When is a sale not a sale? a user not a user?

Interesting chat today with the guys at @UK.

@UK provides an e-procurement service aimed mainly at the NHS and local government. So, first of all, they have to sell the service. And they did all right at that, signing up over 60 users. (My guess is they have 10-15% market share in local authorities, not bad for a fairly new business.)

The problem though is that flogging the e-procurement service doesn't really generate revenues. Those only come when transaction flow starts. The council has to link its suppliers up - and integrate e-procurement into the workflow. And this just wasn't happening.

Fortunately @uk has realised the problem and is now sending consultants into existing customers' operations to revitalise the concept and bed down the new processes. It's also focusing on low hanging fruit such as savings on taxi fares (a big area of spend for some rural councils) and temporary staff recruitment.

The problems aren't even technological. They're about just getting the clients to start using the process, finding the right areas to target, getting the paperwork done.

The programme is already starting to bring benefits. @UK will keep bringing on new clients, but the real opportunity isn't about winning new deals, in the short term - it's about getting the existing signed up users to exploit e-procurement properly.

Now so far of course this is only of interest if you're following the public sector software sector in the UK. But in fact, it's very relevant to social networking sites, which have a real problem with inactive users.

I'm a good example. I maintain a vestigial profile on Facebook, Friends Reunited and a few other sites - but I hardly ever use them. I don't really have time and they're not an integral part of my business.

I imagine this is the same for a lot of their users. So that a few million 'registered users' may come down to just a couple of hundred thousand active ones.

Now social networking has become a little boomlet - "Dotcom Boom 2.0" if you like. I think the social networking sites really need to show how they are keeping their users loyal - how many of those users are coming back. And if they don't have a strategy for encouraging more active usership, then they may well come unstuck as soon as new user growth starts to slacken.