How Community Signals Help us in Decision Making?
This weekend if you are planning to go for a movie, probably the first thing you would check before booking your tickets are“movie reviews” given by early audiences, movie experts and critics.
Right from hotel booking to food options, YouTube video views to medium blogs, book purchase to car rentals, we all look for community signals to help us to make informed decisions.
Knowingly or unknowingly, we are dependent on community signal to build the credibility about the product we want to use or services; we wish to avail.
Today most of the businesses are directly or indirectly built around community signals and actively using it to grow their business.
With more and more businesses moving online, it seems like community signals are going to stay forever.
What is Community Signal?
“Community Signal is a piece of information, we get through various ineteraction, and based on those hints we establish our pre-experience understanding about any product, services or activities.”
In simple term, we call it “Feedbacks”.
Today we look forward to such Community Signals all around, and most of our decisions are based on Community Signals.
Community Signals can be both Positive and Negative. Both the signals have their relevance, and we need both to make informed decisions.
How the Human Mind reacts to Community Signals?
If you start thinking about every possible option when making a decision, it would probably take a lot of time to make even the most straightforward choice.
Because of the amount of information in the environment, it is necessitous to rely on some mental shortcuts that help you to act quickly. We call them Heuristics.
Heuristics are nothing but mental shortcuts, that often play a significant role to ease out our decision-making process. Heuristics can be surprisingly accurate but can also lead to errors in thinking.
Peer pressures, individual motivations, emotions, and mind’s limited ability to process information can also contribute to these biases.
Why Do We Use Heuristics?
Cognitive Laziness: It reduces mental effort to make decisions. Heuristics are fast and usually correct.
Power of Community Signals
· Nearly 95% of shoppers read online reviews before making a purchase
· 93% of local consumers use reviews to determine if a local business is good or bad
· Displaying reviews can increase conversion rates by 270%
· Displaying reviews for higher-priced products can increase conversion rates by 380%
· Given two products with similar ratings, consumers are more likely to buy the product with more reviews
· Only 3% of buyers say that reviews never factor into their buying decisions
· 71% of B2B buyers look at reviews during the consideration stage
Common types of Community Signals?
Reviews, Ratings, Views, Likes/Dislikes, Claps, Comments, Share, Downloads, Testimonials, Subscribers etc.
Impact of Community Signals in Various Industries?
Today if you want to grow your business, you need to go online; because buyers are online.
Recent studies revealed that we now spend more than 24 hours every week online. As screen time has significantly increased over the last decade and we are living in an era of information overload, we look for quick signals to pick the relevant output without giving too much stress to our mind.
Eventually, our minds are wired in a way that we look for Community Signals to help ourselves to make a decision and in the absence of it, we happily believe “It’s not worth it”.
Worth in terms of timeshare, wallet share or mind share.
Here are some examples of our daily consumption of Community Signals:
Let’s take the media first.
We prioritise media content based on the number of views. Online media platforms are using these community signals to promote the content.
Assume, you are browsing some video on YouTube and out of many results, you will automatically pick the one with more views. And, the network effect will be kept building.
More Views, More Content, More Traffic, More Business.
In the above example of YouTube, other than views there are “likes” & “dislikes”. So, YouTube has further simplified the Community Signals for the end-users.
Similarly, online streaming platform Hotstar shows live viewer’s count to nudge our senses.
Now we will take another example of food delivery platform.
A few years ago, when we wanted to order food from outside, we had limited options like nearby restaurants which are tried and tested and happy to deliver at your doorstep with or without extra charges.
Today with platforms like Swiggy, Zomato and Foodpanda, you not only have multiple options to choose and convenience of doorstep delivery but also have the power to help other buyers.
We are more open to ordering from new restaurants and cloud kitchens based on reviews and ratings.
Also, it keeps pushing the seller to maintain quality.
Good Ratings, More Orders, More Sale, More Restaurants.
And with Community Signals and technology whole ecosystem has evolved where both buyers and sellers are getting benefited.
A platform like Goodread is providing Community Signals to book reading community, and the end impact is on book sales.
Other benefits of Community Signals
- Steering Purchase Decisions
- Help to build confidence for big-ticket purchases
- The new face of word of mouth publicity
- Help to improve the experience
- Help to spread knowledge & information
- Saving time
- Grow businesses
And keep counting…
Virality Effect
With a cheaper smartphone, functional internet connectivity and very high screen time presence, businesses are always keen to tap the Virality Effect.
Word of mouth publicity has been transformed into a Virality today.
Virality is the new elite in marketing and Community Signals play a significant role in this along with growing technology.
Assume a situation where you need to make a decision without any Community Signals.
It’s hard. Isn’t it?
So, next time, whenever you are watching any media content or ordering something from the online platform; check how you react, perceive and act on Community Signals.
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