small team can activate and manage the social media campaigns easily.

The Enterprise 2.0 Project:

Buddy Media is a marketing software suite developed by Salesforce, which schedule and facilitate content across multiple departments. This tool allows to plan and synchronize social events, with analytics features. Based in this review, the software is: clear, concise, able to easily assigning tasks and offers easily digestible and actionable analytics. 

The Return of Investment* project:

The costs:

Software license subscription fees;

Consulting

Personnel;

Training for Buddy Media;

The benefits:

http://goo.gl/6iiJXq page 4

Direct benefit:

Reduction in creative services costs;

Increased sales force productivity by 15%.

Increased manager productivity by 10%;

Reduced communication costs;

Indirect benefits:

Increase in productivity: The analytics make it easier for them to track and analyze the relative success and impact of different promotions and Buddy Media enables them to schedule execution times for various phases of a campaign.

Greater visibility: Allows JetBlue to quickly understand the reach, volume, and impact of a campaign, and understand how participation in a particular promotion is aligned with demographic and psychographic profiles of the audience.

Better promotion execution: Having a standard consistent platform for promotions enables JetBlue to retain its brand image and communication style while quickly activating campaigns and promotions based on changing market dynamics or specific events.

Time savings around streamlined conversations and analytics;

Focus its agency investments on more strategic activities;

OK! But how much are we talking?

Expenses:

Expenses	Pre-Start	First year	Second Year	Third Year
Software	60000	60000	96000	0
Hardware	0	0	0	0
Consulting	0	0	30000	0
Personnel	4,381	4,673	4,673	4,673
Training	4,089	0	0	0
Total	68,470	64,673	130,673	4,673

Benefits:

Annual Benefits	Pre-Start	First Year	Second Year	Third Year
Direct	0	150,000	150,000	150,000
Indirect	0	12,413	12,413	12,413
Total	0	162,413	162,413	162,413

Financial Analysis

The annual Return of Investment was 140% considering direct and indirect benefits, and 122% considering only direct benefits, with a 114% Internal Rate Of Return.

Analyzing these informations we can go further:

The cost benefit ratio: 1:1.8;

Payback period: 8.4 months .

The annual average benefit: $72,916.

Conclusion:

Using the Buddy Media enabled the company to stop wasting precious money and time, and the return of investment clearly shows its benefits. The strength of this ROI approach was not needing a lot of training and changes, which allowed the company to have a fast return of investment.

References

ROI CASE STUDY SALESFORCE BUDDY MEDIA JETBLUE. (2013) (1st ed.). Retrieved from http://www.exacttarget.com/sites/exacttarget/files/Salesforce.com-Buddy-Media-ROI-case-study-JetBlue.pdf

TrustRadius,. (2014). Buddy Media Review (Before & After Acquisition). Retrieved 17 September 2014, from https://www.trustradius.com/reviews/buddy-media-2014-01-20-12-15-19

*The Return of Investment (ROI) is an investment formula given by the expression:

ROI = ((gain from investment - cost of investment) / cost of investment) * 100