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Discussion – 


Discussion – 


How To Avoid Bad Decisions, Vol. 1: Blind-Spot Bias

How To Avoid Bad Decisions

The human brain is always looking for “shortcuts,” for simple ways of cutting through complex things.

Our brains have evolved this way because quickness is often more valuable than insight, especially in a survival context. But therein lies the essential problem: our most automatic ways of thinking come at the expense of accurate understanding, even when there’s time to think and even when “survival” is a laughably distant worry (like a typical day at the office).

When these mental shortcuts get us into (avoidable) trouble, they’re called cognitive biases: “cognitive” because you think them, “biases” because they’re prejudices or presumptions that give you an unbalanced view of reality. Cognitive biases might just be idle thinking when you’re idling in traffic, but they can create disastrous dollar-and-cent consequences (or hidden marketing opportunities) wherever digital-business decisions are made.

In this ongoing series, we’ll be defining the cognitive biases you’ve seen before (even if you didn’t know the names). After this, when the voice in your head says to “check yourself before you wreck yourself,” you’ll know what to check.

Volume 1 will focus on Errors of Metacognition—in other words, our shortcomings in noticing or examining our own thoughts. So let’s get things rolling with the first cognitive bias:

Blind-spot bias

The perfect place to start because, insidiously, this bias makes all the others invisible. The blind-spot bias is a failure to recognize your own biases and imperfections of thought—a failure to acknowledge that you (like all of us) have blind spots. If you want some sense of how toxic blind-spot bias can become, imagine the danger if drivers didn’t believe cars had blind spots.

Potential marketing angle: getting prospects to be aware of you (i.e. “getting out of their blind spots”) is already the first challenge, and the prerequisite for everything else you do. Ask yourself: which groups of people (by platform, by interest, etc.) have you never targeted? Where can you find groups of people who benefit from your product, but have maybe never been exposed to it?

Choice-Supportive Bias

A difficult “balancing act” for humans: our brains are incredible information processors, yet they’re also responsible for protecting our innermost identities and feelings. If humans were perfectly logical beings (like the Klingon), there would be no cognitive dissonance, only gaps in the factual record. But when human beings are faced with contradictions, especially contradictions among their own beliefs and behaviors, they don’t stop and ponder; they drop the problem like it’s hot, and usually in the direction that lifts the most weight off the ego.

Nothing illustrates this principle better than choice-supportive bias, which is the tendency to feel positively about your own choices, no matter how flawed—and no matter how clearly any flaws are pointed out to you. Pick any example you want, because this always happens for much the same reason: there are few pills more bitter than believing you might have made a bad choice (especially if the choice is difficult or impossible to reverse).

One specific form of choice-supportive bias is called the sunk cost fallacy. A “sunk cost” is something you’ve spent but can’t get back, like a non-refundable deposit—and as a rule, people are likelier to persist in something the more sunk costs they have. It’s called the “sunk cost fallacy” because having lost money on something in the past does NOT add merit to it in the present or future, even if you become more invested in it and walking away means your ego takes a lashing.

Two notes for marketers. First: your customers have bought into this bias in one of the most reliable ways possible—literally buying into it—and it’s your job to give them observable reasons to be glad about that. Second: because sunk costs are such a tangle for the psyche, you can trust your highest-spending customers to need more of the same. Don’t be afraid to reach out to them (on any friendly pretext)… they will LOVE it and might even do you favors.

Overconfidence and the Ostrich Effect

These two cognitive biases seem like opposites, but they can still overlap.

To understand overconfidence as a cognitive bias, the essential thing to notice is the prefix over, because the point is not that virtues like confidence are bad things unto themselves. The point is that “excesses of virtue” cause problems just as much as “shortages of virtue” — and an excess of confidence, however good it feels, can interfere with your ability to think rationally. (To thinkers like Aristotle, moderation is a prime virtue because it’s the condition necessary for any virtue to exist in healthy and helpful amounts.)

It’s true: some people suck. (Link NSFW for language.) But leaving those people aside, overconfidence can be caused by benign qualities, like intelligence and leadership. One of the “dark sides” of leadership is that, in a sense, ‘fake it ‘til you make it’ never really ends for leaders because they feel responsible for the morale (and livelihoods) of the people they lead. One of the “dark sides” of intelligence is that, generally speaking, people become more aware of their own intelligence the more intelligent they become—and the more people are valued for their intelligence, the likelier they are to think of themselves as exceptional and naturally advantaged over others (not ideal for teamwork).

By contrast, the ostrich effect does not make anyone appear confident. This isn’t actually how ostriches work, but it’s an appropriately stupid misconception for naming this cognitive bias. According to the popular myth, ostriches bury their heads in the sand whenever danger approaches—in the hope that, because they can’t see danger, danger can’t see them.

The name stuck because, well, we all know the feeling. (In human terms: “Ignore something long enough and it will go away.”) The temptation is understandable: why endure extra pain and panic? But that’s not the problem here; the problem is that people can rationalize “burying heads” for as long as they want—for example, with “I need a sanity break” or “I’m staying committed to my previously-confident decision.” Meanwhile, they remain exposed to hazards which may be far costlier than their blissful ignorance—like when investors mentally check out during recessions.

The Placebo Effect

The placebo effect is wild—especially in its original medical context, where sugar pills can mimic powerful drugs simply because patients believe they’re taking the latter. But “the placebo effect” is really just one version of a bigger phenomenon: self-fulfilling prophecies, which are just as often bad as good.

William James (the “father of American psychology”) provided a perfect example of a bad self-fulfilling prophecy: a man who takes to drinking because he feels like a failure, but then fails harder because he drinks. He provided this example during a lecture on habits, and his greater point was that habits (of both thought and action) have enormous influence on our lives, whether for good or for ill. Habit is the difference between a nightcap and a nightmare.

Marketers, like anyone, can make bad outcomes likelier by fixating upon bad possibilities. Yet, cruelly, marketers have countless tools and habits which make bad outcomes easier to imagine (especially these days, because… yeah). We’re an analytic bunch for whom data can strike nerves, so we react viscerally—and we forget, for example, that those who fixate on risk are often blind to the role they play within it.

There’s no one-paragraph guide for unraveling the placebo effect in your own mind, but we’ll tell you where you can watch it happen live: Customer Service.

You’ll get some angry, spiteful messages from customers no matter how well you serve them—but there’s a surprisingly tender reason. Nine times out of ten, the message is being written by a normal person who really wants help and doesn’t expect to get it, and their message reflects their cynicism (mad is sad’s mask). If you get defensive and they have a bad experience, their prophecy fulfills itself. But if you show them (not just tell them) that you’re really there for them, many of them will dissolve into joy and gratitude. 😉


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