Every business starts with an ‘obvious’ before coming around the corner of its actual niche. Often this knowledge of who their obvious audiences are, the obvious ways they think, and the obvious needs of the users lead to confusion. Even if they mitigate these confusions with facts and figures, there seems to be an entry of cognitive bias. Businesses absorb only those things that are favorable to their existing knowledge of things and build additional knowledge from what they already know from the information passed on after market research.
Cognitive Biases and Scale of Business
Start-ups often can get blinded to major areas of their business during their operations. As and when there is a new group being formed to achieve an objective, the way they process information and make decisions varies accordingly. There is framing bias when each individual or team views a piece of information differently depending on how it is presented and received. When a company is trying to build a system, the decisions taken get qualified only through the already existing awareness of the employees. There is a cognitive bias that takes form during that process.
Cognitive Biases and the users
Businesses use the cognitive bias of users adopting a belief based on the number of users who have already adopted the belief. In this case, the business can choose the belief that they want their product users to believe. The makers can create beliefs and behavior based on these user biases.
Often habit changing products want to be used, but the users decide to stop using them because they just don’t want them anymore or their requirement is fulfilled. Habit changing is not the primary goal of a business but it is just part of it. The makers won’t just let the user be empowered enough to not use the other products that they introduce in the market nor do they want the users to stop using them because they don’t give it all in a single product. Need is a loophole in which businesses thrive. Therefore, businesses won’t give it all in a single product for the user rather they will introduce multiple products by creating a need.
Users are over-reliant on the first piece of information and the information that contradicts them. This bias is also applicable for businesses when the decisions and actions that they make only limit those existing beliefs that they have and do not get through contradicting beliefs.
Anchoring is yet another bias based on the habit of the people in fixation. They fixate on a value for a product after their calculation and do not tend to move from their forecasts on it even if the outcome moves meaningfully.
Sellers cognitive biases
Flawed marketing assumptions based on senior leadership years of experience where a seller pushes only the information based on the existing knowledge to initiate the product.
The senior being overly proud of the company leads to a misguided perception of the true value of the products and services.
Buyer Cognitive biases
Sellers’ capability can be doubted because of preconceived notions that the users have about the products. Direct personal experience can affect the user’s perceptions of the brand.
How can businesses overcome Cognitive bias?
Cognitive errors can mislead businesses into taking irrational decisions that can affect the business. A room for businesses to escape from the cognitive biases lies in the thought of not sticking around the blind areas while initiating a product. It is important for them to ask themselves. ‘What if there is a bias there?’. Addressing this question will mitigate the fear of going wrong or landing in cognitive bias.
