Why Ratings and Rankings Won’t Work in Most Cases?

Rahul : We are facing a “Problem of Plenty” these days. Thank God, we have ratings and rankings to our rescue.

 

Niraj : Sorry I didn’t understand clearly. Can you please explain ?

 

Rahul : Most of us search for the stuff we are looking for, on internet. The moment you try to search, internet throws so many options that you get confused rather than getting a clear answer.

 

Niraj : Yes, you are absolutely right. So what solution did you find for your rescue ?

 

Rahul : The Ratings and Rankings. They help you a lot.

 

Niraj : Ok. Who gives these ratings and rankings ?

 

Rahul : I don’t know.

 

Niraj : So this is where it becomes interesting. Most of the times, these ratings and rankings are given by media portals who are looking to earn from higher traffic. Also, more than often, they have an “arrangement” with the service provider or product seller to give a particular rating or ranking.

 

Rahul : What !! I didn’t know this !! But does it impact me in any manner ?

 

Niraj : Of course it does. There are researches being carried out, that these ratings and rankings impact the decision making of customers. Thus, any flaw in these, leads to incorrect decision taking.

 

Rahul : Is there a possibility that these ratings and rankings are honest ?

Niraj: Yes, possible. Let’s assume that they are given honestly. But it may still be the case that they are not the best fits for everyone.

For example, a film critic who is fond of a socially responsible movie, might give a 1-star or a 2-star rating to a comedy movie. But if you are a comedy fan, you may happen to like that movie for yourself.

A food critic, who gives lot of weightage to ambience and service, might give a 5-star rating to a fine dine restaurant, but for you, a roadside Panipuri might be a better pick.

why ratings and rankings won't work in most cases _

Rahul : You are right. So what is making these ratings and rankings so popular, even though they have lot of flaws in them?

 

Niraj : The Illusion of Quick Assessment !! Most of us feel that we should take an informed decision by doing some “research”. But the fact is, we neither have the time, patience or resources to do in-depth research for everything.

As a result, we fool ourselves by saying that we are doing research; whereas all we are doing is, looking at ratings and rankings given by someone and blindly believing it.

You would be surprise to know that, there are many businesses coming up these days, who solely survive on this model. They provide ratings and rankings to “some” products and “attract” visitor traffic. Then depending on the number of “visits” on the website, they contact the product sellers and demand a “premium” to give higher ranking / rating to them.

 

Rahul : This is so shocking !! So what should we do?

 

Niraj : First of all, come out of the illusion of doing research. If you really want to do research, do it in your core area. For other areas, identify an expert from your known circle and ask him/her. Make sure that the expert understands your need and then advises you accordingly.

 

Second, stop expecting free lunch. If someone is actually taking some pains to research and provide ratings and rankings, why should they be offering it to you for free? If you are not paying for it, you are the product.

 

Last but not the least, Segregate crucial and non-crucial issues. Be experimental in Non-Crucial issues and Non-experimental in Crucial issues. For example, if you want to visit a restaurant or watch a movie, you can experiment. But if it’s a medical issue, or an investment issue, then don’t experiment or blindly go by ratings. Look around for some experts, references so that you don’t land up in trouble.

 

Rahul : Thank you so much Niraj. I have realised my mistake. I will not go by rankings and ratings from now on.

We look forward to your feedback and comments on the above article.

 

The Author Prof. Saurabh Bajaj (BE, MBA, FRM, CFGP, CIA, AFGP) is CEO with Nidhi Investments, Mumbai. His articles have a readership from 78 Countries across the Globe. He may be contacted on CEO@nidhiinvestments.com if you have any questions.

 

(The views mentioned in the article are personal opinion of the author. The characters used in the article are imaginary).

