The decoy effect has proven itself in sales processes time and time again, which makes it an important marketing instrument. The classic decoy effect model introduces a "decoy" product that has asymmetrically dominating attributes to manipulate customers into choosing between two products. What is the effect and how exactly does decoy effect marketing work?
The bandwagon effectis a cognitive distortion that impacts people’s behaviour during decision-making: when choosing an option those made by others are more frequently selected. This effect was first described in 1944 by psephologists – scientists who study elections. However, the bandwagon effect also applies to sales psychology and is an important part of marketing and sales strategies.
How does the bandwagon effect work?
The bandwagon effect wasn’t discovered in market research or marketing, but as part of psephology – the analysis of elections and polls – in the U.S. When they examined their research data, the three psephologists, P.F. Lazarsfeld, B. Berelson and H. Gaudet discovered that during elections, people tended to align their behaviour with an alleged majority if the predicted winner wasknown. This type of advanced information about the winner can, for example, originate from election polls that are published a short time ahead of voting.
The effect describes that people are more inclined to follow the example of others without taking their own views into consideration. This occurs just as often in market research as it does when making political choices. The bandwagon effect causes the already popular option to receive more approval.
The bandwagon represents the winning side or successful party. “To climb onto the bandwagon” describes the process of someone aligning themselves with a promising cause, or in other words, becoming a follower.
The name “bandwagon effect” stems from this trope. The action theory in the field of psychology provides a good explanation of the bandwagon effect: A perceived success, such as the possession of an enticing product that elevates one’s status and increases the willingness of other consumers to perform the same action that has been recognised as successful. As part of the “bandwagon”, they will buy the product that – to their knowledge – others are purchasing.
The contradictory reasons for making the purchase are quite fascinating. While “leaders” purchase products to stand out from everyone else, “followers” buy products to belong to a specific group. The effect works because people are motivated by a general desire to be correct. If a person decides on the popular option, the probability appears higher that they have made the right decision.
Thanks to rapid developments within social media, the bandwagon effect’s concept of leader and follower has attained even greater importance for marketing purposes. Across social media platforms, the concept of “following” is already being successfully applied and explains the success of influencer marketing.
In practice: Examples of the bandwagon effect
Cognitive distortions like the bandwagon effect have an impact on people on an almost daily basis: whether it’s shopping, voting, or their behaviour on vacation. However, we rarely realise that we are under the influence of a cognitive distortion because cognitive processes involve countless decisions that are made unconsciously. The bandwagon effect largely describes the concept of “imitative consumption”. Imitative consumption can be observed when the demand for a specific product increases because those who are demanding it associate themselves with other consumers who have already bought the product.
The book and music industries employ the bandwagon effect by including sales figures to further increase the sales of bestsellers. For example, the placement of stickers or imprints on products that emphasise their popularity will influence consumers to reach for the book or CD that has already been bought by many people.
For advertising companies, the bandwagon effect is beneficial and it often plays a key role in marketing strategy and planning.
What roles does the bandwagon effect have in marketing?
Since the bandwagon effect is relevant in marketing, it should be taken into account while developing a brand and during ongoing campaigns. Product, service and website ratings assume major roles in online marketing and when correctly implemented, the bandwagon effect reduces the bounce rate and increases conversion rates.
The bandwagon effect operates on the fact that people frequently orient their behaviour around success and status. Aspiring toward status and climbing a hierarchy are ancient evolutionary drives that we still follow today. Therefore, most consumers compare themselves to the consumption level of another group. The “other group” can be within one’s social class or one that is higher up in the hierarchy.
What are the positive side effects of the bandwagon effect in marketing? The greatest significance of this “preference policy” can ensure that the price of a product loses importance as a selling point. Marketing communications can use the bandwagon effect to aim for a higher price that primarily appeals to consumers’ status considerations to boost demand and sales. Other cognitive distortions such as the endownment effect and loss aversion can be used as reinforcement. For example, they can appeal to consumers by focusing on factors such as pride of ownership (e.g. through a test drive) and potential loss prevention (e.g. loss of prestige by not purchasing a certain product or service).
Yet, the bandwagon effect does not produce only positive effects for companies. Business-to-business buyers and marketers are also prone to it by following the market leader or relying on the supposedly most successful supplier when purchasing goods. But when they are aware of the bandwagon effect, they can specifically question or examine their decisions while taking market analyses into account. In this way, innovative and lucrative market niches can be detected more rapidly instead of running blindly after bandwagons.
If you want to use other cognitive distortions in marketing, there are diverse effects through which consumers can unconsciously be brought to make purchasing decisions: the IKEA effect, anchoring effect, confirmation bias, survivorship bias, the decoy effect, the halo effect, hindsight bias or selection bias.