Ross Johnson of 3.7 Designs gave an eye opening presentation about understanding human irrationality and its impact on marketing at LA2M on February 29, 2012. He began by offering a list of seemingly related facts regarding the assassinations of Presidents Abraham Lincoln and John F. Kennedy. Logically speaking, the information didn’t really tie the two events together, but the human tendency to fabricate order where there is none, made it seem that there were apparent correlations.
This was just one of many thought biases likely innate to the human mind that Ross shared. Ross explained that being a better marketer means understanding your target market, in order to influence decisions and behavior. He pointed out people assume they are being rational when making decisions, but decisions have nothing to do with logic. Ross said humans vary by culture, but genetically our minds are similar.
Ross gave several examples of innate thought bias. Hindsight bias convinces us that we already knew something because it seems based on common knowledge or common sense. So even if two generally circulated sayings conflict, we may believe both simultaneously.
Exposure bias causes us to believe that the more we are exposed to certain information, the more important it is. So, for example, if there are many stories about natural disasters, we may come to believe that there are an unusual number of natural disasters. Applying this to marketing is the frequency concept; what you say and how often you say it has an impact.
Ross used a YouTube video to demonstrate that the things we focus on shape our perception of reality. This tendency to miss or over look things around us is often referred to as “banner blindness” or selective disregard. Humans ignore what is normal and notice what is different. With this in mind, marketers can benefit by stepping out of the box to attract attention to their marketing message.
Ross explained that confirmation bias causes us to buy books that agree with our opinion and ignore information that challenges those beliefs. He pointed out that associations with images, words, context and items can have an impact on our perception without our even being aware of it. He used the example of people in a warm room are more likely to believe in global warming or a resume presented on a heavy clip board may make that job applicant seem more qualified.
Relative economics causes people to make decisions based on the best result for them in relative terms Ross points out. The example he used was price comparison on a watch that resulted in a $15 savings of 50% or a 2.5% savings on an I Pad that also results in a $15 reduction. He said people are more likely to go shop for the 50% off item than the 2.5% off item, even though the dollar amount reduction is the same. This is something to keep in mind when marketers position a price or reduction. Relative economics also causes humans to feel that something they own is more valuable because we develop emotional ties to objects and have possession loss aversion.
Anchoring may be an association with a number or an item said Ross. This perception explains why Starbucks wisely renamed their coffee cup sizes to avoid comparison to less expensive options. Ross also used the example of bidders attending an auction being asked to write down the last four digits of their Social Security number before bidding. Those bidders with higher numbers tended to bid more on auction items than those with lower numbers.
Ross said the “third person effect” partially prevents us from admitting we are influenced by thought bias, relative reasoning and emotional associations; because people tend to believe that it’s someone else who is affected. He pointed out that most people think they are unique and avoid persuasion, but he said that’s not true of anyone. Ross said humans base their reality on what they focus on, are influenced by what they pay attention to and by context and associations.
To view the video of the complete presentation, visit the LA2M archives. You can follow Ross Johnson of 3.7 Designs at @3pointross.
