Tom Webster, writing and speaking

The Venn Diagram That Could Destroy Your Business

Added on by Tom Webster.

A simple concept, simply illustrated. Some small percentage of Internet users create content on the social web - let's call it 10% for discussion - while the remainder do things like curate, consume, etc. Also, some percentage of your customers represent your core customers - the people who are most passionate and loyal purchasers of your product. Again, for the sake of argument, let's also call that 10% of your customer base. So, you have a small percentage of content creators, and a small percentage of business drivers. That's what you know. Here is what you probably don't know: where those two types of people intersect, i.e., what percentage of the people talking about your brand on the social web are also your best customers? Ideally, there is some overlap here, as my brilliantly artistic Venn diagram suggests:


The intersection of those two circles - the passionate, core consumers who also talk about your brand online - is gold, right? You want to make these people happy, don't you? Well, yes and no. You do if and only if you can actually identify them. And you can't identify them, unless you know what that Venn diagram looks like for your brand.

Not knowing what this diagram looks like can destroy your brand, if you use the social web as an input. Your quickest path to extinction is to make business decisions based upon information mined from social media if you don't know what your Venn diagram looks like - and if it turns out to look significantly different to the one above.

There are two distinctly different dangers here - one obvious; the other, less so. Here's the obvious one:


In this instance, the people talking about your brand and the people who actually buy your stuff have very little overlap. Here, mining social media for insight serves not as a proxy for "voice of consumer," but as a dangerously irrelevant "voice of the noisy." And if you don't actually know what this Venn looks like for your business, you run the very real risk of ruining your product, brand or reputation with your actual customers if you derive "actionable" insights from the social web that turn out to be irrelevant banter. In other words, if the folks at Maybach designed their cars based upon mining Twitter data, they'd probably have a jacuzzi in the trunk.

Again, where the values of social content creators align with the values of your core customers, social data is potentially useful, but not always useful. Consider this, very different Venn diagram:


The amateur mind sees this as an optimal situation - after all, your core customers and your social content creators are in near-perfect alignment, right? Yet this Venn could kill your business just as efficiently as the previous example - indeed, it might even happen before you realize it.

This sinister pattern is what I would call the Optimization Trap. Slavishly following clickstream data will get you here quicker than anything. Imagine, if you will, mining your data to discover that Fridays are the best day to send your emails, and farm implements are your most successful topics. So, you send out Friday Farm Implement emails. From there, you mine your Twitter data to discover that most of your audience is athletic, so you tweak your Friday Farm Implement email to talk about combining farming and exercise. Subsequent mining reveals that your Friday Farming Activity emails are most often opened by young men, so you include videos of top models using your farm implements for various activities.

With each optimization, you've actually veered further and further away from the dead center of your market. If you over-optimize, you end up continually refocusing on ever-smaller bullseyes, moving closer and closer to irrelevance and away from the needs of the majority of your market. Eventually, you will achieve nearly 100% optimization, making five people really happy. You'll be like the frog placed in a pot of cold water, slowly heated to boiling. By the time you realize you're in trouble, you're being served with garlic butter and a nice green salad. Tastes like chicken!

Two of these Venn diagrams could kill your business - if you make decisions based upon social data and don't know what your diagram looks like. Luckily for you, it isn't rocket science to draw your brand's diagram - if you do the work. This is the kind of work I do for clients every day, but the most important thing you can do to determine these things about your customers is simply to ask them. Only when you calibrate your social data mining with other online or offline research can you know the nature of your two circles. Figuring out the size of these circles - and the extent to which they overlap - is the key to making social media data useful. Not doing the work is negligence at best, and could indeed be fatal.

Sorry about my "art." I won't quit my day job. :)