How People Make Buying Decisions in the Social Economy

Over the weekend I went to visit my friend in Stuttgart, so while on the train I finally got to read Brian Solis’ latest book “What's the Future of Business?: Changing the Way Businesses Create Experiences” (abbreviated as WTF – cool, right?). Of course, I read it in one go and I felt inspired by it as I have with each and every his work. Before I share with you my impressions about the book though, I would like to show you today just one particular thing I found absolutely fascinating – an infographic explaining what drives shopping decisions.

In chapter 12 of WTF, Brian Solis argues that to design experiences and trigger emotions brands have to have an understanding of social sciences and the psychology of engagement in order to make sense of the attitude and behaviour of their target audiences.

To help us develop that understanding of “the A.R.T. of Engagement (actions, reactions, and transactions)” Brian Solis presents a rather interesting infographic by TabJuice that was inspired by Robert Cialdini’s work about the Six Principles of Influence and visualises six common brain triggers that influence consumer’s shopping decisions.

Following I’ve listed these six universal heuristics of social shopping that you can also check out for more details in the infographic at the end of the post.

#1 Social Proof:

81% of customers reach out to family and friends on social networking sites for advice before purchasing products.

#2 Authority:

77% of online shoppers use reviews to make purchase decisions. This only supports one of the findings of this year’s Edelman Trust Barometer – people place the most trust in credible and knowledgeable experts and less so in corporate figures.

#3 Scarcity:

77% of people like getting exclusive offers that they can redeem via Facebook. We assign greater value to products that are less available due to fear of potential loss.

#4 Like:

50% of shoppers have made a purchase based on the recommendation of the people they follow and like on social networks. We follow those we like and do the things they do because this helps us build social bonds and trust. Here, Solis mentions an old saying “People do business with people they like”, emphasising how this statements “is never truer than in social media.”

#5 Consistency:

62% of online shoppers are loyal to a brand due to online satisfaction. When we are uncertain, we tend to reach out to something we already know and trust, i.e. commitments we’ve already made.

#6 Reciprocity:

Over 25,000,000,000 pieces of content are shared on Facebook every month. We have an innate desire to repay favours in order to maintain social fairness, whether those favours are invited or not.

Why are these principles important?

Because to develop an ability to influence consumers brands have to first understand how they “tick”. In the social economy, where social media has inspired the so called connected consumerism, the customer journey from learning about a product to actually purchasing it, has become a lot more complicated. Why? Well, because social media has significantly affected the process of how we make decisions.

People have been talking about brands, with or without them listening or participating. That has been the case for many, many years, not just due to the emergence of social media. We are social creatures so we have been expressing our opinions, satisfactions or dissatisfactions with products and companies to our friends, relatives or the people we meet for a very long time. Social media has just heightened that – it has given us more channels to share, talk and communicate anytime, anywhere and at the very moment a thought comes to our minds. Everything is a lot more dynamic and interrelated now. For example, we now trust the reviews of absolute strangers and base our choices on such; it’s not just what our family or friends think that matter.

We make emotional decisions, often hard to explain, but they are the ones that mark our dynamic customer journeys. Therefore, consumer behaviour is now strongly influenced by our online and offline experiences with products, brands, friends, and the people we “meet” along the way. Which is why Solis says that to create cohesive and connected online experiences for customers businesses must understand how consumers make decisions and what influences those at each and every moment of truth (will talk more about these in a future post), meaning that brands have to listen, engage and deliver value to customers before, during and post transaction. Only so will they be able to earn reciprocity, goodwill and social capital, and that is priceless in today’s social economy.