Evidence-based Marketing: How to overcome the overconfidence bias
What marketing errors are easiest to avoid? And how do we avoid making them?
My answer would be…those related to overconfidence. And, as to the second question, I’ll take the rest of this blog post to attempt to answer that.
Are you too confident?
In the business world, as in marketing, we usually look at confidence as a good thing. But the “overconfidence bias” can seriously harm your performance.
Here’s how Jonah Lehrer, an American journalist who writes on the topics of psychology and neuroscience, describes this overconfidence bias in The Science of Irrationality: A Nobelist explains our fondness for not thinking…
Consider the overconfidence bias, which drives many of our mistakes in decision-making. The best demonstration of the bias comes from the world of investing. Although many fund managers charge high fees to oversee stock portfolios, they routinely fail a basic test of skill: persistent achievement. As Mr. [Nobel Laureate, and professor of psychology at Princeton] Kahneman notes, the year-to-year correlation between the performance of the vast majority of funds is barely above zero, which suggests that most successful managers are banking on luck, not talent.
This shouldn’t be too surprising. The stock market is a case study in randomness, a system so complex that it’s impossible to predict. Nevertheless, professional investors routinely believe that they can see what others can’t. The end result is that they make far too many trades, with costly consequences.
Sound familiar? Is marketing a product any less complex than trading on the stock market?
How to bank on talent, not luck
I disagree with one aspect of Lehrer’s article. Not to put words into his mouth, but he seems to imply that there is no way to overcome the overconfidence bias. In marketing, I believe there is a way to do so (of course, perhaps that’s just me being …ahem … overconfident).
Let me explain what I mean, and let you be the judge…
Actually stop and ask some questions
I’m quoting a Nobel Laureate and a neuroscience journalist in this blog post, so you might have thought I was going to offer an equally cerebral observation. But, honestly, I just don’t think the solution is that complex.
Which doesn’t mean it isn’t hard. You’re busy. Your focus is on executing and hitting numbers. It can be exceedingly hard to stop the freight train of a dedicated marketing manager once she really gets moving.
But stop … and ask. What should you ask? Well, anything. Just the very practice of asking is a check on that overconfidence bias.
My second answer is, the specific questions will likely vary for your company and based on your situation, but a good place to always start is the”Six Ws of Journalism” (well, one ends with a “w”).
1. Why are we doing this in the first place?
This is, perhaps, my all-time favorite business question. We so often make the assumption that are doing the right thing. (“Hey, I called a meeting and am taking up all these people’s time, it must be a good idea.”) Overconfidence in action.
It never hurts to step back and question the entire goal and objective in the first place.
Take landing page optimization as an example. Why are you optimizing your current page? Sure, you want to improve results, but let me ask again…why are you optimizing your current page?
As Flint McGlaughlin, Managing Director, MECLABS has said, “Some pages should be optimized. Some should be torn down and started over from scratch.”
2. Who are my customers?
When I’ve been most successful, I’ve had a specific person in mind with whom I was trying to communicate. Sometimes it was someone I personally knew that fit the demographic. Sometimes it was a fictional character.
But, by personalizing the ad, email, or other communication, I was more able to accurately assess what they would find valuable, what concerns and objectives they have, and how I could best serve them.
Take this blog post. In my mind, I’m thinking of many of the marketers I’ve met at MarketingSherpa Summits. Specifically, the time-starved marketer, who is so focused on (and so good at) executing on a plan that s/he can easily fall into the trap of overconfidence bias, simply by executing, executing, executing without stopping to ask, “With whom am I speaking?”
3. What’s in it for the customer?
Spit out that Kool-Aid! And post this next statement on your office wall – The customer does not care about [insert your product, feature, service, event, or network TV show here]; they care about what brings them value.
This is one of the most difficult questions to answer honestly. The feature or product around which you’re building your entire campaign (or, perhaps, the one around which someone is telling you to build your entire campaign) may not matter to the customer at all.
Sure, you may be able to increase how much they care, thanks to the sheer mass of your media budget. But you’ll be much more effective if you’re not so overconfident that you assume you can tell the people responsible for your paycheck what matters to them.
I can’t think of a more perfect example of this than the current print ads from Budweiser, which tout the new red crown tab on their cans. This is an excellent example of using marketing to try to make something out of a feature that provides zero value to the customer – overconfidence– plus massive marketing spend — in practice.
4. Where should my customers see my marketing message?
Sure, the media planner at your agency got a great deal on space in AARP magazine, but will your skateboard really sell to the 65 and older set?
An extreme example, I admit. But now that I’ve gotten your attention, how much thought have you put into the media for your message? Do you just go with a default option? Or do you really think through your customer’s thought sequence, and understand where the message makes the most sense?
5. When should my customers receive my marketing message?
Same as above. Timing can have a huge impact.
6. How do I know the answers to these questions?
Conduct real-world, real-time testing. And let your customers answer these questions for you.
There’s nothing more humbling — and nothing that can knock the overconfidence bias out of you quicker — than conducting a test and finding out you were wrong.