lecture 5 and class notes: social influences Flashcards
social influences
How do friends, family, celebrities influence your decisions and judgments
social influences on movie ticket sales
There was initial revenue on the first day and that was a function of the marketing of the firm like advertising on tv, trailers and features of the attributes of the movie
Then sales decrease/ increase over time depending on the quality of the film
The change in movie sales is gradual
Movie sales today: the oepnibg weekend sales can still be driven by marketing and attributes
But the subqeuent pattern of sales is mich steeper→ if its a bad movie, then sales will really decrease because word gets out easily
Social influence is much more powerful now bc of social media
two types of sources of influence
1) Marketing source
Ads, trailers
Have more control over the message , know what will be in the ad
Delivered through mass media (has greater reach, can reach many people)
2) No two way communication
Non marketing source
From people, reviews
Looking at this and this is social influence
They differ in credibility (beleivable ) and control
Non marketing sources are more credible
Less control bc firms cant dictate what others say
Delivered personally → facilitates interactions, two way cmmuncations
Smaller reach
cialdinis six norms
fairness, consistency, social proof, authority, scarcity, liking
fairness norm aka door in the face
social norm that if i do something for you, you should do something for me. If you do a favour for someone, they feel obligated to return back the favour
charities will use this–> send you gifts then ask you to donate
salesmen use this–> they lower the price of a car and then the buyer will buy it cause they realized they lower the price
consistency norm aka foot in the door
you have taken several steps towards the product
car salesmen use this–> offer you a great price and then make you sign documents then say. will go and double check to make sure the price is okay. then they come back and say I have to higher he price–> consumers dont walk away bc they already signed the documents
used for ATM
waiters use this–> will ask how is everything
saying a SMALL yes will lead to a likely BIGGER yes
Doritos used this–> got the customers to design chips
also be used to influence hevauour
remind them of past behaviour
social proof aka salting the tip jar
following others behaviour
put money in the tip jar so others follow
if you someone taking the stares vs escalator, may take it
sometimes we justify bad behaviour with social proof
authority
People tend to follow experts
Ex: following medical experts
Doctors would advertise cigarettes
Sport experts also
Political experts → making political issues like following lawyers
scarcity
People think scarcity= valuable
Ex: time limited offers, scarcity of time
Ex: scarcity of quantity. Only 40 items per store
People think why is a product scarce and the logical reason is that many other consumers are demanding the product and why bc its agood product
Signals quality
Could have time scarcity with quantity scarcity
liking
People tend to follow those who are likeable
how to become more liked by others
Personalize your message → getting a letter from a company and its signed by someone and addressed to you. 2. Show that you are similar. Ex: political ad shows different ethnicities with different endorsers. Have different endorsers representing each ethnicity. Sales people will use similarity , will mirror the clients but dont overdo it
fairness and scarcity
ex with wikepedia
Ex: millions of people read wikipedia but only 1% if our readers give → part of a few that donate so scarce but since you read wikepia you should give back
Anchoring also involved in donating to wikipedia→ give an anchor of how much to give
fairness and review
Getting customers to post reviews after predict use
Getting customers to post positive reviews
Getting customers to post explanations of their review ratings
Ensuring potential customers see positive reviews of users
Ensuring potential customers see firms credible responses to negative reviews
Ex: amazon made a sale to a customer, they want the customer to now post a review, now how to get customers to post postive review
small donations and consistency
Consistency effect: small donations now lead to larger donations later and vote later
Especially effective strategy if population is large and candidate is unknown
Plus availability: ask for donations after rally (or video or speech)–> can visualize
consistency, reminder of past behaviour
Reminder of past behavior→ fundraising letter, the first challenge is tog et the customer to open to envolope
Consistency and social proof nd availability
ex with lanterns
Event with lanterns and raising money
Consistency for those taking part: taking a step towards the org
Social proof: everyone together
Availability: audio visual
Aimed towards those giving now vs the future
