The rise of social proof

“When quality was hard to predict, it made sense to stick with a familiar brand. But when you can quickly assess the quality of things, loyalty doesn’t help consumers as much.”

Itamar Simonson – Stanford Marketing Professor

In our world of the perfect information age, social proof is becoming a key influencing factor in consumers’ buying decisions. The global popularity of smartphones and 4G networks is enabling and empowering consumers to assess anything and everything at any time with only their fingertips.

In this hyper-connected world, any of us can obtain instant reviews and social proof of a product before making our purchase decision. This shift is phenomenally powerful.

Which do you believe more – the brand positioning messages of a company, or the comments of experts and reviews written by your personal friends?

Now, enterprises have nowhere to hide. The only way forward is to master the absolute value of their products or services.

To convey messages which focus on this value, instead of focusing on traditional brand relevance or brand preference, some companies have started to shift their prime marketing focus to messages of social proof.

Does this really work? As one of the MIT Technology Review’s ‘50 Smartest Companies 2015’, Tesla focuses mainly on word of mouth and social proof for their sales. Its CEO, Elon Musk, instead of spending millions on marketing, believes in making great products instead. Advertising Age sums it up: “Tesla Motors has no advertising, no ad agency, no CMO, no dealer network. And that’s no problem.”

Then there is Xiaomi, the second-smartest company on MIT’s list. The smartphone maker and app developer has also achieved huge success through the power of social proof despite a tiny marketing budget.

Xiaomi is quickly evolving and maturing beyond its original ‘cut price’ image through innovative techniques like flash sales announced on mobile messaging platforms. Xiaomi’s explosive growth shows that an online and social proof-based sales model can work wonders for companies that are bold enough to embrace it.

I’ll leave you with a thought: a large portion of marketing companies’ revenue still comes from brand marketing. Given that brand messaging appears to be on the decline, perhaps it’s time for forward-thinking companies to start thinking about making a change.

Or perhaps you don’t believe that icebergs can melt…?

The writer is Victor Leung, executive director of Pico Beijing

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