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Social Media and the Psychology of Decision-Making

Just like death and taxes, another certainty is that decision-making is part of daily life in business. The big difference is not that people are making decisions, it’s how they are doing so based on the advent of social media, but let’s take a step back.

The History of Social Media
Social media as we know it came to life in the late 1990’s with the first social media site, Six Degrees named for the ‘six degrees of separation’ concept and allowed users to list contacts both on the site and externally. A few years later, social media literally exploded with the introduction of outlets like LinkedIn, MySpace and later Facebook and Twitter. However, social media is much older than that. As far back as ancient times, stories were passed from one person to another and you could argue that people have always used social methods to help the decision-making process, but the prevalence of social media today is quickly making it the main source of how people make decisions. Not only does emotion influence consumer purchases, it is surprisingly a factor in business decisions as well.

Social Media = Social Validation OR Validation for the Win
While online marketing is relatively new, to achieve success, you must be better than your competition, drive more customers to your site and build strong relationships with your audiences. This requires gaining traction and that means validating your brand. Social validation is a key element in the decision-making process and it makes sense. Being liked and appreciated is a basic human need, but social media has taken it beyond the personal to impact things on a business level. In order for your product or business to have success today, it needs a validation of worth and social media provides that.

Forbes defined social validation in 2015 as “the psychological phenomenon where one or more passive individuals follow or conform to the actions of others within a group.” If it sounds like peer pressure, it is. If somebody leaves a positive or negative review on a product or service, others will notice and they typically react accordingly. It’s purely a psychological game and again, everyone wants to feel liked. The key is for businesses to recognize this and do what they can to bolster their public image.

Where the Rubber Meets the Road
Everyone has an opinion but the difference is now they have a forum to voice it and in doing so, they can influence others. In today’s Internet Age, we are all connected to our digital screens, which make researching a product or service before we agree to jump onboard a necessity. In addition to visiting websites, watching videos and reading testimonials, 90 percent of consumers trust peer recommendations and consult what they perceive to be the “experts”, making everyone a critic.

That being the case, your brand should have a social media presence and your reputation must be at its best in this arena. It is essential to use social media to personify your brand and give it a voice that fits. So while your brand needs to have a distinct personality, make sure you leave trendiness for your personal social media pages. This means finding the platform that serves your brand best and delivering consistent messages across all you use.

The Bottom Line
Many still view jumping on the social media bandwagon as a leap of faith that can’t be measured, but consumer activity indicates otherwise. It turns out, what other people think actually does matter and by using social media thoughtfully and understanding how it impacts the decision-making process, you’re setting your organization up for success. Social media continues to be effective because it helps build relationships between people and businesses. The end result is a strong brand image and increased sales. A good reputation leads to positive communications about your brand and positive communications about your brand means a positive effect on your bottom line.

 

This article was previously written by Chris Martin and appeared in TEQ Magazine.