People like approval, and in the context of online shopping, approval comes in lots of different flavors. For a familiar example, think of Amazon. One way Amazon encourages approval-seeking after purchases is with recommendations and social icons that encourage buyers to share what they bought on Facebook or Twitter.
But there are some unfamiliar and very subtle kinds of “approval” that demonstrate social proof and trigger purchases in much simpler ways. Sometimes, merely seeing evidence of strangers’ purchasing behavior is enough to boost sales significantly.
For example, when the daily deal site Troop Swap added a “counter” to their website that was only visible to half of their visitors, they discovered something remarkable. The counter had a significant impact on sales. People who saw the counter, which had the basic appearance of an odometer and showed the number of times the deal had been bought, made twice as many purchases and bought 50% more per order than the people who had seen the website without it.
Proven ways to boost online sales by displaying social proof
The magic of the counter is in the triggering effect that seeing other people’s purchasing behavior has on a prospective consumer’s own spending.
The designer of Troop Swap’s experiment, data scientist and PhD economist Katya Vasilaky, spoke with us in October and explained that the purchases reflected in the counter make the deal more attractive. In other words, the purchasers influence one another to buy at a higher rate than they would have otherwise by giving the deal social proof.
Besides counters, there are other ways websites visualize purchasing behavior. For example:
- Social feeds. Fab.com has incorporated a real-time feed onto their sales site that aggregates and displays purchases and general product excitement
evidenced by likes, tweets, and shares of Fab.com merchandise on Facebook and Twitter. This display of social proof is clearly effective for Fab.com—CEO Jason Goldberg reported that 25% of Fab.com’s Black Friday and Cyber Monday sales were traceable to social media.
- Customer reviews. When someone is at the crossroads of a purchasing decision, they like to know whether the choice they’re considering is a good one. Because of this, online customer reviews have become incredibly important for consumers. In fact, 70% of Americans check online reviews before making a purchasing decision. The effect of positive reviews on business is staggering (i.e., for restaurants, an additional Yelp star can mean a 5% to 9% increase in revenue), so cultivating the reviews and displaying them in multiple places can have a big impact on sales by endorsing the offering.
Customer Activity. Online retailer Modcloth has a Pinterest-style gallery that allows customers to display their purchases. It also has visuals from its “be the buyer” program, indicating the items that have been chosen by people in the ModCloth community (rather than professional buyers). The highly interactive visual approach is working—COO Kerry Cooper says there are a percentage of customers who visit the site 10+ times a day, and the be-the-buyer program had 17 million votes as of November 2012.
The industries and the methods of displaying social proof vary, but the message is clear – people like to see evidence that they’re doing the right thing when they’re contemplating a purchase, whether it’s totally passive, like with a counter, or extremely interactive, as with an on-site gallery.
Ways to manage the cost of displaying social proof
There are a few downsides to displaying purchasing behaviors and customer activities, but there are ways to manage those costs too. For example:
- Exposing sales information to competitors. By displaying the number of sales to prospective customers with a counter, a site is also displaying the number of sales to everyone else . . . including competitors who could copy or otherwise profit from the purchasing information. To manage the risk of contributing to competitive intelligence with their counters, Groupon deliberately lowered their counts to deflate the number of sales by up to 20% for any given deal. Other businesses should consider the benefits of the sales boost against the cost of the information falling into the wrong hands.
- Not every method works on all sales models. Counters work particularly well to enhance sales in the daily deal model, when the time period in which goods are available is condensed, and there are limited quantities. It probably wouldn’t have the same effect for unique items, or luxury items where exclusivity is a part of the product value. A Pinterest-style gallery like the one ModCloth offers would probably only confuse purchasers of, say, medical supplies or construction materials. To evaluate whether a gallery-like approach would work on your website, think about your main customer base and what kinds of social media they use most when deciding what kind of social proof will work best to boost purchasing.
- Some times, what’s displayed sends a negative signal, or doesn’t do anything. It won’t do any good to show negative evidence about your offering. Curating and displaying poor restaurant reviews is obviously a bad idea. In the context of counters, some research indicates that the positive effects follow an inflection point after a certain number of purchases have been made so there could be a negative signal when a counter shows only a few purchases (or none at all). To manage this risk, a site using a counter could have the appearance of the counter triggered only after a threshold number of purchases have been made.
The bottom line is that showing prospective customers evidence that their purchase would be a good, quality decision is very powerful. Whether it’s with counters, reviews, feeds of social activity, or evidence of an engaged customer base, displaying positive social proof gives potential customers the information they need to make the purchase.