Sam Decker of BazaarVoice has posted a cogent, well-supported argument on the business benefits of social applications.  Many of the themes will be familiar to readers of this blog, including the substantial cross-functional reduction of Friction that can take place when you have this kind of data, and some of the cultural issues surrounding adoption of the data-driven culture.

Here’s what I don’t get though. Many of these goals could be accomplished though customer service analysis and other data the company already has. In fact, you could argue in many cases, the data you get from internal sources would be better since you could work some of the bias out of it and correlate with actual behavior.

For example, you could look for inferior products (high return rate) and set flags for investigation of the product.  This could happen prior to tons of people ordering the product (say, after 100 units shipped) and posting all kinds of bad news about it.  You could also see the impact of buying these products on? customer value.

Now, I understand the beauty of (in the case of BazzaarVoice, anyway) managers “seeing for the first time perhaps because it’s now right there on their site “how customers talk about their products”. This is really powerful, of course. Say I’m a buyer in a category and I see people posting that the stuff I’m buying is crap. That’s not good for my overall sales profile, and I have to wonder who else “upstairs” might be looking at these same comments.

The problem I’m having is this: if a company really wanted to find out what their customers were thinking, and if they had the internal guts to really Compete on Analytics and Optimize the system, why would they wait until social applications came around?  Why wouldn’t they already be using the traditional tools and data available to them to accomplish the same thing?

If the answer to this question is “we don’t have the data”, that is really code for not believing in, so not making investments in, the systems and people to use the data they have.

So, for a company like this, is the “transparency” of social app data on a web page enough to overcome the above type of thinking?  Or will such a company simply continue to ignore this data, because they always have in the past?

For companies that already do a lot of service and product analysis (for example, remote retailers like the big catalogs and the TV Shopping channels) I have no doubt the addition of this social data, lined up properly with the traditional customer analysis, will provide a rich new data set to Optimize their systems with. 

For all the rest, will they simply nod yes to the idea that “reviews increase conversion” like they’re a piece of art on the web page and then move on from there, not actually using the social information to bear down and start Optimizing the system?  It’s one thing to sit around and say, “Yea, Reviews = Good” and quite another to actually take down a product, fire a buyer, create new service policies, etc.

That’s the big question – will companies take real action? 

If not, how would you go about changing this company view?