how can scarcity be seen
by time and quantity
Scaraicty (time)
People think scarce= value
Ex: on amazon will show a show is leaving the app in a few days
Scarcity (quanitity )
Ex: igloo fest, shows that tickets will almost be sold out
Also includes social proof
Might also show its sold out → this can create confirmation bias bc we think its sold out we think its gonna be fun
Scarcity of time and quantity
Scarce few being selected for a limited time offer
People think scarcity = valuable
Lack of scarcity makes things seem more valuable
Locals wont go to tourist attractions
social proofs can be seen as
heuristics
The effect of social norms on bevaiour depends on… stronger/ weaker
- low vs high effort
- low vs high persuasion knowledge (knowledge of perusuain techniques in general and knowledge that is obviously being used)
- habitual vs non habitual behaviour (habit is thoughtless behaviour established through repetition and reinforcement )
- high vs low importance of social norms
wisdom of crowds
Extension of social proof
If everyone is tkaing the elevator you will proabably take the elevator
Wisdom of crowds= collective opinion of a group of people offers more wisdom than the opinion of any one person in the group
Ex: when crowds are wise vs not wise → parlow game , put out jar of candies, whoeevr makes the most accurate guess of how many cnadies there are will get the money, experiments like this→ if you have a large enough numb r of people guessing, average the guesses and you will get an accurate number
wisdom of crowds depends on
Expertise → want experts to give the guesses
Want to examine the economic growth rate, ask economics
Group size
Want a good sample size like 1000-2000
Diversity → if you put people of different backgrounds otgether, you will get estimates made up of larger factors/estimates from all the different perspectives coming together
Ex: if you want opinions of economic growth, use different formulas to analyze
Independence
Guesisng number of jelly beans, you would just follow other peoples opinions
wisdom of crowds consume reviews
Average rating
Could focus on this
Represents the net wisdom of the crowd
Consumers rely more on average rating when
Sample size is high
Variance is low
Average is high or low
Raters are similar to the self (subjective)
Raters are experts (objective )
Cna see if you are similar to the reviewers
Look deeply into specific reviewers
firms objective of getting reviews
) Getting customers to post reviews after product/service use
(B) Getting customers to post positive reviews (& privately share complaints)
(C) Getting customers to post explanations of their review ratings
(D) Ensuring potential customers see positive reviews of users
(E) Ensuring potential customers see firm’s credible responses to negative reviews
authority is reinforced by
teachers
parents
supervisors
People Follow Authority in Business Contexts To Do Bad Things
firms will:
Going along with supervisor doing
something illegal
* Falsifying financial data / pollution data if
asked to do so by your bosses
scarcity and social proof
buying tickets, we see that there are barely any tickets left and that means that others are buying them so we follow
local attractions and scarcity
People often overlook local attractions or experiences that are readily available because they may not feel the same sense of urgency or excitement as they would for experiences that are scarce (e.g., limited-time events, rare exhibitions).
personalize (liking)
write peoples names on letters
The Effect of Social Norms on Behavior
Depends On.
low effort
low persuasion knowledge
habits
high importance of social sources
loyalty programs
consistency reciprocity and avaialbiltuh
when do consumers rely on average ratings
- Sample Size is High
Explanation: When the sample size of ratings is large, consumers tend to view the average rating as more reliable. A high sample size suggests that the rating is based on a diverse range of opinions, which can help mitigate individual biases or outliers. For example, a movie with thousands of reviews will typically be perceived as having a more trustworthy average rating than one with just a few. - Variance is Low
Explanation: Low variance in ratings indicates that most consumers have similar opinions about a product or service. - Average is High or Low
Explanation: The context of the average rating also matters. If the average rating is particularly high (e.g., 4.8 out of 5), consumers may feel more inclined to trust the quality of the product. - Raters are Similar to the Self
Explanation: When raters share similar characteristics (e.g., demographics, preferences, tastes) to the consumer, the consumer is more likely to place value on their opinions. - Raters are Experts
Explanation: If the ratings come from recognized experts or authoritative sources, consumers are likely to give more weight to those average ratings
