ROI By FJR:Dangerous Plants

R.O.I. By Frank J. Rich

Dangerous Plants 

May 6th, 2013
By Frank J. Rich

 

Ask two shop owners how business is and you’re likely to get both answers: “pretty good” and “not so good.” How’s that possible? It’s either because business is actually as the shop owner believes; one’s reality is most often a view uniquely experienced by the respondent, or, alternatively, an accumulation of influences common to all. Not least, what we remember about the experience and how easily it comes to mind is most influential in the answer we give.

 

The logical model that delivers us to the conclusions that seem the erudition of a studied consideration over matters is more likely the result of how available the answers to questions may be. The process comes more clearly into view when we consider the frequency of a category, such as when we openly consider how many dangerous plants grow in our midst. If several come quickly to mind we conclude (as quickly) that the number must be large. If one or none comes to mind, our conclusion is quite opposite. I wonder how many people retire after age 75? If I can think of several I know who fit the criteria, I’m inclined to conclude there must be many. Again, if none comes to mind I conclude that very few fit the criteria. It just happens that way.

 

And so it is with the shop owner, who might tell a salesperson that his advertising investment in that vendor’s product has had a poor return on investment if he cannot remember any who came in waiving his ad. Alternatively, if his memory delivers the image of one or more who recently alighted on his store with his ad in hand he’s likely to say the ROI was quite good. Which do we trust? Neither, as it turns out. That is, unless the shop owner has a very good memory and is equally impressed by both results and unusually objective in his analysis of results.

 

The body of work that reveals the psychology behind this common quirkiness is known as “the science of availability,” or more technically the “availability heuristic.”

 

In simple terms the definition of the availability heuristic “is the process of judging frequency by the ease with which instances come to mind.”1 The model is simple enough on the surface, but the obvious is hidden in plain view. In considering how many instances must accumulate in the memory before they come easily to mind and deliver the obvious conclusion, science has discovered that none are necessary to inform our view; only the ease with which instances come to mind.

 

An example may reveal just how insidious the process is in separating us from the logic that would prove our conclusions about the frequency of a category; say the comparative number of earthquakes and droughts that befall us today versus the past. Since both get more attention than even horrific crimes, it’s likely that we’ll exaggerate the frequency of this category for how easily they come to mind. Obviously, the availability heuristic leads to biases. If we have recently heard of a motorcycle accident taking the lives of those on the bikes, we prepare the view that motorcycles are unsafe because the accident attracted media coverage that temporarily altered our view of motorcycle safety. Clearly, everyone remembers his own sense of an occurrence uniquely; thus, the availability bias.

 

In the effort to influence your customers positively toward your product or service it may be necessary to prepare a review of the circumstances which both enlighten the benefits of them or highlight positive experiences in their use. Testimonials work well to ease concerns about the cost and value-perceived of pricey items, for example.

 

“The Cape Cod shingle siding on this house is 35-years old, yet appears to be newly installed. And, it has never needed paint or repair in all those years. These are photos of ten other homes with similar siding that have weathered just as well. In fact, the manufacturer warranties the sidings against material wear for as long as you own the home. Doesn’t that sound like the kind of product you’re looking for?”

 

In this scripted model we are prepared for both the “ease with which successful siding” came to mind and the logic that chases bias stemming from recent exaggerated experience, and the fluency of retrieval they experienced.

 

Our sense of the historicity in our view of things naturally declines unless we prepare ourselves, and those we hope to influence for the good, with the model of availability that serves both buyer and seller–an effective model in a commercial environment given to information overload. Perhaps, only then might we succeed at delivering on the promise in the products and services of an active marketplace.

1 Thinking Fast and Slow, Daniel Kahneman

Frank Rich is founder and CEO of Encore Príst International, an organizational development company that helps individuals and organizations reach their full potential through the practice of effective business fundamentals. You may reach him at fjrich@encoreprist.com, or by phone at 866/858-4EPI.

 

To read other ROIs in their entirety, go to Business tab at Town Link.

 

Bazzo 05/07/13

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