What Every Marketing Professional Needs to Know About Optimism
by Tim Witcherley
on Jun 10, 2016
Optimism would be funny if it wasn’t so tragic.
Over the last half-century, much of popular psychology has extolled the benefits of an optimistic outlook. From curing cancer to achieving professional success, we are led to believe that it’s all down to positive thinking. It isn’t.
You run a campaign and leads fall out of the sky so you run it again. It flops and you’re sacked for wasting the company’s money. You are left bemused and sink into victim-mode as you find ingenious ways to blame anyone but yourself. For a marketing professional, optimism can cost you and your clients an awful lot of money. Here are two typical basic errors made by the optimistic marketer:
- You decide you want marketing to achieve 10% growth. You rustle up some kind of justification for how this will happen. It doesn’t. So next year you decide you’ll achieve 20% growth to make up for the disappointment. Will you never learn?
- You start your new job as a Marketing Director and you hire an agency and you wait for the leads to stack up at your door. At the beginning you’re certain then hopeful then disappointed then resentful then angry then you make the same ridiculous assumptions all over again and hire another agency. I wonder what the outcome will be?
The pressure to be optimistic, cheerful and positive is overwhelming. It is often misplaced and damaging. Here’s why:
- It creates a climate of emotional unreality. In the 1980s sociologist Hochschild asked a group of Swedish flight attendants to be always cheerful, optimistic and positive. First they got stressed and then they got ill. Try it yourself and you’ll feel the same.
- Our optimism bias makes us overestimate our skill and ability to generate a positive outcome. It creates an illusion of control. For example, 90% of us believe we are better than average drivers, which clearly can’t be true. Another example: the head of the French army at the onset of WWI said, “Give me 70,000 men and I will conquer Europe.” Every other General was making the optimistic claim with equal sincerity. They were all wrong.
Above all, a bias towards optimism makes us overconfident and liable to make planning errors. It is these errors that were committed, among many others, by the marketing professional in the above example.
Optimism leads to planning errors because it makes us frame predictions about likely outcomes around best-case scenarios. A classic example of this was the cost of the new Scottish Parliament Building:
Estimated cost: up to £40 million. Actual cost: £431 million.
If you’re still puzzled as to how they could get the planning so wrong, think about the projected and actual leads generated by your last marketing campaign and if you still don’t get it, think about what happened the last time you bought a kitchen.
The economists Malmendier and Tate found that overconfident CEOs, driven by an optimism bias, took excessive risks. A marketing professional driven by the same bias would be more likely to ignore a multitude of flaws in their planning, especially the effect of competitor activity.
Finally, there is the curse of the overconfident expert. An example from economics will suffice: 11,600 forecasts of stock market returns by leading CFOs of the world’s biggest corporations were no better than chance.
What, then, is to be done?
The neuroscientist Angela Duckworth coined the term ‘grit’ to express the passion and perseverance that leads to successful outcomes. Optimism plays a positive role here, as it does tend to make people more resilient: “it didn’t work this time but next time…’ However, to get the best out of ‘grit’ you must avoid the many downsides of optimism. To get the best out of your marketing:
- Understand your biases
- Lower your expectations
- Keep going when things fail
- Work hard enough to get lucky
- Always use statistical thinking to anchor everything you do
This is the basis of Cognition’s Route to Growth. It blends psychology and marketing and it works. Most of the time. And when it doesn’t work as planned, you won’t find people cursing the Universe or hunting for someone else to blame or beating themselves up in corners. You’ll find a team of people analysing calmly what happened and setting out a measured path to a better outcome.
That’s marketing at its most resilient and effective.