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Optimism bias

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Optimism bias is a cognitive bias that describes our tendency to firmly believe that we are less likely to experience negative events. For example, have you ever wondered why people tend to keep on smoking even though the cigarette containers clearly depict the high health risk of smoking? Well, there’s no better explanation for that than the optimism bias. According to the studies, it is proven that the majority of people who smoke are not concerned with the cancer risk as they believe the likelihood for lung cancer is somewhat very less for them. AS per social psychology, major influencing factors behind the optimism bias are, our desires, the state of mind (mood) and our cognitive mechanism.

However, in the marketing perspective, the role of the optimism bias towards Conversion Rate Optimization (CRO) is absolutely vital. Well, it’s a two edged sword! As a digital marketer, if you happen to be biased to this psychological tendency, then the risk of failure is somewhat considerable. Yes, when you think you are less exposed to failures and fatalities in the market, and with a few bad moves you can kill your business. On the other hand, if you are smart enough to see the potential of gaining the benefits of your target audience being biased to optimism bias, then you win!

Table of contents:
  1. Optimism bias, digital marketing and Conversion Rate Optimization (CRO)
    1. Setting benchmarks based on the statistics from an appropriate reference class
    2. Use different analytical tools to gauge performance to make decisions
    3. Optimism bias, target audience and Conversion Rate Optimization (CRO)
  2. Final thought

Optimism bias, digital marketing and Conversion Rate Optimization (CRO)

As a major result of the optimism bias, we not only tend to overestimate our capabilities, but also overestimate our control over the environmental factors. This is not a great initiative in the context of marketing. Therefore, it is of great importance for every digital marketer to understand the optimism bias, its impact on marketing and how to prevent it to make a difference towards the Conversion Rate Optimization (CRO). As the definition and the impact were already discussed, let's have a look at how to avoid it!

Setting benchmarks based on the statistics from an appropriate reference class

Before you initiate planning your marketing activity, identify a reference class of the same context of your marketing campaign; preferably a successful competitor or a set of historical case studies. Learning from competitors is one of the key success factors, as it prevents you from experiencing the failures that your competitor faced during their learning curve. The benchmarks you set may differ based on the nature of your marketing campaign. However, as general you can choose metrics for planning activities and time management. Then create a report summarizing your benchmarking details. As per the findings of your research, adjust your marketing campaign accordingly based on customized predictions. This methodology can greatly reduce the possibility of being framed to the Optimism bias as now your decisions are based on a profound foundation.

Use different analytical tools to gauge performance to make decisions

Coming to conclusions based on valid information is the way out from the optimism bias. You can use online tools such as Google analytics, Facebook analytics etc. to have a clear picture on your target audience's behavior to assess the strength of your digital marketing efforts before making decisions blindfolded out of faith.

Optimism bias, target audience and Conversion Rate Optimization (CRO)

By approaching the customers tactically in accordance with the optimism bias, the conversions can be definitely boosted. Here are some top tips that can be implemented.

Always, address your target audience positively: In order to support the fact your target customers don't have a risk of experiencing a loss from your end, convey your brand message on a positive note.

Put customers' desires first, not yours: You may see things differently than your customers and for you highlighting the strengths of your product and services might be the key purpose. It is indeed understandable, but it should be done walking in the shoes of the customers, not solely based on your preferences. As you create your social media or the web advert, align them with the desires and dreams of the customers as to further the case of the optimism bias towards the Conversion Rate Optimization (CRO).

Address negative feedback carefully: People making decisions with optimism bias, never stay around if they are threatened with a loss. This is when successful negative feedback handling comes into play. As you address the negative feedback, be sure to clarify that the impact extends beyond the individual concerns.

Final thought

With or without our knowledge, our decisions can be framed with the optimism bias which is our tendency of thinking that there is a less likelihood for us to face negative events. However, as a marketer, if you are framed to this bias, then your business is at a risk! It's not only vital that you hop out from the bias to make decisions, but also to alter your marketing activities to influence the consumer decisions to your favor.

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The references contain experiments and studies that prove this bias is there.

1. The Optimism Bias: A cognitive neuroscience perspective
2. The optimism bias
3. The effect of induced optimism on the optimistic update bias
4. The effect of induced optimism on the optimistic update bias


Would you like to go more in-depth? Here are our recommendations:

The Optimism Bias: A Tour of the Irrationally Positive Brain by Tali Sharot Buy this book
The Influential Mind: What the Brain Reveals About Our Power to Change Others by Tali Sharot Buy this book
Thinking, Fast and Slow by Daniel Kahneman Buy this book

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