Using Twitter to Predict Sales

Last Updated Dec 16, 2009 7:57 PM EST

A lot has been written about using Twitter as a means of connecting with customers and promoting your brand, but have you ever thought about using it as a tool for predicting sales? According to a recent article in the MIT Sloan Management Review, Twitter can be a key to deciding "whether to increase inventories or put items on sale in certain stores."

In "Follow the Tweets," authors Huaxia Rui, Andrew Whinston and Elizabeth Winkler explain the model they've created for using Twitter to track product buzz. Their model allows companies to collect data on how the keywords associated with their product or service are performing on Twitter: that is, whether it's the subject of positive Tweets, negative Tweets or -- worst of all -- no Tweets.
To test their model, the authors collected data on Tweets about three movies released the same weekend: The Hangover, Land of the Lost and My Life in Ruins. The Hangover was the only hit out of the three, and it sustained the most Tweets for several weeks after its release, the majority of them positive.

The authors also shared additional advice about using the Tweets you track:

  • Use comments to improve product: While the filmmakers behind Land of the Lost couldn't go back and improve their product when Tweets expressed negative opinions, some businesses do have that option. "Take note of complaints that may help improve the next generation of products," they write.
  • Locate users of influence: The authors advise reaching out to Twitter users with large followings with news about new products and services. The more people writing about you -- positive or negative -- the more you'll be able to predict how your product will perform.
  • Watch for shifts: While it would be impossible to read all of the Tweets related to your product, the authors say that shifting opinions are the key thing to watch. They write, "If the number of positive tweets increases after a company's effort to improve customer service, the tweets will show that the company was successful. On the flip side, a company can also watch for a sudden surge of negative comments and fix the problem as promptly as possible."
Image courtesy of Twitter.
  • Stacy Blackman

    Stacy Sukov Blackman is president of Stacy Blackman Consulting, where she consults on MBA admissions. She earned her MBA from the Kellogg Graduate School of Management at Northwestern University and her Bachelor of Science from the Wharton School at the University of Pennsylvania. Stacy serves on the Board of Directors of AIGAC, the Association of International Graduate Admissions Consultants, and has published a guide to MBA Admissions, The MBA Application Roadmap.