Make use of consumers' natural herding instinct
A view from Mark Ringer

Make use of consumers' natural herding instinct

For years, marketing has rested on the classical economics principle of rational choice; that each person operating in the market is doing so with a galvanising dose of rationality; where every decision is reached after careful deliberation. But this largely takes for granted the idea that each human is an individual, autonomous decision-making unit, that the nature of the mind provides us with not only the tools, but also the ability to use them, in every decision we make.

In dissent, disciplines including psychology, anthropology and sociology have put forth an alternative theory: bounded rationality, which has quickly gained popularity, not least among politicians. It hangs on the idea that, in decision-making, rationality is limited by the information individuals have, the cognitive limitations of their minds and the finite amount of time they have to make a decision. In his seminal book Herd, Mark Earls talks of our "lazy minds", providing an alternative to the "finely honed data-processing devices" suggested by rational choice theory.

Once we strip away the idea that individuals have the capacity to be rational all the time, behavioural economics steps in to assess the contributing biases that influence the irrational. There are many; as a social animal, one of our first instincts, when denied the time or information to make decisions for ourselves, is to copy the behaviour of those around us.

Naturally, this revelation has met with consternation from marketers. Behavioural economics has long shared an interest with brands, but many in the industry have refused to acknowledge it, for fear of being proved either so good at it that we wield too much undemocratic power over individuals (the moral panic over data privacy being an obvious example), or shown up for knowing nothing about our own profession.

This must stop. If humans are herding creatures, they will instinctively act on the choices of their peers, presenting a huge opportunity for brands to increase desirability to the highest level possible and nudge consumers into picking their product over another. This is related, but not limited, to the idea of conspicuous consumption, an exploitation of the snobbish and puerile instinct within all of us to demonstrate our wealth.

A brilliant example of this understanding is showcased through the skincare brand, Environ. It employs no advertising or "spokesmodels", but has gained popularity through sheer endorsement. It is, by its own admission, fuelling a culture of "I’ll have what she’s having". To help encourage the herd, Environ has created a brand shrouded in secrecy, restraint and one-upmanship: the products are ranked by levels one to five dispensed by trained facialists according to the grade of users’ commitment to the cause; a measure by which its users rank themselves ("I’ve reached level 4").

While an undeniably elegant way of putting a brand at the centre of a herd, Environ’s strategy demonstrates only conspicuous consumption, which is but a small part of the power this herding behaviour wields in a shopping context. Equally valuable is the insight that when a shopper reaches the shelf, they are more likely to make a confident choice if they know it has previously been made by other people.

Take Boots’ work with its Protect & Perfect serum, launched in 2007 to meandering queues and madding crowds and still generating hype seven years later with its Advanced version, released in May. In rational terms, the excitement surrounding the first product was a reaction to its scientific seal of approval: "Clinically proven". However, the herd gathered not when the product was launched – rather, when it was reported to have sold out. People relied on the notion that if other people had bought the product with such gusto, then it must be worth not only their money, but also a considerable amount of their time.

Indeed, for those looking to point the finger of blame for market booms and crashes, crazes and virals: herding is a very reasonable culprit. Many companies may have far to go in using behavioural economics to understand and nudge their audiences’ hands toward their product, but to create desirability and advocacy, they can very effectively turn this behaviour into real, sustainable and profitable results.