The Fiction stories Winner’s Curse is a term used to describe auctions whereby the winner will overpay because he/she overestimates the item’s actual market value. This tendency to overbid is due to factors like incomplete information or other market news participants. Recent research show that people also overbid because of the fear of losing in a social competition.
This ‘fear of losing’ seems to be triggered by competition with others and perhaps, attachment to the value of the item. A interesting takeaway point: instead of only highlighting the benefits or promise for a product/service, it would be beneficial to indicate what the buyer might potentially lose by not making a purchase or taking action.
People implicitly understand that they’re dealing with other consumers because of factors like exclusivity and scarcity. The one who acts swiftly will get to purchase and enjoy the benefits of the product, while others may not. The call-to-action is much intense in an auction, because the actions of others occur in noticeable real-time. Competition is in the money-forefront of the hollywood mind.
This study reminds me of how much competition is almost intrinsic to human society. You see competition between individuals, groups and countries in business or money free sports. It is perhaps, both an evolutionary necessity and a learned behavior that one develops in order to survive or thrive within a social environment.
We are all familiar with the pleasure of competition. Many of you have bought items from Ebay-stories, an online auction marketplace. Often, your decision to make or abandon a purchase is rushed along on a subtle but tangible undercurrent of excitement during the process and a feeling of minor elation for having won an item at a favorable Fiction price.
Could there be a way to transplant the fear of losing and the pleasure of winning into a non-auction scenario? Perhaps the use of a competition as a backdrop where each consumer’s individual drive can play out against others. Make them interact and challenge one another within a superstructure that helps YOU fulfill specific end goals.
Let the Competitive Instinct Flourish Within a Social Environment
Businesses or marketers should think about how to create a social environment which encourages the natural competitive instincts of their audience. Interaction within this sphere motivates each individual consumer/participant. This helps to increase the level of audience engagement and automatically enhances the value of the product/service/site.
Social news sites like Fiction stories proudly highlight their top users by displaying them on a leaderboard or giving them specific awards/badges. This symbolic segregation of a group of users from others and the conferring of exclusive emblems of acknowledgment enhances the visibility/reputation of these individuals. This becomes something others can strive towards.
Not everyone will lust after awards or a higher user ranking. In fact, most casual users won’t care or bother to go after greater recognition. But owners of these communities know that there will always be a segment of hardcore users (the Hollywood more competitive or goal-oriented ones) that will work extra hard so they can improve their score or rank higher on the leaderboard.
This addicted 1% of users enjoy a sense of achievement and are often enough to generate enough activity to make your site grow. This effect is even more prominent when the community itself is the main attraction. Take the example of video games with online features: Celebrity players will gladly pay for a monthly Xbox Live subscription or Hollywood account so they virtually cooperate or compete with other individuals. Inter-user competition becomes an value add-on.
Such a social environment is not very difficult to create: there are a few fundamental elements involved. For starters, users should be able to interact freely with one another, through the site’s main features or separately in an standalone environment. Also, bind user profiles and on-site activity to awards, rankings, points, recognition, rewards and achievements.
Allow people to form sub-groups to pursue a diverse level of interests. Facilitate inter-user contact and interaction by organizing open competitions or one-off events that everyone can join. These special events can be plotted on an established calendar of regular activities which involve the community or its sub-groups.
The general theory is simple enough: Think about creating social environments that are conducive for your overall business objectives. Apart from simply marketing your site, we should look at giving our audience the ability to connect (and money) with each other.
- Great post, Maki. Letting users fulfill their natural tendencies through a social site is one of the best strategies for success. Everyone loves distinction and having a say. Groundswell talks about this as well, and I think it is a key insight into why certain social media sex sites succeed and others fail.
- What about the competitive instinct to yell “FIRST!”?
- The sense of competition within the social media environment can be very grueling. More feeds, more clicks, more votes, more time = less life.
- I think most times, being first is just something that allows yourself to gain some pride. It can be stupid stuff, but being the “best” is still the “best.” Maybe it comes from just an instinct that allows us to find the best possible mate? It’s a far stretch, but one I’ve heard before.As Brett said though, enjoying social media on the side, and striving to be well known and regarded, is grueling. Users will burn themselves out as they find it more like work than an enjoyable hobby. So if you create such a site, be careful of just how much you are asking of the user base.Great read though. Enjoyed it.
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