Seeing is believing ?

I came across an interesting article about a paradigm in the way we choose to believe information.
According to researchers M.B. Welsh & D.J. Navarro from the University of Adelaide in Australia, we are subject to a phenomenon called "Base Rate Neglect" which means we tend to give a stronger weight to information gathered depending on whether it is recent or not (age), geographically relevant (location), and depending on the source and the sample size.
Beyond the very technical content of the article, I found enlightening the way that we discount information and what we choose to believe.

One particular example is a research about Swans, where 999 swans observed around the world are white and one found in Australia is black. Although the probability that the next swan encountered will be white is very high (as per the base rate), research shows that the subject after observing a regional variation is suddenly more prone in believing that the next swan encountered in the same region could actually be black. 

This phenomenon can explain, for example, how negative consumer experiences can ruin brand image quickly. 

But it also opens an interesting door on how to reverse negative brand image. And how one can manage information and marketing activities to reverse consumer beliefs. 

Showing a radical change (something as different as finding a black swan), concentrating on creating positive consumer experiences in stores as well as using word of mouth and PR tactics to spread the word can help reverse previous perceptions. 

Intuitive Marketing

Certainly there is a difference between a little market research and too much market research.

Data can sometimes be your enemy.
I'll remember an example in the book BLINK (Malcom Gladwell) about this retired army general who kept the pentagon in dismay over a simulation of war in Iraq. Why ? Because the pentagon was running sophisticated simulation tools who were trying to predict and calculate everything whereas our General was using his experience and intuition built on the battlefield. He engaged in a series of guerilla tactics and moves that the pentagon did not see coming... Too busy looking at complicated spreadsheets ;-)

Well, I think this illustrates well the point today. Too much information kills information. You can loose yourself into it. Remember the Game theory they teach you in school.
- You move they move = status quo
- You move they don't move = you win
- You don't move they move = they win
- Nobody moves = nobody wins.

If your competition starts doing promotions and you do some too at the same time... You go back to equilibrium. Unless this has a global effect of dragging more people into stores overall.... But that's not always the case. Hence you always loose somewhere else.

The point I am making with all this is that when it's action time don't hesitate because often it's the player who makes the move first who will cash in until everyone else follows. Study enough data to make your business decision in confidence. Then keep the studying for later when it will be time to analyze the cost / benefits of your move.

Don't get me wrong research is great... It's just that you could be doing just that ;-)