How to use herding to grow your SaaS

Humans are social animals, we're programmed to trust the herd. This knowledge can help you improve your conversion rate. Here's how If you have even been to Manhattan you know how the herding bias look like. The first time I started suspecting something weird was going on when in 2013 I found myself in New York City for the first time. The summer was in full bloom, and there were plenty of tourists — and I as one of them. As someone who’s been building an Asian grocery stores chain I was passionate about the topic of food and visiting the well-known Hell’s Kitchen district was on my to-do list. When I go there I was deeply disturbed by the following picture: some restaurants remain empty while others were crowded and more that that — there were lines outside of people waiting for their turn to dine. I figured some of the restaurants were good while others not so much. I got curious and asked one person at the end of one exceptionally long line: “Excuse me, sir. Is this a famous restaurant or something?” I was shocked to hear: — No idea, I'm in Manhattan for the first time. But I figured if there’s a line it should be a good place. Have you noticed that too: when empty places remain empty, the most visited ones attract more customers. Goods on Amazon with the MOST reviews are bought more often. Profiles with more followers get new followers faster…Well, this one also because social media algorithms work this way but their work is based on the same principle that impacts our decisions — a herding instinct. We believe that “the herd” knows something we don’t and follow the opinion of the majority. When empty places remain empty, the most visited ones attract more customers. Goods on Amazon with the most reviews are bought more often. Profiles with more followers get new followers faster The good side of herding Humans are social animals. And as such, we trust the herd when it comes down to being protected. This is what helped us to survive throughout millions of years of evolution. When we feel uncertain, we want to get in the middle of the herd because it’s the safest place possible (those animals who used to be left behind or stay on the outside edges of the herd were usually eaten faster). Being “carried away” by the “collective mind of the herd” calms us down, removes the sense of anxiety, and prevents us from being afraid of the future. If in our ancestors herding bias used to kick off at the sight of danger or when they found themselves in unfamiliar circumstances, for us it’s very much about choosing the restaurant when we are not sure which one is better, or buying cat’s food when we don’t have an affinity with a certain brand. The principle, though, remains the same: when we are not so sure — we trust the herd. It helps us feel safer about our decision. The downside of herding But this is also exactly why propaganda works. Why people get brainwashed and start thinking “maybe I’m just missing something, the majority of people can’t lie”. In fact, it’s not necessarily about the majority. It’s about people believing that there’s a majority (and this impression can be easily created if the media is controlled by the government). What does it have to do with marketing and how can you use it to drive sales? As you might have guessed from my restaurant example, herding has a direct impact on sales. As long as customers believe your service or tool is chosen by many other representatives of the herd (that is, people like them), you will be on top of their purchasing list. When they don’t believe someone else who is like them uses your tool or a service, they will have concerns about using their credit card. Real-life examples of herding: how this works for big companies Herding is the reason for what Julian Shapiro calls “labeling” strategy: you just label as many things with your brand as you can, creating an impression that you’re everywhere. This tactic has been adopted recently by Mercury bank. Being a bank for startups Mercury focused their efforts on structuring the deals for VCs. They are offering founders an access to the database of 300+ investors whom they can send their pitch decks to. Every pitch contains a Mercury bank label. This way, the word of mouth spreads around. VC by default presumes that almost all founders use Mercury. Herding is also the reason for what Peep Laja calls a “mental availability”. It’s a strategy when a brand creates a strong connection between itself and a job-to-be-done. For example: Design that you can handle to a developer easily ⇒ Figma Manage and track tasks within the project ⇒ Trello Why do we name these brands? Because they are chosen by the herd (or at least, that’s what they want us to believe by trying to be everywhere and being mentioned by as many representatives of the herd as possible). When this impression is made, it’s easy: purchasing decisions are made inside the consideration set and customers tend to always choose a leader, the one with the highest level of mental availability. It’s a bullet-proof strategy. With only one downside: it’s crazy expensive. It demands millions to bring your brand to every channel. Real-life examples of herding: how can you use herding in your bootstrapped SaaS It doesn’t mean that you can’t use herding to your advantage to drive sales, though. Let’s see how other bootstrapped SaaS use UX elements on their landing pages that trigger herding bias in the website visitors and make them consider this company as a service provider closer than competitors. Hypefury — a tool that helps with growing and monetizing Twitter audience — uses sales popups. Those can be used as a great tool to trigger herding within users. In Hypefury’s case, pop ups don’t show how many subscriptions have been bought. The first one, which opens up after 2 seconds on the website, shows how many other visitors are there with you. It is a little prompt that tells a visitor: “Look’ it’s a popular site, other people have been finding something useful here, check it out”. The second one informs a visitor that someone else has just bought a Standard plan, then that someone has bought a Premium plan. It creates an impression that users are buying stuff here very actively — just like the line in front of the restaurant (it might very well be a real-life notification about real purchases, I have no way of knowing it but it doesn’t really matter if those are real purchases or not). The important thing is that pops are very specific: they don’t say “someone just bought this or that”. They specify the location. It intensifies herding instinct — especially, if the location turns out to be the same as the website visitor is in right now. It creates a specially strong bond. It tells “this tool is appreciated by people just like you”. Meaning, by your immediate herd. Hypefury’s competitor, FeedHive uses a different type of social proof that triggers herding: They inform a website visitor that the tool is considered to be the best by all the “herd”. In practice, it means that all the users that agreed to review it, rated it at 5. But no matter what the truth is, our hidden brain screams: “Grab it NOW, it’s trusted by all the herd”. They also list several recognizable web2 and web3 industry players. What if a website visitor doesn’t associate themselves with these industries? No big deal, their brain will not register these names at all. But if someone who knows what Alchemy or Thirdweb is, ends up on FeedHive’s landing those names will be a potent herding trigger that will make the service more appealing in their eyes. How is herding different from social proof? These two seem to be the same, right? Not entirely. Social proof is a result of the herding instinct. When you list testimonials from real people, it triggers herding which results in the social proof. But, social proof can also be triggered by other things: like, a celebrity endorsement. Or a recommendation of an expert. When herding kicks off only when we have an impression that this is what our herd (people like us) chooses. How can you use herding on your landing? There are numerous ways you can do it: through sales pops (like Hypefury), through listing your most prominent customers, through showcasing your reviews rating, through testimonials, and just via copywriting. Rules of thumb: Be specific in describing the herd (not just developers but developers who are located in Mumbai, or devs who work with Angular) Make an impression you are chosen by all of the herd or at least, the majority Use numbers instead of the words “many”, “most”, “dozens”, etc. The more stressed your customer is — the more impact herding will have on the purchasing decision. Stress can be a result of: a very pressing problem uncertainty a sensitive nature of the product Meaning, a customer who buys a vibrator on Amazon will rely on reviews more than a customer buying an apron. A student who buys a JavaScript online course to get their first job will rely more on reviews than a designer who buys this course because they are curious about things and love learning. A mom looking for a service that allows to find a babysitter fast would be more impacted by the opinion of others than the same mom looking for Christmas presents in October. Share this content wherever you like 👇

How to use herding to grow your SaaS

Humans are social animals, we're programmed to trust the herd. This knowledge can help you improve your conversion rate. Here's how If...