The input and collaboration of many creates value in most cases, but probably not in all. One of the best examples of  the concept of “crowdsourcing” is Wikipedia, but there are some troubling signals that have come out of this social experiment:

More than 49,000 editors left Wikipedia’s English-language edition during the first three months of 2009, compared with only 4,900 for the same quarter a year earlier, according to the Journal, quoting Spanish researcher Felipe Ortega, who analyzes Wikipedia’s online data. Though the service still boasts about 3 million active contributors, volunteers are leaving more rapidly than new ones are joining, the Journal said.

I fancy myself as being relatively well informed, and have joined, as a volunteer a few months ago, but upon reflection saw nothing particularly valuable to contribute to the existing entries. How many in a “crowd” makes “crowdsourcing” meaningful?

Wikipedia co-founder Jimmy Wales discussed the site in an interview with Silicon.com earlier this month. With 13 million articles now written and edited by volunteers, Wales sees conflict among multiple contributors as the exception.

“We really tend to use less inflammatory words–try to stick to basic facts and so on. And that’s come about over time. You have people come together [on Wikipedia] with different viewpoints but in general they tend to be trying to work in good faith to collaborate and compromise with other people.”

Wales also pointed out that most articles are written by a small number of people.

“One of the things that’s important to know about Wikipedia is that the entries that are edited by hundreds of people are really anomalies,” he told Silicon.com.

So at what point does the wisdom of the crowd turn into madness of the mob? I am not envious of Wales as he seems to manage as explosive a process as nuclear fusion, when it comes to the emotions and egos involved, but I am very grateful that he does, as many studies have shown that Wikipedia’s authority is every bit as high, if not higher, than one of traditional encyclopedias. The accuracy is the context in which authority of an encyclopedia is judged.

The debate about the comparative accuracy of Market Research methods (online vs telephone) made me think about the context in which this debate is formed.

The debate over the accuracy–and quality–of survey research conducted online is flaring at the moment, at least partly in response to a paper by Yeager, Krosnick, Chang, Javitz. Levendusky, Simpson and Wang: “Comparing the accuracy of RDD telephone surveys and Internet surveys conducted with probability and non-probability samples.”

In my opinion the methods employed to conduct the research are secondary to the findings, the researcher attempts to discover. This opinion usually draws very heated arguments from purists who are concerned that “biases” cannot be avoided if the research is “tainted” by pre-conceived expectations. I totally agree – biases cannot be avoided, or even tried to. Without biases the results of research is meaningless and it is a lot more useful to introduce the power of the context and some structure into the process.

Meaningful, representative and actionable results of market research are more important than its marginal accuracy.

There has been a lot written lately about the rising power of customer recommendation within the Marketing paradigm. Here is just one of many examples and a reference to an interesting study:

Advertisers are courting social-networking users because their opinions matter. More than 65 percent of 112,000 people surveyed said they were more likely to purchase products or services that they learned about in social-networking services, according to Powered Inc., an Austin-based company that helps Sony Corp. and Hewlett-Packard Co. with their social-media strategies.

Edelman Trust Report finds that trust in a recommendation, based on a personal experience of “a person like me”, has grown from 22% to 58% in just 6 years. AdAge reports that

77% of U.S. consumers trust businesses less than they did a year ago; consumers trust their peers’ opinions online more than any other source.

So what is the meaning of “peer” or “a person like me” in an environment where most recommendations are anonymous, and the privacy of the recommenders is carefully protected? We all are too well aware of unscrupulous, and not too smart, marketers who tried to game the system with widely publicized failures. However that very publicity seems to give us even more confidence in our “peers”, as it makes us believe that the sheer number of reviews and recommendations of the authors, and the transparency of the Internet, will protect us from being manipulated.

Sometimes positive recommendations of people I know, will cause me not to buy the recommended product, as I am aware in our taste or skills difference. So how can we rely on the experiences of people we don’t know at all? I suppose there is a lesser of the two “evils” compared to the traditional advertising or “unbiased” review by paid experts.

As we have been working on mining Consumer Insight from unstructured and untagged data, I have been thinking of ways to algorithmically weight and/or score the “Authenticity” and “Authority” of authors in context of their product reviews and recommendations.

I believe that when someone (I hope that is me) manages to figure how to do it, it would bring even more value and meaning to the market. It would enable us to make more personalized choices.

Another thought, related to peer2peer marketing, came to me while I was exploring Cloud Expo grounds of the Dreamforce 2009. Not a single Dreamforce exhibitor with “Marketing” in their name, was demonstrating any functionality or service focused on learning and/or managing Customer Experience. I suppose to most people “Marketing” is still “Shouting”.

I was watching TV and an Apple commercial came on mocking PCs and the Windows 7 Operating system, claiming that their machines are No1 in terms of Customer satisfaction. I decided to verify this claim using our Product Reputation Market Intelligence Reporter, still under construction.

I filtered out 3 laptops that enjoy the highest reputation in terms of Customer satisfaction out of 123 laptops in our data base, based on Customer Reviews, and the data suggests that Apple does in fact tell the truth. Congratulations Apple!

Bob Warfield of HelpStream is really up to something. There is a lot of talk about ROI on Social Media efforts, but very little to show that makes any sense.

Process barfs on Social because most Business Process isn’t integrated with Social.  E2.0’s biggest problem is it lacks Business Process for the most part.  Too often it does get thrown out as the silver bullet.  Process insists on considering all aspects.  If you’ve left something out (like your E2.0 software), the Process is not well formed.  If there are ways of doing things outside the Process, that’s a bad thing, at least from the Process viewpoint.

