/ Customer Satisfaction

Cognitive Bias in CX

Prof Adré Schreuder

Founder, Shareholder & Chief  Visionary Officer (CVO)

This is the first article, in a series, that I am writing about the role of perception and more specifically cognitive bias in customer experience. During the research for my first book I realised that many CX practitioners do not take cognitive bias into account when attempting to design the optimal customer experience for their clients; possibly because they have never heard of it. In my view this is a major omission. The science of perception and cognitive bias has its roots in the fields of psychology, neuroscience, consumer behaviour, behavioural economics and the physiology of human senses. A cognitive bias is a mistake in reasoning, evaluating, remembering, or other cognitive process, often occurring as a result of holding onto one's preferences and beliefs regardless of contrary information.

The idea for this series was born from a April 2018 article written by Oliver Thomas in the Management Review Quarterly with the title "Two decades of cognitive bias research in entrepreneurship: What do we know and where do we go from here?". It made me reflect upon  how little  we (as CX practitioners) know about cognitive bias in customer experience. I realised that little  has been published or even formally researched on the topic.

According to psychology expert Kendra Cherry (2018) cognitive bias is a systematic error in thinking that affects the decisions and judgments that people make. Our brain is continually trying to simplify information processing by applying a host of rules of thumb to help us make sense of the world, to assist in decision making. Unfortunately, our brains do not always apply the rules of thumb to deal with our perceptual reality in an objective, logical way and this is largely caused by cognitive bias.

In 2016 Buster Benson published an excellent piece of typological categorization of 188 cognitive biases on Medium.com (https://betterhumans.coach.me/cognitive-bias-cheat-sheet-55a472476b18). His typology was based on the comprehensive coverage of cognitive biases on Wikipedia (https://en.wikipedia.org/wiki/List_of_cognitive_biases#cite_note-4) categorised in terms of the four types of problems humans encounter when we deal with perceptual reality, namely:

  • Problem 1:There's too much information
  • Problem 2: There's not enough meaning
  • Problem 3: There's not enough time and resources
  • Problem 4: There's not enough memory

John Manoogian proposed to visualise the Benson Cognitive Bias Typology that resulted in the following excellent illustration that can be ordered as a high quality print poster (see https://designhacks.co/products/cognitive-bias-codex-poster) :

It is now recognised that behavioral economics has a serious role to play in more effective customer experience and marketing. A study conducted by Gallup in 2014 reported how 10 companies which effectively used behavioural economics outperformed their competitors by 85% in top-line growth and by adding more than 25% on their gross margin.

The significance of this trend is summarised by the following remark from Rory Sutherland - Vice Chair of Ogilvy & Mather in the UK:

The first thing to do is recognise the existence, and power, of cognitive biases.

In neuroscience we ironically find one of the cognitive biases in the popular scientific meme that the human brain consists of 100 billion neurons. This conveniently round number is actually rounded upward with almost 14 billion neurons, since Dr Suzana Herculano-Houzel (2005) has scientifically proven that the human brain has approximately 86 billion neurons. This is a classic example of a cognitive bias called disestimation -

Disestimation is the act of taking a number too literally, understating or ignoring the uncertainties that surround it. Disestimation imbues a number with more precision than it deserves, dressing a measurement up as absolute fact instead of presenting it as the error-prone estimate that it really is. (Seife, 2010)

Although a number of prominent authors have been publishing on behavioural economics, cognitive bias and human perception, the field of cognitive bias has been fairly neglected in customer experience. Some of the important sources in the field are for example:

  • Daniel Kahnemann. Thinking, Fast and Slow. Penguin, 2011. (https://amzn.to/2OH9sKX)
  • Lotto, Beau. Deviate: The Science of Seeing Differently. Orion, 2017 (https://amzn.to/2PHcZ8v)
  • Dan Ariely. Predictably Irrational: The Hidden Forces that Shape Our Decisions. HarperCollins, 2009 (https://amzn.to/2NUi2AB) and Dan Ariely. The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home. Harper, 2010 (https://amzn.to/2Am3fvb)
  • Charles Holm. The 25 Cognitive Biases: Uncovering the Myth of Rational Thinking. Amazon Digital Services, 2015. (https://amzn.to/2EF9iz3)

As CX practitioners we have to seriously consider how cognitive bias in customer experience will affect our CX design, planning, strategy, journey mapping and execution. It is the ground break work of Daniel Kahneman that has scientifically shown how cognitive biases contribute to the memory of our experiences by the degree to which large components of the experience are actually erased from our memory over time (memory decay). This is particularly important since the researcher further highlighted how the actual emotions experienced during specific peaks of the experience and especially how the experience ends will have a significant effect on the memory of that experience (called the peak-end rule).

My research has proposed the following cognitive biases that I believe will have the greatest effect on customer experience. Further descriptive and confirmatory research will attempt to scientifically prove the hypotheses. The identified Cognitive Biases in Customer Experience have been categorised under the four-problem typology of Buster Benson and will be contained in four articles dealing with the 20 cognitive biases associated with each of the four problems:

Problem 1: Too much information(5 Cognitive Biases)

  1. We notice things that are already primed in memory or repeated often.
  2. Bizarre/funny/visually-striking/anthropomorphic things stick out more than non-bizarre/unfunny things.
  3. We notice when something has changed
  4. We are drawn to details that confirm our own existing beliefs.
  5. We notice flaws in others more easily than flaws in ourselves.

Problem 2: Not enough meaning(6 Cognitive Biases)

  1. We find stories and patterns even in sparse data.
  2. We fill in characteristics from stereotypes, generalities, and prior histories whenever there are new specific instances or gaps in information.
  3. We imagine things and people we’re familiar with or fond of as better than things and people we aren’t familiar with or fond of.
  4. We simplify probabilities and numbers to make them easier to think about.
  5. We think we know what others are thinking.
  6. We project our current mindset and assumptions onto the past and future.

Problem 3: Need to act fast(5 Cognitive Biases)

  1. In order to act, we need to be confident in our ability to make an impact and to feel like what we do is important.
  2. In order to stay focused, we favor the immediate, relatable thing in front of us over the delayed and distant.
  3. In order to get anything done, we’re motivated to complete things that we’ve already invested time and energy in.
  4. In order to avoid mistakes, we’re motivated to preserve our autonomy and status in a group, and to avoid irreversible decisions.
  5. We favor options that appear simple or that have more complete information over more complex, ambiguous options.

Problem 4: What should we remember? (4 Cognitive Biases)

  1. We edit and reinforce some memories after the fact.
  2. We discard specifics to form generalities.
  3. We reduce events and lists to their key elements.
  4. We store memories differently based on how they were experienced.

List of references: