How do cognitive biases affect companies in their efforts to deliver an outstanding Customer Experience?

After reading Rolf Dobelli’s book “The Art of Thinking Clearly” and while investing some time in reading about failed Customer Experience initiatives (for example here, or on this great post by Don Peppers) I started thinking about how some common mental biases might affect the Customer Experience efforts in organizations.

Below are some of the most commonly known cognitive biases that may impact teams and management while trying to deliver the best Customer Experience. In your opinion, which ones play a role in CX? Which ones may lead CX initiatives to fail?

Survivorship bias: Leads you to overestimate chances of success, because successes are much more visible than failures. When we only pay attention to people or initiatives that succeeded and ignore those who failed, we risk becoming overly optimistic. Visiting the cemetery of failed initiatives helps build awareness. Do we overestimate the chances of our CX to succeed because we have heard/read about other successes and not about the failures?

Sunk cost fallacy: The tendency not to discontinue or stop an activity or initiative only because of the investment (effort, money, emotion, etc) already made, even when the activity is an obvious failure. “I Have already read half the book, I may as well finish it” (even if I don’t like it). “We have already invested 10 Millions in this campaign, it would be a huge waste to stop it” (even if it’s not achieving results). Are we rational enough to realize when an initiative (CX, for example) should be stopped or changed?

Incentive-super response tendency: A couple of hundreds of years ago a colony issued a law to address a rat plague: For each dead rat someone brought, that person would get some cash. The result of the law was not a reduced rat population; it was that people started breeding rats. We react to incentives, not to the intentions behind incentives. Good incentive plans need to harmonize incentive and intention. A good example: In ancient Rome, bridge builders had to stand below the bridge they had built when it got inaugurated. In my career I have seen incentive plans or goals set for service teams that did not necessarily harmonize the intention and the incentive. How big of an issue is this for a companies’ CX?

Confirmation bias: We tend to interpret new information in a way that it matches our existing theories and beliefs. Disconfirming evidence is minimized, treated as special case or exception. We are more likely to believe information that confirms opinions we already have.

Hindsight bias: Looking back, events seem to have been perfectly predictable, while in reality they were far from that. This bias lets us believe we are much better predictors than we really are. We are often not aware of how volatile, uncertain, complex and ambiguous (VUCA) the world is.

Outcome bias: Judge a decision based only on the outcome and not on the decision-taking process. Outcomes are important, but we should not judge the decisions that have been taken only by the outcome.

Dunning-Kruger effect: When confidence and experience are mismatched. Some people are full of confidence, even when it’s clear that they have no idea what they are doing. This sometimes leads people with low ability to have an illusion of superiority. It works both ways, often very capable people are less confident in their skills.

Planning fallacy: When we underestimate the time and effort it takes to complete a task or project. When we plan only for best case scenarios and have difficulties in correcting the course when things - shockingly - don’t go as planned. I have seen this frequently and have been a victim of the fallacy myself.

Availability Bias: We believe that first thing that comes to mind (the information that is more easily accessible or more recent) is most important. Going to the VoC and customer behavior data instead of acting instinctively could be a way to beat this bias in CX initiatives.

Reciprocity Bias: We can’t stand to owe someone something. We tend to want to pay our debts. (The reason why clients or prospects get invited to soccer games or dinner)

Here, as an example, what Google does to beat unconscious bias in the workplace.

In your opinion, which ones play a role in CX? Which ones may lead CX initiatives to fail?

Author image
Customer Experience and Organizational Leader | Successfully led B2C and B2B Customer Service operations for international companies in different industries for over 10 years.