When making a considered purchasing decision in unfamiliar territory, it’s necessary to solicit others’ opinions as a proxy for your own, in order to gauge how they might project onto yours. This is what the phenomenon known as word-of-mouth is all about. However, if you restrict your data collection to only those whose tastes are known to be exceedingly similar to your own, you’re merely entertaining ideas similar to your own – what’s known as confirmation bias. To truly make a wise decision (especially when the stakes are high), it’s necessary to court dissention. Put another way, refining one’s opinion of the unknown requires a broader data set than confirmation of one’s existing, positively-oriented suspicions — which is what you’re likely to get when conferring with people whose tastes you already know to be similar to yours. A genuinely comprehensive exploration of attitudes toward a particular option requires comparing your preferences to people whose tastes you know to be dissimilar to yours. For, if people whose preferences differ from yours also approve a product that you’re already inclined toward, it’ll allow for more refined review of perceived benefits, presenting the opportunity to dispel perceived misgivings as well as confirm suspected positive attributes.
This is one of the many fascinating findings from a recent paper from the Wharton School delving deeper into the impact of social referral (aka, word-of-mouth) on the consumer purchasing process. In particular, the above discussion is put far more succinctly in the article’s synopsis – to wit:
[The researchers] contend that under the right circumstances, a company that showcases reviews from a consumer’s social groups that may include dissimilar product preferences (i.e., an imbalanced relationship) will actually yield the highest profitability. Providing no reviews at all — a temptation for every company — actually causes a decline in sales, they say.
The irony in these academic’s findings is that the very thing that makes us most comfortable — conferring with others of similar tastes — is the thing that has the potential to confound making a wise purchasing decision. Birds of a feather flock together, but as we all know, groupthink is all too common, and it’s easy to make mental shortcuts in the desire to be proven correct — which can make us all the more prone make a poor decision in the long run.
Something to consider as you plan your next big purchase …