We are drowning in data. And more of it cascades on to our mobile, lap top and desk top screens every minute. But instead of ushering in an age of hyper-rational secularism, the opposite may be occurring.
In an age of relative transparency, humans appear as inclined as in previous ages to filter information through a tightly woven screen of beliefs. If not more so. Though ostensibly counter-intuitive, this may be evidence of a natural response to confusion bred of uncertainty. Who does one trust? Whose numbers does one have the time to validate? We may have simply substituted one form of darkness based on lack of information with one based on fear of misinformation.
All spheres are affected: business, politics, not-for-profits. An advocate for a new project, a new candidate or a new cause can present overwhelming quantities of data, but if those making the decision are not inclined to believe or accept it, the data will not change their minds.
Appeals to emotion and passion may be far more successful than appeals to reason. Design triggers a positive inclination. Data serves to justify the rightness of the purchase decision. Which is not to say that one is right and one is wrong. In many, if not most spheres of influence, there must be a connection between the two. Which highlights another aspect of the required decision: another consequence of having access to so much information is that the gray areas have expanded at the expense of the black and white.
There are those who speak with great certainty about many topics, but in the real world, where bigger decisions must be made in increasingly shorter periods of time, the nuances and subtleties outweigh the absolutes. In the end, we are often left with our experience, our training and education. The problem is that the acceleration of knowledge and innovation frequently render that experience and training obsolete.
Marketers of every type are attempting to insert more certainty about their products and services into an uncertain behavioral environment. But they may well find that their path to that conclusion is most effectively couched in terms that appeal to the mysterious and ephemeral. JL
Leigh Drogen comments in his blog:
I am always deeply intrigued by irrational behavior and its effects on complex systems.
In my opinion, the job of an astrophysicist is far easier than that of an absolute return potfolio manager. In the former you get to work within the confines of science and rationality, in the latter you have to battle every inherent flaw we as humans possess. But that’s what makes markets fun, there is no right and wrong way to navigate them, because at the end of the day it’s about navigating the irrational actions of your peers.
Over the course of my (thus far short but intense) career, I’ve had the chance to spend a good amount of time learning about several major irrational or imperfect behaviors that classical economists refuse to model in their perfect world of “Econs”. But none has been harder for me to accept than the truth that while you can get someone to believe a statistic, they will never truly accept it without an emotional connection they can use to mollify their fears of what that stat means.
At Estimize, I have been (painstakingly) learning how to wrap a story around the fact that our community is more accurate than the sell side Wall Street analyst consensus number you see listed everywhere. And to be honest, I have failed pretty badly at this very important aspect of brand building.
Why?
Largely because I was stubborn and refused to accept that statistics were not enough for people to internalize what was taking place. People will believe statistics, but they won’t care unless you can connect it to a specific story so that they can get over their fear of not understanding the why.
Why is the Estimize community more accurate when half of its contributing members are students, corporate finance professionals, tech geeks, random individual investors who’s day job happens to be attack helicopter engineer? That’s a huge affront to the notion that sell side Wall Street analysts spend all this time and effort yet as a group are less accurate. People have a really hard time swallowing that stat, no matter how much data you have to back it up.
I can recite the fact that the Estimize consensus is more accurate than Wall Street greater than 67% of the time, 77% of the time when there are 20+ estimates for a release, but it falls on deaf ears mostly. Many times I get responses to the effect of, “but how are they making their estimates, who are these people, what’s their motivation.” And I can tell immediately that the amazing statistic I just told them went in one ear and out the other because they had nothing to connect with in their experience that said, yea I get why that’s the case.
So while the quants that we sell data to couldn’t care less and are just interested in how they can make money, not everyone thinks logically like that. It takes a lot more to connect with the average investor, even the hedge fund manager running $10B. No matter how educated or experienced you are, statistics don’t drive home the message because from birth we are wired to think it terms of stories. We associate with individuals, not groups, and certainly not some strage idea that the actions of a group as a whole are very different from the actions of any individual of that group.
I am still learning how to sell our story at Estimize by making the statistics a secondary pitch, not a primary one. It’s not easy. But I am positive that if you are attempting to change the way people think by throwing statistics at them, even very valid ones, you’re doing it wrong. Focus on making the emotional connection, not rationalizing.
We’re not “Econs”, we’re “Humans”.
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