Be First, If You Can!

Interviewing for that dream graduateship or prestigious MBA programme is challenging enough but is it possible that your chances of success may be a function of whether you happen to be the first interviewee that day or the last. Or what about the exam paper that you have just written? Are your chances of getting a good grade influenced by whether you happen to be the first paper that is graded on a given day or not? If you are a regular reader of this blog, you no doubt sense where this is going and you probably know you won’t like it!

The new psychological term that you need to add to your vocabulary is ‘narrow bracketing’. It occurs in any kind of activity where a small subset of cases from a larger pool is examined at intervals. So for example, an academic may take 10 papers from an overall total of 200 each day or a venture capitalist may look at 5 proposals each day from a larger pool of submissions. Narrow bracketing means that people avoid making subsets of judgements that deviate much from what they expect the overall set of judgements to be like. If you have already seen two good VC proposals and you expect about 40 per cent to be good, the remaining three on that day may be judged more harshly. So getting on that MBA programme may not just be a function of the total pool of applicants that year but also on the few others randomly interviewed that day!

This effect was demonstrated in a recent study published by psychologists Simonsohn and Gino on ten years of MBA applications at a US university. They found a persistent effect where the scores of previous applicants on a given day either positively or negatively affected that of the next applicant. For example, if the score of previous applicants increased by one standard deviation it meant that the expected score for the next applicant dropped, meaning that she would need an extra 30 points on the GMAT, 23 more months of experience or .23 more points (one a 1-5 scale) on her written application to make up the deficit. Once again, this shows the limitations of our so-called ability to make rational decisions either at work or at home!

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Make Life Easier for Your Customers!

Are the efforts of marketers making our lives harder or easier? This was one of the key questions asked by a recent comprehensive study of over 7,000 consumers carried out in the UK, US and Australia. In our information rich world, we are increasingly overwhelmed by choice. And too much choice paralyzes us – we simply can’t decide what to buy, so paradoxically, we don’t buy anything. The findings of this Corporate Executive Board study suggests that too often, firms that are spending huge sums trying to engage their customers on and offline are actually turning them away.

Some of the findings of this and other related studies, reported in a recent Harvard Business Review article make for fascinating reading. For example, businesses believe that some of the reasons consumers follow them on social sites are to learn about new products (73%), submit opinion on current products and services (69%), feel connected (64%) and be part of a community (61%). The extent to which these formed part of the consumer’s actual reasons were 51%, 49%, 33% and 22% respectively. So much for all the ‘relationship’ marketing efforts! Their main reason was to get discounts (60%) or to make a purchase (55%). Other interesting findings to note are that 70% of those using a mobile device to search are within hours of a purchase, while 70% of those using a desktop are on average a week away. Similarly, someone searching for ‘luxury cars’ is at an early stage of the buying decision process compared with someone who enters a phrase like ‘BMW vs Audi’.

The main recommendation of the article is that firms need to construct their websites to aid decision simplicity. This involves three elements. First, minimise the number of information sources consumers must touch before confidently moving forward to a purchase. Second, build trust – not in the brand, but in the information being gathered. And finally, make it easy to weigh up the potential options being considered. This involves not only the information provided but also the number of variants actually offered. Is all of this worth doing? Well it would appear so. Brands in the top quarter of the decision simplicity index were 86% more likely to be purchased than those in the bottom quarter, were 9% more likely to be repurchased and were a full 115% more likely to be recommended to friends. In 2012, less is more!

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