Five Types of Social Influence

If you’re a digital startup, building and highlighting your brand is the best way for new users to learn about you.  Engineering your product to generate social influence through social networks like Facebook, Twitter, Google+, Tumblr, YouTube, Pinterest and others can multiply the discovery of your product and its ability to sell.  Think of it as building the foundation for massively scalable word-of-mouth.  Here’s a break down on various forms of social proof, and how some savvy digital companies are starting to measure its impact.

1) Expert social proof – Approval from a credible expert, like a magazine or blogger, can have incredible digital influence.  Examples:

• Visitors referred by a fashion magazine or blogger to designer fashion rentals online received a 200% higher conversion rate than visitors driven by paid search.
• Mom-commerce daily offer site Plum District found that customers referred by influential digital moms shop at 2x the rate of customers from all other marketing channels.

2) Celebrity social proof – Up to 25% of U.S. TV commercials have used celebrities to great effect, but only a handful of web startups have to date.  Some results:

• In 1997, Priceline.com was one of the first web startups to use a celebrity endorser – William Shatner – not a travel expert, but seemingly obsessed with saving consumers money.  It has been a huge win; Priceline now has a $23 billion market cap, and the fee Shatner took in shares is estimated to be worth $600 million.
• ShoeDazzle launched with celebrity Kim Kardashian as chief stylist. Her involvement helped leapfrog the company to an estimated $25m in 2010 and $70 million in 2011 sales, plus a recent $40m financing. 
• Celebrity endorsement by Jessica Simpson and aesthetician Nerida Joy recently helped Beautymint attract 500,000 visitors in the first 24 hours of its launch.
• The most authentic (and cost-effective) celebrity social proof is unpaid. Celebrity use on Turntable.fm by Sir Mix-A-Lot and producer Diplo generated viral buzz, helping the company skyrocket to 140,000 users in just 4 weeks.

3) User social proof – Direct TV marketers are masters at sharing user success stories. Companies mastering this digitally include:

• More than 61 million people visit Yelp each month to read user reviews.  Reviews drive revenue. A recent HBS study showed that a 1-star increase in Yelp rating leads to 5-9% growth in sales.
• User-generated videos (UGVs) are a growing and important social proof phenomenon.  Early visitors to Shoedazzle watched more than 9 UGVs on average, helping catapult sales; and user testimonials on YouTube drove a 3x conversion rate vs. organic visitors for Beachbody, the makers of P90x fitness.
• Negative user social proof is also important to track. The first negative user review on eBay has been shown to reverse a seller’s weekly growth rate from 5% to -8%. It also hurts pricing; a 1% increase in negative feedback has been shown to lead to a 7.5% decrease in sale price realized.

4) Wisdom of the crowds social proof – Ray Kroc started using social proof in 1955 by hanging an “Over 1 Million Served” sign at the first McDonald’s.  Highlighting popularity or large numbers of users implies “a million people can’t be wrong.”  Some digital examples:

• Fashion e-tailer Modcloth enables its community to “Be the Buyer” by voting on which styles they think it should sell in the future.  Shoppers take strong cues from the community; styles with the “Be the Buyer” badge sell at 2x the velocity of un-badged styles.
• Ratings and Review genius software Shopper Approved allows customers to rate and review companies allowing 70x more ratings than their nearest competitor. That means more that there are crowds of happy customers telling new visitors that buying from a Shopper Approved website is a good idea.

5) Wisdom of your friends social proof – Learning from friends thru the social web is likely the killer app of social proof in terms of 1:1 impact, and the potential to grow virally.  Some examples:

• Friends inviting friends to play through Facebook and other social networks helped Zynga grow from 3 million to 41 million average daily users in just one year, from 2008 to 2009.
• Moms, arguably the most valuable demographic on the social web, rely heavily on friends and family recommendations.  A recent Babycenter study showed moms rely on the wisdom of their friends 67% more than average shoppers; and they rely on social media 243% more than the general population.
• Friends referred by friends make better customers.  They spend more (a 2x higher estimated lifetime value than customers from all other channels at One Kings Lane); convert better (75% higher conversion than renters from other marketing channels at Rent the Runway); and shop faster (they make their first purchase after joining twice as quickly than referrals from other channels at Trendyol)
• They also make better contributors.  People who see content from their friends on Trip Advisor contribute personal content to the site at 2x the rate of others, and are 20% more engaged than other users.

Now that you know the five types of social influences, choose which one(s) will work best for your product and industry.