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What is social proof and why does it work?

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Last editedNov 20213 min read

Social proof is proof that something has already worked for one or more people, thus implying that it can work for somebody else in that situation. Social proof is highly valued by businesses as it can strongly influence purchasing decisions. Here is a quick guide to what you need to know about it.

Every time you are faced with a new situation, you need to figure out how to respond to it. One way to do this is to tap into the knowledge of people who have already dealt with this situation.

If the issue is very serious and/or important, you might look for help from an acknowledged expert in the area. If it is less serious, you might simply look to see what has already worked for other people. Sometimes you might want double reassurance and seek both expert advice and general opinions.

If there are different suggestions, you will need to decide which one is most applicable to you – typically the one made by people you believe are most like you.

The value of social proof is based on its quality and its quantity. The quality of social proof is measured by its credibility and its relevance. For example, subject matter experts of all kinds tend to have very high credibility. This means that a recommendation from a respected expert can be all it takes to convince someone.

At the same time, however, credibility only has value if it’s matched by relevance. You could have absolute trust in a person’s advice on a given question. If, however, that wasn’t the question you wanted to be answered, their advice is really worthless.

By contrast, someone without acknowledged subject matter expertise may not have much, if any, credibility on their own. If, however, you keep hearing the same opinion from multiple different people, then their combined credibility may be enough to convince you. Again, however, this will only be of value if their advice is relevant.

Social proof is hugely valuable in business. It is particularly valuable in ecommerce because customers cannot try before they buy. For the purposes of ecommerce, social proof can essentially be divided into two main forms. These are authority-based social proof and authenticity-based social proof.

Authority-based social proof is based on a person or organization’s credibility. Examples of authority-based social proof include:

Expert endorsements
Certifications
Celebrity endorsements
Influencer endorsements

The challenge is that the authority figure usually receives some kind of benefit for providing it. Experts and certification agencies will, at a minimum, be paid for their time. Authority websites, staffed with experts, may also use affiliate links and hence receive a commission on sales of a product or service.

Celebrities and influences will, at a minimum, expect to receive the product for free. They may well receive a direct payment for their endorsement. It’s also quite common for them to receive a commission on sales as well.

This can lead to the authenticity of their endorsements being questioned. There are three steps you can take to avoid this.

Choose your authority figure with great care. Make sure they are a good fit for your brand and your product/service. Try to avoid experts with a lot of endorsements, which can reduce their credibility.
Make sure that any payment is fully declared (this is often a legal requirement).
Make sure that the authority figure is very clear about why they are recommending your specific product or service. The more relevant detail they can give, the more credible they will be.

Authenticity-based social proof is based on the real experiences of real people. It typically means either user reviews, or informal recommendations such as word of mouth testimonials or comments on social media and forums.

Because this form of social proof is typically provided without payment it is especially credible. However the lack of direct payment can make it more difficult to persuade people to make the time to give reviews and make comments.

One way to address this is to offer non-financial incentives for them. For example, you could offer to make a donation to charity for every review a customer leaves. This creates an obvious perceived benefit without compromising the independence of the reviews.

We Can Help

If you’d like to learn more about social proof and how it works, then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments.