Death by Confirmation Bias

There is no more expensive mistake than the rejection of new findings without the critical examination of methods and data used. Continually spending money for research that confirms what you already know is a pointless exercise.

Confirmation bias (also called confirmatory bias or myside bias) is a tendency for people to favor information that confirms their preconceptions or hypotheses regardless of whether the information is true.

The assumption that you already know how customers feel about your products or service, is the first step on the path of destruction of your brand’s equity. At first, this assumption will make you subconsciously filter any information about your customers, accepting only that which supports your beliefs. The marketplace changes very quickly and if people are afraid to bring executives any new intelligence that challenges their bias, the gap between customer expectations and the experience the brand delivers, can open very fast. The longer this change is ignored the wider the gap becomes. Here are some examples:

Many brick & mortar retail executives are convinced that their problem is price competition from online retailers. Meanwhile the customers say that the customer service is the most important attribute they hope to experience when they shop at brick & mortar stores – and they don’t get it there. Below is an example of Best Buy customer feedback analysis.

 

BestBuy Customer Intelligence

As US retail executives continue to hold on to their assumptions and refuse to hear what customers really want, their stores’ traffic keeps declining and profit margins follow the trend. The latest news is about Radio Shack closing 1,100 stores in cost-cutting move, but they are not alone. The gap keeps widening as the ill conceived cost-cutting measures are reducing in-store product inventories and floor personnel training. That perpetuates the self-fulfilling prophecy of loosing more and more customers to online retailers who provide a better experience at the same (not lower) price levels.

Whenever company executives ask which model of their brand the customers like most, they always expect to hear that their customers love their flagship product. When customer experience research points to a “lesser” model as a customers’ favorite, most executives dismiss the findings outright, without any attempt to examine the data. The chart below illustrates the middle range Nokia Lumia 925 (NPS=73) outscores the Nokia flagship 1020 (NPS=28) in the customers popularity. In our estimation it also outsells Lumia 1020 by at least 2:1 margin.

Nokia phones social NPS

 

Data set=2,871 customers feedback (unsolicited).

A deeper look shows that the barely acceptable reliability, touch screen and web browsing experiences Lumia 1020 customers reported, are the causes of the much lower Net Promoter Score.

Root cause of low social Net Promoter Score

 

Positioning of a product based solely on features, functions and tech specifications, without regard to the realities of the market, reduces the value of the brand. Designation of a weaker model as the flagship product sends a signal to consumers that the company does not value the experiences of it’s customers. The irony is that these customers are the ones who create a value of the brand.

“When I think I know enough about a subject, I stop learning. Yet, the world continues to evolve without me.” – @briansolis

This entry was posted in Customer Experience CX, Customer Intelligence, Market Intelligence and tagged , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *