The Secrets of Consumer Choice: Behavioral Economics and Social Media Marketing

5 min

The Secrets of Consumer Choice: Behavioral Economics and Social Media Marketing

This is a long one, but we promise it’s worth it. In the rapidly evolving landscape of social media marketing, understanding the psychological underpinnings of consumer behavior has never been more crucial. As marketers, we must navigate this complex terrain, and the principles of behavioral economics offer invaluable insights into the mechanisms driving consumer decisions online. By understanding these theories and how they integrate with practical marketing strategies, we can craft marketing that not only resonates deeply with audiences but also drives meaningful engagement and conversion.

The Structure of Choice in Social Media Marketing

Social media platforms are arenas of endless (doom-scrolling!) choices. From the content that users decide to engage with to the brands they choose to follow and the products they feel compelled to buy, every action is a decision influenced by psychological factors. At the heart of these decisions lie two powerful concepts: the endowment effect and social proof influences.

The Endowment Effect: Creating Personal Investment and Ownership

The endowment effect describes a phenomenon where individuals ascribe more value to things merely because they own them. In social media marketing, this effect can be leveraged by creating opportunities for consumers to feel a sense of ownership or personal investment in a brand or product. Tactics such as user-generated content campaigns encourage this feeling of ownership, making followers more likely to value the brand and its offerings. This psychological principle underscores the importance of creating content and experiences that foster a personal connection with the brand, transforming passive observers into active and engaged brand advocates. If we feel like we own it, then we behave and buy accordingly. 

Endowing E-commerce

For e-commerce brands, this can be harnessed by creating experiences that mimic ownership before the purchase. A story that illustrates this principle in action involves the Nike By You customization service. This innovative platform allows customers to design their own sneakers by selecting colors, patterns, and materials, and even adding personal iDs. This level of customization fosters a deeper sense of ownership and personal investment in the product even before purchase. By giving customers the opportunity to create something unique, Nike taps into the endowment effect, making consumers value their custom sneakers more highly than off-the-shelf products. The personalized experience not only enhances customer satisfaction but also increases the likelihood of purchase, as the customized product becomes a reflection of the consumer's identity and preferences.

Endowing Lead Gen

For lead generation brands, especially in B2B service sectors, the endowment effect can be utilized by offering potential leads a taste of the value they can expect. This could be through free consultations, reports, or access to exclusive webinars. A compelling case comes from HubSpot, a leading provider of inbound marketing, sales, and customer service software. They offer potential leads a taste of the value they can expect, directly tapping into the endowment effect. They offer a variety of free tools, resources, and consultations designed to demonstrate their expertise and the utility of their full suite of products.

One of their strategies includes offering a free Website Grader tool that evaluates a website's performance, SEO, mobile readiness, and security, providing actionable feedback. This not only showcases HubSpot’s knowledge in improving website effectiveness but also makes businesses feel invested in the insights provided, encouraging them to consider HubSpot’s paid offerings for more comprehensive solutions.

Social Proof Influences: The Power of the Crowd

Social proof, the concept that people will conform to the actions of others under the assumption that those actions are reflective of the correct behavior, is a potent tool in the social media marketer's arsenal. Consumer choices on social media are heavily influenced by what they perceive as popular or endorsed by their peers. By highlighting testimonials, influencer partnerships, and the popularity of products or services, brands can tap into the persuasive power of social proof. This not only amplifies the perceived value of their offerings but also significantly impacts consumer decision-making processes, steering them towards positive engagement and purchasing behaviors.

Social Proof for E-Commerce

E-commerce brands can leverage social proof by showcasing customer testimonials, user-generated content, and influencer endorsements. A standout example of an e-commerce beauty brand leveraging social proof through customer testimonials, user-generated content, and influencer endorsements is Glossier.

Glossier, a beauty brand that emerged from a blog, has become synonymous with leveraging social proof to drive its brand forward. Their approach revolves around encouraging customers to share their experiences with Glossier products on social media platforms, creating a wealth of authentic, user-generated content that serves as a powerful endorsement for potential customers.


  1. User-Generated Content (UGC): Glossier’s strategy encourages customers to post their own photos using Glossier products, often with the hashtag #Glossier. This has led to a deluge of real customer photos and testimonials across platforms like Instagram and TikTok. By reposting these images on their official channels, Glossier showcases real people using their products, which acts as a strong form of social proof and encourages more customers to share their experiences.


  1. Influencer Collaborations: Glossier has also mastered the art of influencer marketing by partnering with influencers who embody the brand's ethos. These collaborations often involve influencers sharing their personal experiences with Glossier products through tutorials, reviews, and everyday makeup looks. Seeing trusted influencers endorse Glossier products reinforces the brand's reputation and persuades followers to try them out.


  1. Community Engagement: Glossier has built a strong community around its brand by actively engaging with customers on social media and beyond. They listen to customer feedback and often incorporate it into product development, which further strengthens the trust and loyalty of their customer base. This community-centric approach not only fosters a positive brand image but also amplifies the effect of social proof as customers feel genuinely valued and heard.


The success of Glossier’s social proof-driven strategy demonstrates the power of leveraging real customer experiences and influencer endorsements in building a brand that resonates with the modern consumer. It’s a clear testament to how e-commerce brands can effectively use social proof to enhance their visibility, credibility, and customer base.

Social Proof for Lead Gen

For lead generation brands, social proof can be manifested through showcasing client testimonials, case studies, and industry accolades on social media platforms. This not only builds credibility but also shows potential clients the successful outcomes others have achieved. Salesforce, a leading provider of customer relationship management (CRM) software, effectively utilizes social proof to attract and retain clients. The brand showcases an extensive collection of customer success stories on its website, covering a wide range of industries and businesses of all sizes. These narratives detail how companies have transformed their operations, increased sales, and improved customer service by implementing Salesforce solutions. By highlighting real-life examples of satisfied customers who have achieved tangible benefits, Salesforce employs social proof to demonstrate its credibility and the value of its products. Prospective customers visiting the Salesforce website can easily relate to these success stories, see the potential for similar outcomes in their own businesses, and feel more confident in choosing Salesforce as their CRM provider.

Narratives That Bind: Storytelling with Behavioral Principles

Both the endowment effect and social proof can be further potentiated through storytelling. E-commerce and lead generation brands alike can tell stories that highlight how real customers have become emotionally invested in their products or services and the successes they've achieved. This approach not only humanizes the brand but also makes the behavioral principles more relatable and powerful.

For instance, an e-commerce brand can share stories of customers who found the perfect gift for a loved one, emphasizing the emotional value and personal connection to the product. Meanwhile, a lead generation brand might share a narrative of a business facing a challenge and how their services provided a solution, emphasizing the transformation and the role of social proof through testimonials within the story.


The intersection of behavioral economics and social media marketing presents a fertile ground for innovation and engagement. By understanding and leveraging the psychological principles that influence consumer choices, marketers can craft strategies that not only resonate on a deeper level but also drive meaningful actions. As the digital landscape continues to evolve, the brands that succeed will be those that adeptly blend the rich insights of behavioral economics with the dynamic capabilities of social media marketing.

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