I’ve spent the past few days reading some new books I got from Amazon. They are all about social psychology/psychology and economics. Most of you don’t know this, but economics is my true kick ass drug in life. The latest book I read on the topic is about irrational decisions, or moreover, decisions that we make based on norms.

So how is this in any way related to what we do in social media and the search engines? Well it has everything to do with what we do. When it all boils down to the core of what we’re trying to achieve, we have to deal with people. If we want to make money in the process we also have to engage in some kind of economic decision making process with our users, fans, searchers or followers.

Rational vs. Irrational

In Sweden, where I’m from, the trade of being a rational individual is seen as a good characteristic in a person. This differs between cultures and the interpretation of rationality varies over time. In economic terms, rationality occurs when you make decisions based on the face value of each situation without engaging emotion, historical context etc. Basically you can describe it as if I give you 1 dollar, then you don’t ask me why I want to give it to you, you just accept. In a social context we all know that a dollar doesn’t come without some kind of reciprocal behavior in the future. Ie. If someone gives you a dollar, you might expect that they would like a similar value out of you in the future. If you are curious you might ask.

In a rational environment however, if not stated otherwise, you accept what is proposed at face value. Ie. if the person doesn’t say you have to pay them back at a later stage, then you don’t. To do so, would not be rational behavior as you would actually spend money that you didn’t have to spend.

Not as selfish as “they” want us to think

Another assumption in economics has also been that we are self indulging individuals. We make decisions out of our own self interest all the time.

The books I am reading right now takes these assumptions to the next level. They present evidence that there are loads of situations in life where we don’t make decisions out of self interest. They also say that irrational decisions sometimes become the rational path to follow.

The Social Media & SEO game

So how is this in any way related to Social Media and SEO? Well basically you need to think of your social media strategy, as well as your modern seo strategy as a set of games. You need to set the strategy that makes your game the most profitable for you. Social media is indeed about people and if you don’t recognize the shortcomings/strengths of social psychology whilst setting your strategy, then you will most definitively end up in the wrong place.

I am not saying you’ll have to hire a bunch of economists. What I am really saying is that you should go with your gut rather than trying to go with something that is far away from yourself. Then set up strategies for what you will do if your initial strategy don’t work out. Ie. you should plan for the worst and hope for the best. No one knows what works at each instance. We know some things are better than other but in order to run your shop efficiently you cannot stop questioning EVERY aspect of what you’re doing.

Always do the following:

• Cannot stress the importance of being honest to yourself (most people lie to themselves to protect the validity of their choices. You know if you made a good decision, admit it and do something about it rather than sweep the shit under the carpet.)
• Ask yourself what your assumptions are (I mean, “yeah, they are going to press the blue button and then fill in their name and e-mail”, what if they fill in their friends e-mail and this becomes the user generated purpose of your campaign)
• Prepare a first action for each instance one of your assumptions would turn out to be wrong

If you don’t like what you’re selling, why you think anyone else would buy

Use existing knowledge about social interaction between people. Social psychology combined with economics can really help you. Help your users make irrational decisions by presenting your offer – their game – in a way that makes them value a certain outcome greater than another.

If you know that your game doesn’t work, ie. if you are doubting if you would choose that path of the game, then it is probably not a very good strategy. In order to make the desired strategy the best one, then you need to change the game.

Example:

You have two offers on sale. One of them give you a higher margin then the other. You cannot change the prices for either of them as this is decided by someone else. Your boss is pressuring you to deliver. If you’re presenting these two choices on a website you can use social parameters such as recommendations, user reviews to highlight the offer that gives you the best margin.

User reviews help us choose irrationally when we are faced with having to make a decision. If 104 people have thought a good is really good and this is highly visible, then it is more likely that people would buy that option in front of the other product you are putting on display.

Man… I’ll need to continue this post later as I am really tired and I feel I am making no sense. Please question me in my comments field so I’ll get back on track. Motivate me!!

//Jesper

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On Saturday (28th of November) I held a talk at Searchmeet in Stockholm arranged by Per, Simon and Johan. They had done an excellent job finding speakers that would compliment each other in a good way and make this the best conference I have been attending for a really long time. No one seemed to be there to sell or overcome each other in the “I know the best” category. Simply excellent execution from start to finish.

Speakers during the day was Gary Beal from Vanguard SEO who held a presentation on the 12 SEO trends of 2009. Bo Tidelius had a interactive session on how one would market Ahlgrens bilar. Just before that Johan from Dinwebb, one of the organizers talked a bit about what they do. Post that group activity I took the stage and gave a session on the Value Ladder. More on that later. Then Cristoph C. Cemper from cemper.com took over and dished out a link building beating worthy it’s name. All speakers nicely molded into each other and there was a clear sense that this day was not like other days aiming to be this day. It was extremely nice, and I’ll leave you with that.

Irrational Conversion

My talk wasn’t very much about irrational conversion principles at all. First of all, it is a very complex topic to cover in a 20 minute session, and secondly it is probably only two people in an SEO crowd that get a hard on by listening to me getting side tracked by all ideas I get when talking on the topic. Instead I decided to recommend an excellent book on the topic – The Psychology of Economic Decisions by Isabelle Brocas and Juan D. Carillo. For this purpose you’ll only need to read the first chapter in Volume I. But for those of you interested in the intersecting space between psychology and economic theory, I suggest you read the rest these two have written as well.

Keep in mind that this is a highly disputed area of science and even though the research that supports these theories is highly accepted, there are still a lot of exceptions where these rules do not apply. Well…. they are in fact no rules at all, but they give you some insight into how the human brain works and how we make decisions about our money alone or in groups. Many times we find ourselves deciding over our own money in the wierdest and most irrational kind of way. We pay more for the same just to get it now. We get insecure and vulnerable. We feel threatened and pacified. However, our worst enemy when working with being rational in our economic decision making is our perceived well being. Anyhow, read the book. You’ll like it.

Presentation on the Value Ladder

Instead of digging any deeper into the actual theory base of the topic of the day, I started talking about how one can split conversion into several steps and that the user enters your site with a specific frame of mind that you need to take into account if you want to convert him or her. This ladder was first introduced to me by this guy Henrik from Litium, but I have since then elaborated on it quite a lot and built it into a model for customer value and investment in time/money.

The video will be added (I’ll tweet when I add it) as soon as I get it. That way I do not have to transcript this whole session which would be a bit of a mess anyhow since I really don’t remember what I said. I might come out looking like a retard, but from what I could tell by the tweeted feedback, people seemed to get some entertainment at least .

I enjoyed the railing discussions I had with the people at the conference. Please visit Searchmeet.se to find more info about who was there. I guess you know how to use google.com/translate right

Thank you all that was there today for a fantastic day! Connect to me on LinkedIn if you’d like a place to stay in touch easily.

//Jesper – who hasn’t had this many outbound links ever..