I did believe these "cast on iron" tenants as truth till I heard an interesting anecdote from my friend on how a chaotic and panic stricken environment helped create better sales for a product. Wait!!! Isn't it contrary to the conventional wisdom that we have since time immemorial. To understand the reason for this consumer behavior lets explore few situations:
1. Deep Discount sale @ clothes factory outlet during Christmas or Diwali
2. Jewellery purchase in India especially during marriage season or Akshaya Tritiya
3.Purchase of electronic goods at stores like Best buy or Chroma especially during festive days like Thanks Giving Day or New Year Sale
What is common to these environments beyond just great deals? Crowded stores.. Have you ever noticed why most of these purchases happen in a crowded environment? I am sure you would have walked out of the store after the purchase with exasperation and the common complaint why cant the stores be more organized?Believe me, the next time you visit the store,the chaos would have just increased.
But why did the consumer begin acting that way when it's clearly not in his nature to do so? Simple. Because everyone else was doing it. So many others were doing it, in fact, and doing it so loudly, he/she will find it impossible to just sit there without acting.
Dr.Robert Cialdini,in his book Influence: The Psychology of Persuasion (Collins Business Essentials)
,calls it as the Rule of Social Proof ."Social Proof is what psychologists call a "decision heuristic" — a shortcut for making decisions. Life is too complicated to carefully evaluate every element of every situation, so we learn to take shortcuts to help us make what are usually reasonable and reliable decisions".The reason for the consumer behavior to purchase despite panic/chaos can be deduced as follows :
- Crowd and chaos creates panic
- Panic sets in ambiguity
- When we feel ambiguous, we look for people who are similar to us and take decisions based on their actions
- Greater the number of people who find an idea correct,more the idea will be correct
When overwhelmed by the panic & chaos, consumer ends up thinking that the offer in hand is a dream deal and it cannot wait for the next day. The 'Suspension of Disbelief" results in a purchase without thinking, contrary to our conventional wisdom.
How can this technique of influence "Social Proof" be exploited by online marketers? While there are welter of ideas like limited period offer,testimonials, products sold for the dayetc, it's worth exploring an online shop where there marketer builds crowd and chaos by giving the consumer the option to user Nag,Tag (go social) and haggle at the online store to help make a purchase. Going social (integrating the online shop with Facebook, Blippy)at the time purchase will create enough noise for chaos to set in and then we know the consequence.The consumer ends up purchasing from the online store.My guess is that this kind of selling will be better suited for low cost, discount stores especially when the consumer is not sure of his purchase. Atleast worth exploring...
This influence technique appears to be a negative but in reality thats how consumers behave.Smart marketer will be on the lookout for this kind opportunity.
Beware... don't enter a crowded shop...
