The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What in marketing can be associated with social proof.
Why does the bandwagon effect matter in business?
The bandwagon effect, often referred to as the herd mentality, is the propensity for someone to do something because a lot of other people are already doing it. The singular person often acts subconsciously. That is, they will act even if the values and opinions of the herd contradict their own.
The bandwagon effect is a powerful driver of human behavior and has therefore infiltrated most aspects of daily life.
In the business and marketing spheres, studies have shown that the effect influences not only a consumer’s willingness to buy but also how much they are willing to pay.
Furthermore, consumers are more likely to make a purchasing decision if they can see that others have made successful purchases before them.
Breaking down the bandwagon effect
The bandwagon effect describes the often subconscious tendency for an individual to act based on the actions of the many.
The bandwagon effect is a simple yet powerful marketing tool that no business should ignore because, to some extent, the consumers are doing the work of marketing the product for the business.
The bandwagon effect is most effective for businesses with a history of positive customer reviews. A lack of reviews is negatively correlated with successful marketing campaigns.
Understanding the bandwagon effect
The bandwagon effect is one aspect of consumer behavior that brands and businesses can exploit. The simplest way is for a business to show their product and service in action.
Traditionally, celebrities and other high-profile figures would feature prominently in advertisements. More recently, this technique has become the basis for influencer marketing.
Influencers with large, targeted followings are ideal for the bandwagon effect, for obvious reasons.
But businesses themselves can also jump on the proverbial bandwagon and adjust their product offerings accordingly. Often these trends are driven by popular consumer sentiment relating to technology or perceived status.
Many television manufacturers, for example, are now offering 4K resolution screens – even though most broadcasters do not support 4K resolution.
But since consumers are behind this demand for 4K products, it would be unprofitable for manufacturers to not use the bandwagon effect to their advantage.
Customer testimonials, reviews, and case studies are also crucial to any marketing campaign. A recent study by BrightLocal found that positive reviews make 91% of consumers more likely to buy from a business.
Furthermore, 84% equate positive reviews with recommendations from a friend and a further 53% will not purchase from a business with an average rating under 4 stars.
Amazon, Yelp, and TripAdvisor are all examples of the power of customer reviews in building large and successful businesses.
Drawbacks from the bandwagon effect
The greatest strengths of the bandwagon effect also have the potential to be its greatest weaknesses.
Consumers who act in the interests of the crowd are often not acting in their own interests.
This poor decision making may also extend to businesses themselves, who choose to invest in manufacturing goods or services based on trends and not on the core values of their organization.
Businesses may also find that as they (and their competitors) flock to popular markets, profit margins will be smaller.
Smaller businesses who do not possess long-standing customer reviews might also find that the bandwagon effect is detrimental to their marketing efforts.
Several analyses into landing page conversion rates found that pages with low or no social media share count resulted in a lower conversion rate overall.
In the absence of obvious social proof, businesses must direct consumers to other actions that increase the odds of buying so that this proof can be built organically over time.
Bandwagon effect examples
The bandwagon effect is perhaps more influential and pervasive than many of us realize. With that said, here are a few examples of its presence in life and business.
Consumer behavior
When consumers purchase the same items of clothing as others, they do so because they want to exhibit that they are aware of the latest fashion trends.
This behavior is also known as bandwagon consumption and many brands take advantage of it in their marketing and advertising campaigns.
The bandwagon effect can also be seen in supermarkets. Shoppers sometimes base their purchase decisions on how much of a particular item has been depleted on the shelf.
Items that are nearly out of stock are considered the most popular, so consumers tend to choose those over similar products.
Medicine
Some medical procedures whose effectiveness has been disproven continue to be practiced today because of the bandwagon effect.
These practices are called “medical bandwagons” by Layton F. Rikkers, Professor Emeritus of Surgery at the University of Wisconsin-Madison, who described them as “the overwhelming acceptance of unproved but popular [medical] ideas.”
One recent example of a medical bandwagon is the tonsillectomy, or removal of the tonsils.
While the procedure is beneficial in a small number of specific cases, there is no scientific evidence that supports its universal, one-size-fits-all use.
In other words, doctors perform tonsillectomies because they are widely used and not because of their effectiveness or versatility as a procedure.
Investing
The bandwagon effect is also prevalent in the era of meme stock investing. This was exemplified in the short squeeze of GameStop (GME) stock in early 2021 where investors on Reddit were whipped into a frenzy and started purchasing shares in the company.
As short sellers were forced to close their positions, GameStop’s share price increased substantially, resulting in even more investors to deviate from their rational investment strategies and purchase stock.
When buying interest in the company started to decline, the bandwagon effect was over almost as quickly as it had begun.
Politics
In 2017, researchers in Germany conducted an experiment to determine the relationship (if any) between the bandwagon effect and political elections.
Specifically, the research team wanted to know if candidates or parties considered more popular among voters were more likely to win government.
The study handed news content to 765 participants about a fictitious local election in a German town and also information about the history of the candidates. The participants were then divided into three groups.
The first group received a poll showing a candidate losing the election in a landslide, while the second showed a candidate winning the election by a landslide. The third group was not shown any polling information.
Results confirmed the bandwagon effect, with polling information (or perceived popularity) correlated with whether participants believed a candidate could win the election.
Members of the third group without access to polling information used the candidate’s history instead to form an opinion.
Social media participation
In 2012, researchers analyzed the impact of the bandwagon effect on consumers’ use of the social platform Facebook in Singapore.
