Monday, December 20, 2010

Herd Behavior

It's essential for marketers to understand how and why an idea or belief spreads. It's not enough to simply match up the sales figures with correlating marketing expenditures in order to judge the effectiveness of a campaign.

Particularly important to understanding the spread of ideas is the concept herd behavior and the influence peer groups can have in forming brand perceptions. Not surprisingly, consumers often make brand perceptions without any direct interaction with a brand. They judge the actions of others.

Picture going to try a new restaurant and it's completely empty. Would you stay or find another place to eat? Human nature says most consumers would bail because we seek the approval of others in making such a decision. And a restaurant with no diners doesn't say "we approve."

Understanding this is a issue that many live event marketers tend to struggle with. In their case, communal consumption is a major part of the product itself. So obviously, its critical for these marketers to an understand the effect this will have on the brand. In fact, I wrote a little about this over a year ago when I posted ideas to fix our local hockey team, the Rochester Americans. For a team struggling with attendance, a prolonged perception that no attends their games may be worse than the fact that no one is going.

On the other hand, this can work to the advantage of successful marketers. For decades, consumers were greeted with four powerful words under the signature golden arches of sign outside McDonald's: billions and billions served.

By keeping a running tally of the customers they have served, McDonald's is reinforcing the trust and confidence the public has in the brand. It doesn't tell the customer what they should think, rather it reinforces what they learned on their own.

Furthermore, premium brands work by going the other direction. They're scarce and expensive on purpose; to create a barrier of ownership. Therefore, the people who can afford the item or service will relate to and identify with the others who also can afford it.

However, manipulating herd behavior is a tricky practice. I'm guessing most have experienced going to a bar or nightclub that kept people waiting outside even though the inside looked very different. How did you react? Not pleased I bet.

Remember, gimmicks and playing games like at the nightclub won't work in the long run. What will is building a brand your customer is proud to identify themselves with.

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