Do you have a decision-making blind spot?

As I watched the first of the Chilean miners being winched to safety on the news last night it struck me that history has been created today…

I have to confess I’m not a big fan of any kind of confined space and I can’t imagine what it has been like for those guys… the idea of caving or pot holing makes me feel quite uncomfortable… particularly since ‘She Who Must regularly reminds me that I’m ‘…no racing snake’ for such activities – usually whilst I’m tucking into a substantial Sunday roast…

So once the paparazzi frenzy has died down a little, and these miners have been able to spend time with their families they’re apparently going to be medically checked out, (by ‘above ground’ psychologists, and behavioural scientists)…

Why? The unique (and unfortunate) situation that these people have had to endure have created a perfect environment to provide better understanding on… how teams function under life-threatening situations, how people deal with isolation, uncertainty, problem solving and choices under pressure…

Now of course not all of those things they’re going to study are relevant in what we do in our on-line selling, but some aspects are, particularly the decision making process. After all, there’s usually a ‘right’ choice that we’d prefer visitors, or readers to make and we’ll do much better if we know what will cause them to choose as we want them to.

One specific example that comes to mind was in an article that I read in an in-flight magazine recently on the way back from Scotland.

Psychologists have known for some time that human beings appear to have ‘blind spots’ in decision making. When faced with uncertainty the vast majority of us tend to fall back to mental short cuts that don’t provide us with ‘rational’ choices.

Most people chose to ignore information if it contradicts their beliefs … and many of us stubbornly cling on to facts even after they’ve been disproved…

It seems that we all can have a tendency to be over confident in our ability to make predictions, or can be swayed by a recent bit of news…

We can play with this idea a little and maybe find a way to increase our sales…

Let’s use a real-life retail example… by adding a second bread making machine to a retailer’s line that was almost 50% more expensive than the £180 model already offered, do you know what happened..?

Although the company didn’t end up selling very many of the higher priced machines, sales of the less expensive product almost doubled!!

The thing is that the original bread maker was no different; it just suddenly APPEARED to be better value because the consumer had a comparison product.

So, if we have a product for sale it can drastically increase sales if there is another similar option that costs much more than the item we originally wanted to sell. And oddly, if we introduce another similar product that is ridiculously cheap, sales of the ‘reasonably priced’ item soar even more as people shun the cheap option on the unproven basis that ‘you only get what you pay for’.

I say unproven simply because many of us believe it about all markets because we are certain we have seen evidence of it. For example, we buy cheap washing up liquid and it lasts no time at all whereas when we buy, say, Fairy Liquid, we can see it lasting many times longer – based on that we assume it is similarly true for clothes where price is actually determined by who designed it and where you buy it and bears no relation to how long an item may last or how well it will survive the washing machine…

(Please notice my ‘new man’ credentials – I know all about washing up and washing machines J ).

In fact in many markets price is totally about controlling demand – oil and credit being the best known examples (remember interest rates are used by the Bank of England to control how much people can afford to borrow).

However…beware the choices syndrome!! If you offer a basic, mid-range and deluxe version of essentially the same product all will be well and you sell mostly the mid-range version BUT if you offer 3 completely different products with wildly different features and no obvious way of comparing, many people will not want to think that hard about which they want and will actually buy nothing whilst they go away and ‘think about it’!!!!

So don’t be frightened of introducing a few high priced ‘breadmakers’ to your range too, so long as you have an easy way of people comparing the differences… and see what happens??! (I’d love to know how you get on…)

To your success,

Tim Lowe

Publisher, Tim’s Business Lowe Down

Tim Lowe