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The advent of the internet and social media has seen an explosion of the use of rating systems. However, ratings do not work on all ocassions. If you plan to use rating systems, you should be aware of when it will work and when it will not

As a society we are fascinated with ratings. However, we also seem to have a very strange love-hate relationship with the concept of feedback and ratings. Starting from our childhood, we get a report card from our school. Most of us resented that, but we accepted it. In our professional lives, we procrastinated completing the 360 feedback forms and appraisals forms. Finally when we were given warnings by the HR department, we complied and after some deep introspection gave ourselves 5 on a scale of 1-5 on most categories. Less than one percent of us fill the customer satisfaction surveys when we have really bad experiences with some product or service. But then something seems to have changed. The advent of new media, particularly the Internet seems to have given ratings a whole new life. User content, feedback and rating seems to have become synonymous with the next generation of the Web.

Suddenly everybody and everything is all about ratings. Ebay has ratings for sellers and buyers. Google has them in its page ranking algorithm. Twitter provides a count of number of followers, somehow linking the number of followers to an individual’s importance or power. Yelp has user provided rating for restaurants, and the list goes on and on. Then came services like Digg and StumbleUpon, which were purely rating engines.

How did this change happen? In a very simplistic way, all these ratings made some sense. Companies had to have a Web presence to generate revenue. Search engines were a way to be discovered on the web. The web in turn is growing exponentially to become a huge information wasteland. Rating engines provided a route to higher relevance, readership and in turn better search engine visibility and hence higher revenue. Frankly given the rate at which content is being generated online, ratings became a way to put some sanity to all the madness.

But the question remains why otherwise reluctant people are behaving the way they do, rating anything and everything they come across. Is it because the Internet finally provided us, the lesser mortals, the anonymity we were all looking for express our opinions on just about anything? Is it is the power of the new media in amplifying our voices? The first step to answering this question was to understand the boundaries or guidelines on when ratings a tool make sense?

To answer this question, I started considering the applicability of the rating concept to the real world and the virtual world. I sought out examples of when rating worked and when rating did not work. Based on these simple examples, I tried to arrive at some simplistic conditions under which ratings and rankings made sense and when it did not.

Examples in the real world, where it worked
Our teachers have rated us. Over time, as a society we have made a real science out of this. There are standardized test like SAT, GMAT and CAT, still debated about, but nonetheless widely accepted. What is important to note about these tests is that over time we have done a lot of careful, deliberate and constantly evolving scientific research to fine tune the testing (rating) process.

Magazines like Consumer Reports have rated things like cars and electronics. These reports allowed a common man to buy complex and expensive gadgets, appliances based on qualified testing reports done by experts. Often, the publishers of these reports use a lot of scientific methods and derive data before they publish these reports. So these were our ‘trusted referrals’. It is important to note, that the person and/or the company providing the ratings, put their professional reputation behind their reports.

Where it does not work
Personal views and beliefs, like religion, best wife, best dad, mother’s cooking.

Emotion and things not easily measurable like favorite music and favorite teacher are difficult to rate. Again who is publicly willing to declare that their math teacher or their English teacher was not their first choice? For the most part we kept these discussions to the privacy of our friends and family. If cases where we disagreed, we agreed to disagree.

Examples in the virtual world, where ratings worked
Ebay, where transactions are between strangers, has a system to rate buyers and sellers. However, the feedback mechanism was limited to only people who had done transactions with each other. Trust is very important factor for commerce. Ratings provided by other buyers about a seller allowed reputation to be built over time.

Yelp provides local ratings for restaurants and other local services. The rating of these local restaurants provided a verification function, but food critics cannot reach all restaurants in every city and street. And the actual cost of any incorrect feedback is not earth shattering. The worst case is one bad meal, if your friends ("social referrals") recommend a place you do not like.

Examples where ratings are not available
LinkedIn is your professional network. It does not have any rating mechanism. If you valued someone, you would add them to your network, if you did not value the relation, you simply don’t accept their invitation to connect! If you liked someone, you could write short recommendations, but that is not the same as ranking them.

Facebook is where you hang out with friends and family. Lots of dialogs happen on Facebook, but it has no rating mechanism. Do you really want to tell your relatives how they stack-up against each other?

So based on this very simplistic analysis, I would conclude with the following set of parameters to evaluate whether rating or feedback works is a good tool or not?

When will ratings work

• When you are dealing with small or one time transactions.
• When you are dealing with something impersonal (like a car or a celebrity).
• If there is science or expertise behind the rating.
• If it is okay for the person providing the rating to declare himself. That is, the person who is providing the feedback is willing to go through some level of scrutiny or is ready to take some responsibility for his action.
• There is some concept of limited ‘currency’ to rate.

When ratings will not work

• When you are dealing with a long term/strategic relationship.
• When you are talking of something close and personal.
• When emotional/unquantifiable items are being used to make the judgment.
• When anonymity is important, example you have to give a 360 feedback to your boss!

I know you are probably thinking about rating this article, but in my opinion you, me and the opinions have characteristics that are not very conducive to ratings!

Sachin Saxena is Vice President, Product Management & Marketing in the Consumer & Enterprise Business Unit at Globallogic.

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