Recently, we witnessed a classic example of herd behavior so I thought it timely to base this blog post on the subject.  I’m talking, of course, about the recent sell-off on the stock market.  If you are an average person, you watched your investments fall sharper than a dude trying to ice skate drunk with an inner ear infection.  But…if you can predict herd behaviour then you were one of the lucky bastards in the centre of the herd.  You sold your shares before the fall and then bought them back a week later for 30% less.  Or maybe you just panicked…in which case you’re just an asshole (do I sound bitter?).

Now, there could be lots of really good reasons for folks to move in groups but the recent sell-of fondled with the very origin of herd behavior: “selfishness”.  Hey, don’t shoot he messenger.  This theory was originally developed and described by evolutionary biologist W. D. Hamilton.  Hamilton opined that each individual group member reduces the danger to itself by moving as close as possible to the center of the fleeing group.  Thus the herd appears as a group moving in unison, but its function materializes from the clumsy behavior of self-serving individual members.  This is precisely what happens when the stock market booms or crashes…or when Macy’s has a sale and I can’t get that really cool hoodie cause everyone else liked it too!  Today, technology has made it incredibly easy for herds to form.  Here are some tips on how to leverage herd behavior to your advantage:

1. Online Focus Groups

I’ve yet to encounter a focus group that could not be somehow influenced to make the decision the marketer or the client wanted them to make.  It could be a subtle smile or inflection when presenting a particular product.  It could simply come down to the arrangement of the presentation or how dirty a table is.  The problem with focus groups is that they work against the core law of physics:  the very act of observation changes that which is being observed.  Focus groups want to please.  Getting raw and honest opinions requires the exact opposite.  Want real raw opinions?  Start a focus group page on Facebook or Google+ and offer incentives for feedback.  Use the anonymity that has made the web such a powerful shopping tool and consumer reports mechanism to your advantage.  Beware, though.  Online focus groups are fraught with people whose opinions, quite frankly, are worthless and meaningless.  You need to be able to separate the wheat from the chaff and prescreen candidates if possible or you could go broke rewarding members for crappy advice.

2. Ratings and Reviews

If you own a travel destination company or a hotel, or sell high-ticket consumer goods you know the value and importance of ratings and reviews.  A recent survey indicated that 80%+ of consumers base their purchase decision not on what marketers tell them but what complete strangers have to say about the product or service they are interested in.  I would argue respectfully that most people do start with a brand bias; and that this is the foundation of brand development.  Having said this, a bad review on your brand’s product is still bad news.  It may not be the kiss of death but it’s a very bad kiss nonetheless.  If you are promoting a product or service online you NEED to have a ratings and review system in place.  It’s about authenticity.  It’s about consumers feeling they are getting unbiased advice from people who have no vested interest in the company selling the product.

3. Testimonials

Testimonials are dead!  Now, before you post me telling me how you disagree with this comment please note that I did not say testimonials are not valuable or important.  They are.  It’s just that testimonials are so…well…2001!  They died with the one-way broadcast communication style and command-and-control marketing model.  Nobody cares if you post a comment from a so-called customer named “Mary” who loves your company so much she bakes your entire company muffins every two weeks.  You show me the crappiest company in the world and I will show you five or six of their customers who think they’re the best thing since sliced bread.  Any company could track these people down and get a comment from them and post it on their website.  Worse still, you’d be disturbed at how many companies invent testimonials and the people allegedly giving them.  If you are insistent on using testimonials put away your Motorola flip phone and turn down your radar detector and try this:  add the full name and contact number for the happy client.  Invite visitors to contact them and get first hand feedback about your company and services.  Show visitors you are willing to put your money where your mouth is.  Barring this, forget the testimonials and revert to item 2. above.

4. Mechanical Turk

I’m not saying I’m a proponent of Amazon’s Mechanical Turk but I know companies who have used it and had great success.  Mechanical Turk harnesses the power of crowdsourcing to perform minor tasks for minor fees – typically Amazon credits.  Say, for instance, you are running a contest and you want it to appear like you have lots of entries…this product would be good for you to generate some buzz.  Or say you wanted a product reviewed…you get the idea.  And you can probably see how this could be used the wrong way too.  The sad fact of marketing is that there are always people and companies willing to break the rules to get an edge.  I only recommend Mechanical Turk to clients who use it organically – that is: to get unbiased feedback and generate buzz around a campaign or promotion.  If you intend to use it for “black-hat” purposes then shame on you.

5. The Wisdom of Crowds

The Wisdom of Crowds is an insightful and fascinating book by James Surowiecki. Buy it.  Read it…then read it again in a year.  Every manager and marketer will derive value from this book, in my opinion.  James, man, you owe me 5 points on each book from here on out.  I’m kidding, of course.  I receive absolutely nothing in return (material or otherwise) for promoting his extraordinary, exceptional, amazing, astonishing, astounding, marvelous, wonderful, sensational, stunning, incredible, unbelievable, phenomenal, outstanding, momentous; out of the ordinary, unusual, uncommon, unique, surprising; informal, fantastic, terrific, tremendous, stupendous, awesome, incredible, mesmerizing and visionary book…seriously!