Social drivers and the power of crowd purchases
Look at how socially driven we are to do things. While we may think that most of the time we are self-propelled (some of us are), many more are socially propelled to do the things they do. This is the natural extension of social proof. When we don’t know what to do, we look to others for cues. It is as natural as it is unconscious. The next time you’re in a social setting and you’re unsure of what to do, try to note it. Look around. Feel the awkwardness. And think about social proof because you’re about to engage it. What’s the next guy doing? Maybe we should do that. We’re more driven to do by others than we think, especially when we don’t know what to do next. If we knew what to do, we’d already be doing it. There’d be no need to look around and see what others are doing. We’ve got this.
Social proof is one of the top persuasion principles for a reason. It is so powerful that we often don’t even know it is working on us unconsciously. Whenever we seek restaurant recommendations, we’re employing social proof. Whenever we look at reviews on Amazon, we’re employing social proof. Whenever we see what dinner companions are ordering first before we order, we’re employing social proof. Whenever we ask around the office for new car recommendations, we’re employing social proof. Whenever we ask for potential employer recommendations, we’re employing social proof. Whenever we seek others’ opinions about anything, we’re employing social proof. It is such as fundamental driver of behavior and decision-making that we’d be lost without it. It also functions well as a selling tool. Recommendation engines are simply algorithms driven by the social proof of others’ buying habits, which are then placed in front of other buyers. People see what others have bought and may choose to pair up their purchases accordingly. Testimonials are still very powerful forms of social proof as a selling tool. What have others said about the product or service? We are largely in a review-driven economy. People read reviews like they are Gospel. Few things are as powerful as several dozen positive reviews. Reviews drive sales on Amazon. And reviews are simply another version of social proof. When we don’t know which shirt to buy, we ask around. When we don’t know where to go on vacation, we ask around the office. When we seek out a new neighborhood for our family, we ask other families who already live there what it’s like. This social validation acts as the key to unlock the mystery of the potential purchase.
There is great power in the crowd purchase. As we have seen, people buy and do because of what other people buy and do. While crowds are shunted on Wall Street, they are celebrated in retail. Crowd-sourced movements cause momentum purchases and fund otherwise fledgling or failing enterprises. Indeed, there wouldn’t be many products today without the crowd. This is a celebration because it brings a level playing field and access to early venture funding to those who otherwise would not have access to it. There’s something quite American about that; we’re all about backing the early startup when we’ve seen and heard the right pitch by the right pitchman or pitch woman. We celebrate entrepreneurism here. We make TV shows about it, which also function as a marketing machine for crowd purchases. We know the road for the entrepreneur is difficult and fraught with struggle and potential peril, making it perfect for TV. This only makes us want to engage with them more and soak up their wisdom (and their pitches).
ABC’s Shark Tank is responsible for launching the entrepreneurial careers of many who are on the show, even the ones who do not get a deal. This show is such a marketing machine itself that one only needs a mere appearance on it to get enough public exposure to move units that otherwise were immobile. This is impressive. Many enter the show on the brink of failure, and one appearance in front of the sharks and cameras can be enough to resurrect their fledgling business. While the cynical will call it business made for TV (leaving a lot out as usual), its simple, repeatable format works. Entrepreneurs go on and pitch the sharks. Deal negotiations ensue. The owners either leave with a deal or not, and then go back behind the scenes direct to camera to have a brief discussion about what just happened. Then, onto the next one. It is efficient and effective.
The crowd, the Shark Tank audience, then picks up where the sharks leave off and act. By act, they buy. They aren’t shy about it, either. Often, this audience can boost a company’s sales into the millions within a few months of a show airing one time. By mere exposure on the show, p.o.’s are generated and companies are made. Investment or not, the company benefits from mere exposure.