Would you buy a product that is over 90% defective?

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Many businesses employ significant resources on quality. Undoubtedly, many names pop into your mind when reading the word “quality”, like: Six Sigma, Seven Sigma, Total Quality Control, ISO something or other, and so on. There is a whole industry sector built around this subject employing hundreds of thousands of people to make sure product and services live up customer’s expectations. Producers of these goods and services want to make the best possible product so the customer will come back for more. Seems reasonable enough. Nothing new here.

And yet, when it comes to social platforms it seems just the opposite is true:

  • 96% of businesses already on Facebook do not advertise on Facebook.
  • On Facebook, just¬†0.2% of total status updates actually reach users for whom that content is relevant, and 1% of that ¬†actually engages.
  • 1% of visits to e-commerce sites come from social channels and less than that generate orders.

Based on this information it seems reasonable to conclude that these platforms are very effective for engaging with members nor for inciting them to action. Consequently, all the articles about viral marketing and the efficiency of social are the exceptions, not the rule. Therefore, the value of social must lay elsewhere. But where?

Obviously this article’s title is a bit provocative but it does get the idea across: there is no value in a product that is over 90% defective. The value must therefore be in the all the other chatter. If you consider social is the equivalent of digital word of mouth then the value is in eavesdropping on what is being said. Businesses can use these platform to listen in on actual and potential customer expressions about their products and engage with them efficiently in an a posteriori way; probably most of the 1% user engagement.

If we look at social from this point of view, this is a numbers game which can only be played by companies with lots lots of transactions, that is big business. A local store or restaurant would derive only little benefit from social and that would probably be at the expense of other more efficient activities.

This perspective is quite consistent with rise of Big Data where sophisticated search techniques are used to find meaning in these large volumes of data. So, as I once wrote on LinkedIn, if you are a SMB, “Don’t drink the Kool-aide”. Social is not an efficient use of your company’s resources.


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