When it comes to understanding customers, look out for hindsight bias.


Prediction is Easy, After the Event has Happened!

Hindsight bias, also known as the knew-it-all-along phenomenon happens when people report with a high degree of confidence, that they would have predicted an outcome, even before the event occurred. Of course this prediction takes place after the people already know how the situation will play out.


Thanks to judgment and decision researchers like Amos Tversky, Daniel Kahneman, Baruch Fischhoff, and Paul Meehl, we have seen, since the early 1970's, where hindsight bias can be found in many domains such as historical writings, physicians recalling clinical trials, and in the judicial systems. And this bias is also prevalent in the business world.


Anyone who has spent time conducting customer research is all too familiar with this cognitive bias, even if they did not know it by name. It is fairly typical that right after customer research results are revealed, many executives and managers are quick to respond that the research “didn’t tell them anything they didn’t already know”. Even though we are approaching 50 years of research that suggests otherwise. This reaction can create a barrier when it comes to investing the resources to work with customers to find out how they think and what they need.


So, how do we get such naysayers on board with wanting to understand more about customers? There are many ways to promote the value, but here are 4 sure fire ways to approach this situation.


1) Involve those who will use the findings early in the planning process. Ask them what information would help them make better decisions? Ask them what they currently know about their customers? Inquire on what things they would like to know more about their customers?


2) Be sure to record the internal conversations and take good notes. Build out a simple diagram about how the customer is viewed and circulate that information to the working team. Before conducting the research, make sure that you have agreement that the visual is a solid representation.


3) After the research is done, do a pre and post comparison of what you expected to find and what you learned.

Do not use this review as a forum to show failure on anyone’s part of customer understanding. Instead position it as a positive learning event.


4) Be sure to connect the dots and show what the implications are of this research. Otherwise you will just have a large number of unused charts and grafts and the team will say, “see, we knew it all along, we already know what customers want”. And you will be defenseless to prove otherwise.


Of course, taking these steps will add addition time to completing the research. However, having research that people value is worth adding a little extra time.

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