What we’re lacking is simply a harmonious marriage of these two.  Social should be integrated into specific business processes, perhaps many if not most specific business processes.
When it isn’t, what we have is ad hoc.  We lose the advantages of process in terms of measurability, repeatability, and consistency.  We lose the support of those who cannot see value in anything but process.  In the worst case, it sounds to them like we’re just arguing to hold hands and sing “Kumbaya”.

This is a matter of where we are in the evolution of Social Business Software.  The 1.0 E2.0 products are tools, in some cases they want to be dignified as platforms, but they lack that process component, so they really shouldn’t  be dignified as platforms because they are too incomplete.

We see this evolution over and over in Enterprise Software.  First we get the tools.  This is the Silver Bullet stage.  Everyone expects magic.  But the tools lack specific process.  They do not solve specific problems.  They are not solutions, in short.  As such, the results one sees from them vary wildly.  Nobody seems to be able to put their finger on why things work sometimes and not others.  The answer is that without Process, they haven’t factored people properly into the equation.  Ironic when this happens to software whose whole purpose is to be Social!

The formalization of “process” implies that there is a beginning, an end and most importantly – a purpose of repetitively doing something to achieve a specific result. The language of Social is extremely ambiguous, the current practitioners are still trying to figure out what exactly to expect, how realistic the expectations are and whether or not a  good experience can be consistently replicated.

“We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.” — Aristotle

Just because some people are innately more social and enjoy “socializing” on-line, doesn’t mean that there is an ROI in it by default. Therefore it is critically important to ask and answer some of these simple questions:

1. What areas of my business could possibly benefit from a Social Media investment in time and/or money? Do you want to use SM for Marketing? To supplement Advertising campaigns? Do you expect to reduce your overall advertising budget as a result of these efforts? To learn about Customer Experiences with your product or service? Do you expect to decrease customer churning?
2. What existing processes and/or practices would be affected? Improved? Broken? Improved?
3. Would my Customers/Employees/Suppliers be affected by this investment?

I would suggest to drill into each one of them to evaluate any potential opportunities, size up potential investment and set very specific, and realistic expectations. The search for ROI too often starts well after the proverbial “horse is out of the barn”.

Customer Satisfaction is usually considered to fall into a domain of Market Research, to me however it is one of the most critical traits of CRM universe. After all Customer Relationship Management systems suppose to help you to know how your customers feel about your company, your service and your product at any given time. Therefore it is critically important to enable and optimize two ways communication channels for capturing and analyzing the resulting information flow.

“Unless the source of the statement (or comments) has extremely high qualifications, the statement will be more revealing of the author than the information intended by him. This applies, of course to matters of judgment. A book review, good or bad, can be far more descriptive of the reviewer than informational about the book itself. This (probabilistic) mechanism I also call Wittgenstein’s ruler: Unless you have confidence in the ruler’s reliability, if you use a ruler to measure a table you may also be using the table to measure the rule.”

The underscored words are mine.

“The information from an anonymous reader on Amazon.com is all about the person, while that of a qualified person, is going to be all about the book”

“Fooled by randomness – The hidden Role of Chance in Life and in the Markets” – Nassim Nicholas Taleb

While completely agree with Mr. Taleb, I would like to pose that this is mostly accurate statement about general sentiment of liking or not liking a book or a product. The reference to disagreement of accuracy of specific fact stated in the book and questioned by the commenter, assumes certain expertise and therefore is about the book and not about the writer of the comment. The reference to specifics of the customer experience with a product also provides more practical information than reflection of commenter’s personality or expertise, and if it is consistent with experience of other customers , warrants further analysis, and perhaps corrective action.

Based on Wittgenstein’s ruler approach I would suggest that CSI (Customer Satisfaction Index) is a relatively low value instrument which is like a thermometer, can point to the fact that your body is not well, but to none of potential reasons for that condition.

I just re-read an excellent post by Jeremiah Owyang, Partner, Customer Strategy, Altimeter Group. Jeremiah used to work for Forrester Research and just recently joined Altimeter.

There are a couple of quotes that got me going:

Beyond monitoring, insight from the social sphere is untapped. Social media monitoring is just the first baby step, most companies haven’t tapped into what the data actually means.

We all, more or less, know what monitoring is. Here is an example of a definition that come reasonably close to the marketing context once you replace the word “enemy” with something more appropriate, like “customer” or “consumer”, depending on the group one monitors.

The act of listening, carrying out surveillance on, and/or recording of enemy emissions for intelligence purposes.

So presumably obtaining “the insight” and/or “intelligence” is the purpose of the exercise. The most interesting question for me is – what are we going to do with this precious intelligence when we get it?

The second quote from this post, used here out of sequence, is

… marketers were used to ‘Bowling’, where marketers could easily throw a message down the aisle and hit the pins with great confidence. Now, he eloquently describes, it was more like ‘Pinball’ where a marketer could load the message up, shoot it out, but have no idea where it will end up.

It seems to me that despite all the talk by the “enlightened” marketers, by “listening” they still try to figure how to control the flow of messaging, rather than to “hear” and engage into conversation. “Listening” without a deep desire to “hear” cannot yield any insight or “Aha!” moments, and these are the ones that lead to meaningful and measurable actions. No wonder there is so much yearning for a magic ROI formula for Social Media investments. It is very difficult to figure a return on knowledge you didn’t bother to learn yet.

Learning is not compulsory. Neither is survival.