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- AQ #01: From Bias to Brilliance - The Art of Unlearning ❣
AQ #01: From Bias to Brilliance - The Art of Unlearning ❣
How do marketing fallacies hold you back and what to do about it?
Ritu Jhajharia
April 20, 2023
Read time: 5 minutes
Last year witnessed hordes of corporate employees quit their jobs and switch careers, in a world reeling from the pandemic. It was the Great Exit.
And then came devastating mass layoffs, one after another, mostly by the big tech companies. Within one year the cycle is complete.
However, today we’re getting neither into the nuances of the Great Exit nor into the morality of mass layoffs.
What you see in these recent examples is a very common yet often ignored phenomenon - Argumentum ad populum or in easy words the bandwagon effect.
Felt FOMO while scrolling through your Instagram feed?
Felt a sudden surge of YOLO while watching Youtube videos?
We’re all easy prey to fallacies, oftentimes without even realizing it. Advertising often uses fallacies to its advantage in crafting persuasive communications.
And that’s what our debut edition is about - common marketing fallacies and how to avoid them.
Modern marketers deal with rapid changes and challenges such as insane amounts of data to process in digital marketing, whether AI is the new foe or friend, etc.
It is important to be aware of our misplaced notions and inherent biases to be able to think clearly and make the right decisions.
Let’s see some of the most common yet dangerously ignored fallacies that marketers usually fall prey to.
1. Sunk Cost Fallacy
The belief that you should continue investing in a project because you have already invested so much in it, even if it is no longer feasible or profitable.
The more we invest in something, the more difficult it is for us to abandon it midway.
Past expenses, efforts and time are all sunk costs, and can’t be recovered simply by continuing. But we still keep throwing good money after bad, usually in a bid to “make the most of it”.
If you find yourself in a hole, stop digging.
What it looks like?
Suppose you spent $10000 on social media marketing. The outcomes clearly indicate that Instagram is not driving sales though you’ve amassed a large (vanity) following because of quirky content.
In the quarterly review, you decide to continue spending on Instagram because it would seem wasteful to ignore your new-found following.
Decision makers often continue pumping resources into campaigns that go nowhere, brand ambassadors who add nothing, or features no one cares about.
The Supersonic Concorde debacle is an interesting cautionary tale of how devastating this can be.
How to avoid it?
define and measure KPIs
set effective goals and checkpoints
conduct regular reviews
make data-backed decisions
course correct and pivot when needed
2. Incentive Super-response Tendency
The faulty belief that incentives will always lead to desirable outcomes.
While incentives can be effective in certain circumstances, they are not always the best solution.
For instance, offering a discount on a product may lead to short-term sales, but it may not be the best long-term strategy for building brand loyalty.
It is important to ensure that incentive programs align with your marketing and business goals and don't have any unintended consequences.
What it looks like?
In a study by Dan Ariely, offering incentives for blood donation led to a decrease in donations. People who donate blood purely to help out others felt demotivated and stopped volunteering.
Wells Fargo incentivized their employees to open more bank accounts, which led to a massive scandal when it was discovered that employees were opening millions of fake accounts without customers' knowledge or consent.
How to avoid it?
consider your audience's motivation and what drives them to take action
weigh it against your desired outcome and check if both align
3. Consistency signifies credibility
The belief that people who are consistent in their behavior or communication are more credible.
While consistency is important, it should not be the sole indicator of credibility.
What it looks like?
Every other “personal branding expert” on social media takes advantage of this misconception and advises to do so too. Yet, those who provide value to their readers, not just consistency, are the ones who stand out in the long run.
A brand that sends spam emails may be consistent in its behavior but that does not make it credible.
How to avoid it?
focus on building brand trust and providing value to your audience
4. Illusion of control
The belief that we have more control over a situation than we actually do.
This fallacy often leads to overconfidence and can be detrimental to your marketing strategy.
What it looks like?
As a marketer, you often tend to believe that you can control the outcome of a marketing campaign, but there are many factors outside of your control, such as market conditions, competition, consumer behavior, etc.
Blockbuster believed that it had control over the market and failed to adapt to the changing landscape of digital streaming, leading to its bankruptcy. Netflix recognized the changing market needs and did the exact opposite and the rest is history.
Image Courtesy: Investopedia/ Madelyn Goodnight
How to avoid it?
build an agile business model with a responsive marketing strategy
be aware of external factors that may impact your marketing strategy and adapt accordingly
5. False Dilemma
The belief that there are only two options when, in reality, there may be more.
This fallacy often leads to limited thinking and missed opportunities.
What it looks like?
For instance, you may believe that you must choose between traditional marketing or digital marketing, but in reality, both can be effective and complementary to each other.
This interesting Harvard Business Case Study demonstrates that even when we hit the wall and can’t think of any other way out except the extremes, there can be a better option, an acceptable compromise.
How to avoid it?
be open-minded and explore multiple options
consider a variety of approaches in your marketing strategy
6. Argument from incredulity
The belief that something is not true because you cannot believe it.
This fallacy often leads to missed opportunities and can be detrimental to your marketing strategy.
What it looks like?
You presented an innovative marketing strategy but your top management is too afraid to get behind it because it has never been tried before.
Sounds too familiar, isn’t it?
Innovative approaches in marketing often produce the best results. And yet, both marketing and business leaders fail to see it.
IBM did not believe that personal computers would be successful and missed out on the opportunity to enter the PC market. While Apple grabbed the opportunity to defeat big brother with innovative products and marketing.
How to avoid it?
be open to new ideas and strategies that may challenge your beliefs
There are many other fallacies that we are susceptible to such as the slippery slope, correlation implies causation, outcome bias, false attribution, etc.
Reply to this email if you would like a follow-up or a deeper analysis of a particular marketing fallacy.
AQ Finds
Book - Art of Thinking Clearly by Rolf Dobelli is an unmissable read
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Which fallacies can you recognize from this article that you have fallen for in your marketing efforts?
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