I have been a strong believer that how people feel have a strong influence on their buying behavior.
This would sound like an obvious, logical conclusion. But it somehow gets categorized as one of those truths that need not be explored further because it is so obvious that even someone who doesn't work in advertising or marketing sees it.
The thing is, it is not that obvious to some - and somehow, we need to measure it and quantify it.
It is for this reason that in a previous life, I promoted the creation of a consumer sentiment index with the belief that this would provide planners such as myself a better view of how consumers are feeling particularly in times of crisis and recession.
I discovered in the last couple of weeks that there was in fact a theoretical framework that studies this - how social moods affect behaviors and other socio-economic changes: the science of socionomics.
I was initially doing research on Fibonacci and Elliott waves and how they could be used to enhance our predictive analytics capabilities. My readings got me to discovering socionomics - and it got me excited because of several things but mostly because socionomics seems to make sense.
How does socionomics differ?
- In the traditional view, we see recessions as a precursor to negativity in social moods. In the socionomics view, it's the other way around: Social moods are a precursor to recessions.
The traditional view proposes that social moods are a result of a recession. In the socionomic view, a recession is a result of a strongly negative mood amongst investors. - In the traditional view, scandals enrage individuals and societies, and therefore make their views and moods negative. The socionomic view is, again, the other way around: Social moods make people look for scandals.
- In the traditional view, stock markets' bullish and bearish movements determine the social moods. However, from a socionomic perspective - it is the investing-community's collective positivity and negativity that determine the movement of the stock market.
Now why am I so excited by this?
Because social moods can be measured.
And if they can be measured, then we can potentially make more accurate forecasts of where certain metrics are headed.
Socionomics experts (at least based on my readings so far) believe that social moods can either be measured directly (for example, through consumer confidence surveys not dissimilar to what we have done in UM) or through the stock market.
The latter one is probably the more controversial one: The stock market index becomes more than just an indicator of the movements of the financial market, but also a barometer of social moods and therefore of decision-points given that social moods are a pervasive predictive, explanatory variable.
Here are some videos I picked up on YouTube on the science of socionomics.
Socionomics and Pop Music
Socionomics and Enron
