What does social proof mean for your online business

09th Dec. 2015

As on-line shopping and on-line travel bookings grow, consumers are increasingly looking for ways to verify their purchases or seek additional information before committing to a purchase. This is done by reading and posting reviews and comments online – either directly on the businesses’ web-site or on social networking sites. Known as ‘social proof’ or ‘wisdom of the crowd’, is based on an assumption that other consumers have more insight about products and services and consumers base their consumption patterns on this insight.

Many on-line businesses are now allowing people to post customer reviews on their web-sites and this is one type of social proof. Although customer reviews can provide consumers with additional information, it can also be unreliable, depending how it is managed. This is the same for online business, where social proof can have both positive and negative impacts.

Positive social proof can be a powerful marketing tool for an online business and is thus well worth harnessing. Word of mouth spreads quickly and can greatly impact shopping patterns. However, it is important for online businesses to manage this social proof. For instance, vet comments before allowing them to be posted and/or impose accountability on reviews, for instance having customers register before being able to post (i.e. not to be able to post anonymously) or only allow actual customers to post reviews.

Not managing social proof properly can have harmful effects on an online business. For instance, allowing anonymous posts calls not only into question the veracity of the comments but also can attract negative or malicious comments – comments that someone may not post, if they had to use their own name, for instance. Negative social proof, especially if allowed to spread on social media sites, can have an adverse impact on an online business. Because of this, online businesses need to create clear guidelines for posting customer reviews.