By Kate YoungIf all your friends jumped off a bridge, would you do it too? Don’t roll your eyes. It turns out that your mother was asking an excellent question. Because regardless of your personal inclination toward bridge-jumping, humans are pre-disposed to pay close attention to the behavior of their social groups—to either imitate it or avoid it. Most of us aren’t even aware of the pull that our peers have on our choices. And that has enormous implications for marketers.
Wharton professor and best-selling author Jonah Berger has dedicated years of academic research to dissecting how this dynamic works. His books, Contagious and Invisible Influence, provide a compelling analysis on the social forces that cause people to share certain information with one another and make decisions that affect their own lives.
So when Berger shared his knowledge with students at the ABA Stonier Graduate School of Banking, we developed a powerful sense of FOMO, for ourselves and the rest of the industry. Below is ABA Bank Marketing’s conversation with Berger.
ABA: One of the hottest topics we’re hearing about in bank marketing right now is the use of data to create personalized messaging. Would you say that social influence is more effective at driving consumer behavior than data-driven, individualized marketing? Could you explain how these two approaches might work together?
Berger: These aren’t mutually exclusive. Personalized messaging helps, but people also tend to follow others. Imagine two different personalized messages. One—tailored towards people interested in checking accounts—that says that Bank X has the most popular checking account in the industry. Another—tailored towards people interested in banking through an app—that says that Bank X has the most popular app in the industry. Both would be better than a more general message, but each is more effective because it points out how many other people like something.
ABA: The financial services industry has tried to combat poor money management habits by publicizing the alarming news that large proportions of the American public have unmanageable debt, insufficient savings for emergencies, and/or no retirement plan. In light of your research, is this approach actually making things worse?
Berger: Definitely. This effort is reminiscent of what the music industry did with piracy over a decade ago. “Seventy-five percent of people pirate music online—so don’t do it.” If you hear that lots of people are doing something, you think it would be stupid not to. Same here. Saying lots of people have debt makes people feel like it’s more okay that they do. Don’t emphasize “lots of people” are doing something if you want people to do the opposite.
ABA: Social media has created an environment in which “going viral” is considered the ultimate success. Is that a reasonable expectation for bank marketing content?
Berger: The goal isn’t to make something viral. It’s to “make each one reach one.” How can we turn existing customers into advocates and get them to bring us new customers? How can we turn them into a marketing channel for our message and get them to spread the word?
ABA: Your book Contagious outlines six principles that prompt people to share information: social currency, triggers, emotion, public visibility, practical value and stories. Are there any elements of this STEPPS formula that should not be attempted by the financial services industry—e.g., the “public visibility” element?
Berger: After consulting for dozens of banks and financial services firms, I can say that all the STEPPS can work in this context. It’s just about figuring out how to make them work for you.
ABA: Bank marketers widely recognize the need to connect with consumers’ emotions, but they often complain that it’s difficult to get buy-in on certain types of campaigns that might elicit emotions (such as humor, surprise, excitement) that might undermine the gravitas of banking. Is it possible to connect emotionally (and in a way that prompts action) with messages that focus on safety, stability, and trust?
Berger: Inspiration is a great emotion here. It’s a high arousal one but [it]also suggests gravitas. Inspire people how far they can go with what you have to offer.
ABA: Your research has turned up some interesting findings in terms of familiarity leading to “liking” something. As banks consider the future of the branch, what warnings do you have for them? Is advertising enough to breed familiarity?
Berger: [I] have helped a number of banks think about this issue and it’s an interesting question. What are branches for? In the past they’ve been used for depositing checks and talking to representatives, but now most customers can do that online or over the phone. So many banks are eliminating branches. But it’s not clear that is the right way to go. Because branches can serve lots of other functions. Across industries companies are reinventing retail, and banking should be no exception. Branches can provide brand experience, deepen emotional connection, and like ads, remind people that the bank exists. They can serve lots of other functions as well. So smart companies are figuring out how best to use these assets
ABA: In a similar vein, bank marketers are perennially looking for ways to differentiate their institutions in a commoditized industry. What advice do you have for them in terms of balancing familiarity with distinction?
Berger: To many consumers, banks are like gas stations. There’s little, if any differentiation. As a result, they pick based on rates. Which is clearly a race to the bottom. Differentiation is the way out. Be known for something. Figure out a way to stand out and differentiate yourself. Rather than being okay at everything be the best at something. If you’re not, your customers will find someone who is.