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Why Recommendations From Consumers Should Hold More Clout For Brands

Article - New York, 01 January 2014

Other people's opinions really matter. While brands spend millions of dollars — often hundreds of millions of dollars — on brand campaigns, recommendations from consumers actually hold more clout. This can be a major conundrum for marketers striving to thrive in a cluttered marketplace where they no longer control the message they attempt to impart to fickle consumers.

FCB's Institute of Decision Making, established in 2010 to help us better understand how consumers make decisions, continues to reveal interesting and important trends. Our research shows that in the United States, 4 of the Top 5 sources prospective shoppers use to make purchase decisions relate to recommendations. That used to be the case in India, but the number has climbed even higher. Whether from friends, family members or experts, 5 out of 5 sources used by consumers in India relate to advocacy or the reviews of others.

While this global shift in influence isn't new, it is gathering in intensity. Consumers still feel brand advertising is valuable and in India this increased by 3% over the last two years. But over the same period, the "opinions of others" grew an average of more than 10%.

The takeaway for marketers is that brand advertising is still important but they need to redouble social media efforts to amplify the good chatter and minimise the impact of the bad.

Interestingly, recommendations don't only sway consumers before they make a purchase. In the US, 82% consumers say they pay attention to or seek out information about a brand after they have bought it. In India and Russia, the figure is 90%. Brazilians, at 92%, are most likely to seek post-purchase confirmation.

Rationally, this makes little sense. Why invest further attention in a decision that you have already made? From a neuroscience perspective, there is evidence that information that supports a choice you have made leads to an expression of dopamine — the feel-good neurotransmitter associated with the consumption of, among other things, chocolate and addictive drugs. Essentially, anything that makes consumers feel good about a choice — whether the choice involves the purchase of a new car or reinforces the selection of a toothpaste we have used every day for the last 30 years — makes us feel good about our decisions and especially about ourselves.

From a word-of-mouth perspective, this is good news for marketers. Baba Shiv, one of the world's leading marketing scientists and a professor of marketing at Stanford Graduate Business School, says that two things happen when consumers feel good about their purchase decisions. "First they derive more utility from the product," says Shiv. "Second, their excitement makes their decision contagious."

Sharing a good decision might have its roots in evolutionary psychology. It likely benefitted both the individual (in terms of social standing) and the community (in terms of others in the community making better decisions), thus making the desire to share the decision instinctive.