Adam Gartenberg's Blog

Business Analytics and Optimization, IBM and Social Marketing

The big law of small numbers, Part III


Continuing on a theme here, let's look at yet another big law of small numbers.  Last week we talked about how little changes can help you double sales, and how some customers might be worth 40 times more than others.  Today I want to focus on the huge multiplier effect a small number of customers can have on how you are perceived by the entire market.

Once upon a time, if you wanted advice on a product before you bought it, you had limited choices.  Maybe you had a friend or neighbor who had the same product already who could give you their opinion.  If you were looking for a popular product, it's possible that Consumer Reports might have reviewed it.  Beyond that, you were pretty much at the mercy of the sales staff at the retailer and your own intuition based on the blurb on the side of the box.

Nowadays, all that has changed.  Not only is there no shortage of dedicated review sites, but retailers like Amazon put user reviews front and center, giving you a presumably unbiased view into what others think of the product.  

This, of course, is a huge advantage for the consumer, but even for outstanding products, it comes with big risks for those of us trying to market our products.  The reason is that people tend to overemphasize negative reviews, even if they are real outliers.

I know I've encountered this personally, and I'm sure most of you have, as well.  If I'm looking for a new bluetooth headset, and 4 of the 30 reviews on Amazon complain of trouble pushing the volume buttons, or that the audio was choppy... does it really matter that there are likely tens - if not hundreds - of thousands of people using this headset every day?  How many "the item was late and damaged" negative reviews on eBay do you need to read before you move on to the next auction on the list?  One?  Two?  

Those handful of negative reviews can create enough uncertainty - if they had problems pushing the buttons, maybe I will too - that I'll move on and look elsewhere.  Or it may not push me to a competitor as much as stall my decision all together (because, let's face it, there's hardly a product out there with no detractors).  

This really is a tough one to overcome, but there are things you can do.  You can make sure you're actively reading feedback and reviews so that you can proactively address shortcomings in the long term via product enhancements, as well as through short-term marketing tactics.  To follow the above example, if people are complaining about difficulty pushing buttons on the headset, post a short video on your website (and YouTube and elsewhere) showing the best way to hold your hand when pushing them.  You can also make sure you're setting expectations properly, explaining potential issues (e.g., as you get close to the outside range of the bluetooth connection, audio may be choppy) or acknowledging shortcomings so potential customers can make informed decisions (e.g., the noise cancellation is designed for loud indoor settings, but is not able to overcome a brisk walk outside on a windy day).

You can also make sure to solicit and addressing feedback from testers and early adopters, as well, so you can get ahead of any issues before the reviews come in.

And beyond that, you can hope that the law of big numbers (e.g., the hundreds of thousands of units sold, the 5 or 10 or 100 positive reviews that come in for every negative one) work in your favor most of the time.