Following a complicated call with a client where they were seemingly blindsided to a problem in the business I started thinking about my own cognitive biases and how these influence my thinking.
I put together this list of the different biases that I try to be mindful of – I think I have fallen for most of these at some point – Number 3 more than once.
As business owners or Marketing Managers we need to try and avoid making poor decisions – This is why I love digital marketing channels as there is usually data available to understand the impact of our decisions. This removes the subjectivity and ego from decision making and allows us to test new ideas rather than simply make a change and hope for the best.
Which of the below biases are you guilty of?
1) Confirmation Bias:
Tendency to favor information that confirms one’s existing beliefs or decisions. Business owners may only seek out data that aligns with their preconceived notions about their product, target market, or marketing strategies.
2) Overconfidence Bias:
Excessive confidence in one’s own beliefs and abilities, often underestimating risks and overestimating the success of marketing strategies. Business owners might believe their marketing efforts will achieve greater success than is realistically possible.
3) Anchoring Bias:
Reliance on initial pieces of information (anchors) when making decisions. Business owners may fixate on a specific marketing approach or price point, using it as a reference point despite changing circumstances or data suggesting a different approach.
4) Availability Heuristic:
Basing decisions on readily available information rather than a comprehensive analysis. Business owners may prioritize marketing strategies or ideas that come to mind easily, rather than considering a wider range of options.
5) Sunk Cost Fallacy:
Continuing investment in a marketing strategy or campaign based on the resources already invested (time, money, effort) rather than objectively assessing its current and future potential for success.
6) Hindsight Bias:
Belief that past events were more predictable or foreseeable than they actually were. Business owners might overestimate their ability to predict marketing outcomes retrospectively, potentially hindering future decision-making.
7) Bandwagon Effect:
The tendency to believe or do something because many others are doing it. Business owners might adopt popular marketing trends or strategies without thoroughly evaluating their relevance or effectiveness for their specific business.
8) Loss Aversion:
The tendency to prefer avoiding losses over acquiring equivalent gains. Business owners might be hesitant to change marketing strategies, even if there is evidence suggesting a potential improvement, due to fear of losing what they already have.
9) Recency Bias:
Placing more weight on recent experiences or information when making decisions. Business owners might overly emphasize the results of the most recent marketing campaign without considering the broader historical context.
Awareness of these biases is critical for business owners and marketing professionals to make more informed and rational decisions in their marketing strategies. Implementing practices that mitigate these biases can lead to more effective and successful marketing campaigns.