The wisdom of crowds

For years, I traveled around the world visiting points of sale and talking with sales teams, the people who are closest to our customers and who receive daily feedback on our products. It is hard to say that we have a customer-centriccompany if we do not listen to our customers and sales teams. Without a doubt, they provide the best method for getting to know a market.

What topic does sales team feedback normally revolve around? The people who work closest to the customers are focused on sales, and one of their main concerns is having the right product at the right time to increase their sales. At the majority of businesses, key product decisions like the structure of the collection, selection of models, or purchase risks are in the hands of one or a few people, those with the most knowledge and experience. Obviously, it works like this due to the speed at which new collections are launched each season. However, it is crucial to support these people with all the information possible so that they can make the best decisions possible. The difference between selecting the right product or not is key to fiscal year results.

Quantitative information is provided to us through all of the data that we can gather (more and more every day), and by using a business intelligence tool we can transform it into reporting that helps us to make decisions. But what happens to the qualitative data, found in the form of collective intelligence, held by our teams and customers? First, is this valid information? Let’s use a simple example. Imagine that you are the person who makes decisions regarding the summer collection of a fashion company. The designer has presented you with two shirt models: one with a photo print (Model A), and another with an illustration (Model B). Both are white cotton shirts with the same pattern and same price, but the print is clearly what is going to define success for the item. We have to select which of the two we want to launch onto the market (or which to buy more of), and obviously we have our experience and the “scent.” But can the sales criteria from our teams help us? Let’s suppose that we ask four people, and three lean towards Model A. Would we trust such a small sample size? Probably not, but it might have an influence on us. And if we ask 40 people, with the same result? (75% Model A) What if the sample size were 400? Or 4000, and with answers from every point of sale on the planet? If 3,000 of our store managers decide on Model A, the most recommendable course of action would be deciding on the photo print. What is the logic behind this concept?


James Surowiecki has studied this concept of “collective intelligence” and in 2004 he published a book called The Wisdom of Crowds: Why the Many Are Smarter Than the Few, which examines how decisions made with the backing of group information often end up better than those made with information from a single individual. In order for groups to operate better than individuals, certain circumstances must be present, and he lists four conditions necessary for collective decisions to be stronger than individual ones:

  • Diversity of opinion
  • Independence
  • Decentralization
  • Aggregation

Collective intelligence affects us in our daily lives, from Google search results to Netflix recommendations, or when we are looking at restaurant ratings trying to decide where to eat. In the case of retail businesses, diversity of opinion can be achieved by expanding the sample to different profiles, independence by allowing each person to share their opinion without influence, and decentralization at the moment feedback is received from outside from the head office.

The challenge is how to aggregate this data and turn it into information useful for making decisions in an agile fashion. We have always had polls and market studies, but before the digital age that has allowed everyone to be connected to the internet through our phones it was complicated and expensive to get the opinion of a lot of people quickly and efficiently. However, currently technology does allow us to do this. A tool like wemuse, developed specifically to make the right product selection decisions through sales team feedback, allows us to have access to this collective intelligence right on our screen, immediately.

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