 

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Published by professorbajaj

Prof. Saurabh Bajaj is an Author, Mentor, Motivational Speaker and Wealth Planner. He has done his MBA from Narsee Monjee Institute of Management Studies (NMIMS) Mumbai, one of the top 10 management institutes in India. He holds the prestigious FRM (Financial Risk Manager) degree awarded by Global Association of Risk Professionals (GARP), USA. Till date, there are less than 15,000 professionals in the world, who have been honored with this degree. He has also been awarded CFGP (Chartered Financial Goal Planner) Certification by AAFM (American Academy of Financial Management). After his MBA, he joined J P Morgan, the second largest Investment Bank in the world. He has worked with J P Morgan as Risk Analyst for more than two years. Prof. Bajaj also holds an Advisory certification awarded by AMFI (Association of Mutual Funds of India). During his stint at Bombay Stock Exchange, he has handled Investment Management and Treasury operations of the BSE Corpus. He has set up an entrepreneurship venture in the field of Wealth Planning and Investment Consulting under the name “Nidhi Investments” and holds the profile of CEO. Prof. Bajaj sits on the Expert Panel of CAClubindia.com and MBAClubindia.com as Investment Expert. He is actively involved in investor education through his blog www.professorbajaj.com which has a readership from 78 Countries all over the world. His articles are also regularly published in caclubindia.com , mbaclubindia.com , totalca.com , charteredclub.com, bankbazaar.com and lawyersclubindia.com . He has been awarded the title of “Best Article Writer” from caclubIndia.com in Jan 2012 and has been selected amongst “Top 5 Technical Writers” from all over India in Feb 2013. He has been invited by various TV Channels like SPIN TV, CNBC TV18, UTV Bloomberg Etc for programs like "Expert Advice" , "What Markets Want ", "Budget Analysis" etc. He has been invited by Several organisations like Lions Club, Rotary Club, Agrawal Welfare Foundation, Rajasthan Mandal, Agroha Vikas Trust, Union MF, UTI MF, Arthamitra Gurukulam, Vidyalankar Institute of Technology etc for expert lecture on "Smart Investing", "Life is A Celebration", "Financial Freedom", "The Digital IFA" etc. He was ranked 8th Merit at All India level NMAT which got him selected for MBA programme at NMIMS, Mumbai. He did his MBA with Capital Markets as his specialisation. Soft Skills has become an inevitable part of every selection process and teaching learning process these days. The students from small towns and tier II cities, in spite of being talented and well equipped with technical skills, are seen struggling in the selection process. This is because of their lack of exposure to these soft skills. Mr. Bajaj has a zeal for training candidates to develop these skills and has been imparting the same on since last two years. This zeal and passion inspired him to set up his own firm called “Knowledge Circle” which aims to train candidates for soft skills. Till date, he has trained more than 5000 participants from over 220 organizations across various fields of soft skills. He has been associated with MSBTE (Maharashtra State Board of Technical Education) to conduct Soft skills training workshop for the faculties of Polytechnic Colleges in Entire Maharashtra (Mumbai Region, Pune Region, Aurangabad Region and Nagpur Region) since last 8 years. He has also been associated with ICAI (Institute of Chartered Accountants of India) for training CA Students on various topics related to Communications skills, Group Discussions etc. He was invited by Fr. Agnel Polytechnic College, Vashi for a motivational workshop for faculties. He was also invited by Vivekanad Polytechnic College for "Communication Skills and Email Etiquette" training for non-teaching staff. Apart from these, he has conducted “Capacity Building Soft Skills workshop for Faculties” at ITI Gunj, ITI Pusad, ITI Digras and ITI Umarkhed. This was the first ever soft skills workshop for faculties in the history of ITI’s in Vidarbha. He was also invited by Shivaji Education Society to conduct similar Soft skills workshops for the faculties and office staff of Shivaji Junior College Pusad, Shivaji High School Pusad, Shivaji Vidyalaya Belora and Shivaji Vidyalaya Bhojla. He has conducted training workshop on “Effective Presentation Skills” for the relationship managers of HDFC Mutual Fund, Andheri Branch, Mumbai. He has also been invited at College of Management and Computer Science, Yavatmal, College of Dairy Technology, Warud, B N College of Engineering, Pusad, B D College of Engineering, Wardha, College of Engineering and Technology, Akola, Dr.N.P.Hirani Institute of Polytechnic, Pusad etc. for the Guest lecture on “Developing Interview Skills”.

15 thoughts on “Why Ratings and Rankings Won’t Work in Most Cases?

  1. Great write up Saurabh it will be eye opener for those deal with ranking and ratings only for taking decision for critical things like investment

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