Social Media Lowers Failure Costs & Risks

Failures in a new product launch, new process or software implementation can cost both small and large businesses a fortune. Hence there is a lot of analysis before heading into such initiatives. It’s called risk mitigation and that’s sensible. Today, Social Media can have a measurable impact on reducing those costs of failure and provide more opportunity. Such approaches could be very useful in a down economy.

So how then? Social Media can reduce the cost of failure in the areas of marketing, sales, software implementations and product development best. By employing the right tools, a company can “float” ideas for a marketing campaign internally (i.e. via a Wiki) or externally via Twitter or a blog or newsgroup discussion. It’s key to remember that in these cases it’s not about a large volume of participants; it’s about the right size group that makes it viable to gather feedback.

If a company is looking to launch a new product feature and has cultivated a core group of loyal customers through a blog, Wiki, Twitter or newsgroup, then it has a ready source of fast feedback participants. A few questions can be floated and feedback monitored. The result may be realizing the new feature is not necessary or recommendations may result in reducing manufacturing or development costs. This is a measurable and impactful way to using Social Media tools and groups to reduce the costs of failure.

Internally, a company might use similar tools to float general questions and queries. Responses can be gauged. In terms of a sales initiative, production can have input to an upcoming planned sales initiative. This way, the production team is aware that a ramp-up might be necessary, or they can suggest additional features that may make a product sell better. Either way, the cost of failure is reduced, and there is greater cross-team functionality put in place.

In this current economic climate, the costs of failure will be weighed even more before decisions are made on expenditures. Social Media tools and practices can help avert those failures much earlier, likely leading to improved products and productivity and best of all, better bottom-line impact.