How social proof and herding effect become a marketing strategy
Link to article: https://techcrunch.com/2011/11/27/social-proof-why-people-like-to-follow-the-crowd/
In the current society influenced greatly by web information and networks, how people make decisions becomes a very important topic for scholars to investigate. Do people all follow the same set of algorithms? Do they make decisions based solely on their own experiences and thinking? In the Networks lectures, we learned that it is not the case. Instead, most people make decisions and judgments based on what other people say or behave, and they may even make decisions completely different from the information they receive. In the article, the author provides some insights by stating multiple ways people depend on social proof mechanisms to make decisions and judgments from a marketing point of view.
First, the author claims that the best way to grow the user base of a product or service is by harnessing a concept called social proof, “a relatively untapped gold mine in the age of the social web”. He then describes five kinds of social proof: expert social proof, celebrity social proof, user social proof, wisdom of the crowds social proof, and wisdom of your friends social proof. Among them, the wisdom of the crowd social proof is highly related to the concept we learned in the Networks lectures, which claims that people are highly influenced by other people’s actions and tend to think those actions are correct. The author of the article articulates that highlighting popularity or large numbers of users implies “a million people can’t be wrong.” Some examples are also provided. For example, “Callaway Digital Arts finds that when any of their kids’ iPad apps is listed as a top 10 most popular app in the iTunes App Store “Top Charts,” daily downloads vault 10x over the prior week – but being the No. 1 most popular app drives 30-50% more daily downloads than being No. 2”. The fact that the No.1 most popular app gets a lot more downloads than other products can be explained by the Network effect concept we learned in class: users’ demand on products depend on how many other people buy them. In fact, the wisdom of the crowds doesn’t necessarily provide much information about the quality of the products. I can easily think of examples, such as that the best-selling items on Amazon are not necessarily the best items, but the fact that many people are buying them makes them seem more trustworthy.
Another interesting social proof that the author mentions is the “wisdom of friends” social proof, which provides a lot of 1:1 impact to the business models. For example, friends inviting friends to play through Facebook and other social networks helped Zynga grow from 3 million to 41 million average daily users in just one year, from 2008 to 2009. This concept provides a different kind of credibility to products from the “wisdom of crowds” social proof: instead of quantitative information, the “wisdom of friends” social proof provides high-quality information for users to make a preference between products. This concept, although not covered in the Networks class material yet, can also be related to the “hub and authority” concept in web search. For individuals, their friends provide much higher authority than strangers on the web, so their “recommendations” weigh higher and can greatly influence their own “search results” for products, websites, and services.