Selling to us or them: overcoming the threat of egocentric decision making in marketing
New research highlights how personal biases impact marketing decisions and what can be done to minimize this unwanted effect
One of the more interesting concepts in psychology is something called the false consensus effect, or FCE. This term refers to the egocentric tendency that most people have to project their tastes and opinions onto others. For example, someone who thinks that iced tea is best unsweetened tends to believe that most other people feel this way as well. Likewise, someone who thinks saving the environment is a good thing is often surprised to hear differing opinions because he projects his care for the environment onto most other individuals.
It’s not hard to understand why FCE might be a serious problem for executives responsible for complex marketing efforts. It would be unfortunate or even disastrous for marketers to base brand campaigns on their personal biases. Thus, FCE is an essential topic in marketing research because many studies have shown that marketers are especially susceptible to its effects. It is well established that marketers who like new products assume that most people also like new products. Likewise, marketers who like detailed product information in advertising tend to think that most consumers also prefer detailed product information in ads. To make matters more complex, research has shown that the degree to which FCE impacts a marketer is closely related to her level of empathy towards consumers, i.e., the more empathetic the marketer is naturally — or is asked to be by senior company leadership — the more susceptible she is to the often-undesirable effects of this phenomenon.
Of course, marketers are often aware that FCE exists and poses a risk to their strategies and have developed mechanisms in response. The most common of these is called preference suppression, which is the attempt to recognize and ignore personal preferences when designing marketing strategies. While studies have confirmed suppression as a common tactic to avoid FCE, the mechanisms and efficacy of suppression are not fully understood. Newly published research by Walter Herzog, Johannes D. Hattula, and Darren W. Dahl addresses this gap, with interesting implications for marketers everywhere.
To understand the nuances of FCE and preference repression, the researchers conducted four studies with hundreds of experienced marketers. In their first study, for example, they recruited 100 marketing executives who were asked to learn about a new product: a virtual reality headset. With product familiarization complete, the executives next learned about the startup bringing the new product to market and that its leaders hoped the first set of consumers would be university students. Next, the marketers were asked to predict how the target consumer group would respond to the new headsets after launch. Lastly, the participants were asked if their personal preferences played any role in their predictions of consumer reaction.
From the results of this study, the researchers found that most participants admitted to experiencing FCE as they developed their predictions and that they attempted to suppress their preferences in response. The researchers also found that attempts to suppress FCE were largely ineffective, which led them to a further, very interesting finding that is counter-intuitive to what one might expect. FCE suppression works best when the natural preference in the marketer is high and poorly when it is low. This ironic outcome is related to the fact that people are best able to disregard a bias when they understand and acknowledge it fully. The less understood and acknowledged a bias is, the less people are to suppress it. In this case, with preferences for VR technology often present but not fully formed in the marketers, efforts to minimize FCE were largely in vain.
In a further study, the researchers explored a more subtle problem that arose when 133 different marketers were specifically directed to suppress biases that were not well-defined. Indeed, the second study was identical to the first, except that one group of participants was given this warning:
A number of scientific studies indicate that decision makers tend to project their personal attitudes onto target customers. In other words, managers tend to equate their own evaluation of a product with the target customer’s evaluation of the product. This effect can result in severe decision errors as well as biased perceptions of the market success of new products. Therefore, please try to suppress your personal evaluation of the Virtual Reality Headset in order to estimate customers’ perceptions of the product in an objective way.
Interestingly, in the group that was not shown the warning, the researchers found the same results as in the first study. However, in the group that was shown the warning, the level of FCE was even higher in people with low personal preference. In other words, by warning users not to let their preferences affect their decisions, the researchers triggered this exact phenomenon. This effect is called “ironic monitoring” and is related to the famous “white bear problem,” in which someone who is asked not to think about a white bear suddenly becomes incapable of thinking about anything else. Interestingly, in yet another study cited in their paper, the authors found that the best antidote to this problem was to instruct managers “to abandon their suppression efforts at the first sign of ironic monitoring.”
The latter finding “is particularly important from a managerial perspective,” note the authors, “because marketers frequently predict consumer reactions to novel stimuli (e.g., product innovations, new technologies) — a situation known to result in lower levels of preference certainty.” Therefore, the study concludes, “the way marketing managers attempt to avoid the FCE in practice may frequently backfire.”
In all, this set of new findings presents some important recommendations to marketing leaders, according to the authors:
Executives should discuss FCE and its effects on their marketing teams
Marketers should understand the ways in which FCE operates with both strong and weak marketer preferences
Marketers should develop checklists of preferences, both strong and weak, that could generate FCE effects and consult them before making important decisions
A final point to consider is that while this was research focused on marketers and marketing decisions, FCE is a general psychological phenomenon and thus should be of interest in all decision-making settings. Just as it is undesirable to have personal biases shaping ad campaigns, likewise, they should not incorrectly influence crucial decisions in HR or strategy. The more executives understand how FCE operates and how to guard against it, the more chance there is that critical decisions will be made based on objective data and not egocentric personal biases.
The Research
Herzog W, Hattula JD, Dahl DW. Marketers Project Their Personal Preferences onto Consumers: Overcoming the Threat of Egocentric Decision Making. Journal of Marketing Research. 2021;58(3):456-475. doi:10.1177/0022243721998378