Based on prior research into the social mechanisms behind interactive tech, the study predicted that whether or not someone used Facebook was linked to their perception of how widely it had been diffused in society or that person’s offline contacts.
Statistical analyses found evidence for this link which was found to occur between Facebook usage and its diffusion across communal, local, and global communities.
More specifically, the study concluded that an individual tends to jump on the social media bandwagon once it has been set in motion in the population and among their social circles.
Additional results
In addition to the above conclusion, the researchers also used surveys to ask participants to name the social media websites they used most often and which were also used by friends.
What’s more, while participants were more likely to use Facebook if their friends within Singapore did so, they were less likely to use it if the bandwagon effect was present in other countries.
This result, it was surmised, was driven by the fact that Facebook is a way to connect with people one knows in real life.
That is, individuals from the same country. It was also predicted that the bandwagon effect was more sensitive to the social and behavioral communication and values unique to a specific country.
Hotel towel use
In 2014, the U.S. Environment Protection Agency introduced a campaign to reduce water consumption in hotels.
The campaign, known as H2Otel, aimed to help hotel businesses:
Identify water use and water-saving initiatives.
Alter products and services to reflect best management practices, and
Track any progress made and celebrate achievements.
More than 860 hotels took part to learn how to reduce water use while also minimizing their operational costs and meeting the needs of today’s sustainably-minded consumers. But where does the bandwagon effect come into play?
One problem a hotel business faces is the washing of towels that have only been used once.
In the past, hotels would leave placards in bathrooms mentioning the environmental benefits of reusing towels.
But while environmentalism is a strong motivator for consumers, a placard that tells guests how many other people have re-used towels is the most effective.
One study on this very subject was featured in a 2008 issue of the Journal of Consumer Research.
In the study, behavioral scientists created two different placards. The first asked hotel guests to save the environment and show respect for nature by reusing their towels.
The second placard read,
“Join your fellow guests in helping to save the environment. Almost 75% of guests who are asked to participate in our new resource savings program do help by using their towels more than once.You can join your fellow guests in this program to help save the environment by reusing your towels during your stay.”
Over an 80-day period, data was collected on whether guests re-used their towels. Around 44% of those shown the social norm placard re-used them compared to just 35% of those shown the environmental message.
This is a classic example of the bandwagon effect in action and has many positive implications for the environment. It also enables the hotel business to reduce its water, electricity, and even labor expenditure.
Convergent thinking occurs when the solution to a problem can be found by applying established rules and logical reasoning. Whereas divergent thinking is an unstructured problem-solving method where participants are encouraged to develop many innovative ideas or solutions to a given problem. Where convergent thinking might work for larger, mature organizations where divergent thinking is more suited for startups and innovative companies.
Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. It is about thinking non-linearly, and understanding the second-order consequences of actions and input into the system.
Vertical thinking, on the other hand, is a problem-solving approach that favors a selective, analytical, structured, and sequential mindset. The focus of vertical thinking is to arrive at a reasoned, defined solution.
Maslow’s Hammer, otherwise known as the law of the instrument or the Einstellung effect, is a cognitive bias causing an over-reliance on a familiar tool. This can be expressed as the tendency to overuse a known tool (perhaps a hammer) to solve issues that might require a different tool. This problem is persistent in the business world where perhaps known tools or frameworks might be used in the wrong context (like business plans used as planning tools instead of only investors’ pitches).
The Peter Principle was first described by Canadian sociologist Lawrence J. Peter in his 1969 book The Peter Principle. The Peter Principle states that people are continually promoted within an organization until they reach their level of incompetence.
The straw man fallacy describes an argument that misrepresents an opponent’s stance to make rebuttal more convenient. The straw man fallacy is a type of informal logical fallacy, defined as a flaw in the structure of an argument that renders it invalid.
The Streisand Effect is a paradoxical phenomenon where the act of suppressing information to reduce visibility causes it to become more visible. In 2003, Streisand attempted to suppress aerial photographs of her Californian home by suing photographer Kenneth Adelman for an invasion of privacy. Adelman, who Streisand assumed was paparazzi, was instead taking photographs to document and study coastal erosion. In her quest for more privacy, Streisand’s efforts had the opposite effect.
As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.
The recognition heuristic is a psychological model of judgment and decision making. It is part of a suite of simple and economical heuristics proposed by psychologists Daniel Goldstein and Gerd Gigerenzer. The recognition heuristic argues that inferences are made about an object based on whether it is recognized or not.
The representativeness heuristic was first described by psychologists Daniel Kahneman and Amos Tversky. The representativeness heuristic judges the probability of an event according to the degree to which that event resembles a broader class. When queried, most will choose the first option because the description of John matches the stereotype we may hold for an archaeologist.
The take-the-best heuristic is a decision-making shortcut that helps an individual choose between several alternatives. The take-the-best (TTB) heuristic decides between two or more alternatives based on a single good attribute, otherwise known as a cue. In the process, less desirable attributes are ignored.
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.
The bundling bias is a cognitive bias in e-commerce where a consumer tends not to use all of the products bought as a group, or bundle. Bundling occurs when individual products or services are sold together as a bundle. Common examples are tickets and experiences. The bundling bias dictates that consumers are less likely to use each item in the bundle. This means that the value of the bundle and indeed the value of each item in the bundle is decreased.
The Barnum Effect is a cognitive bias where individuals believe that generic information – which applies to most people – is specifically tailored for themselves.
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.
The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.
The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.
The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What in marketing can be associated with social proof.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
