Question

Survival Bias in Marketing: Why There Are No Universal Formulas

Answer 1

Survival bias: definition and history
Survival bias: examples from economics, finance, and medicine
Survival Bias: Marketing Examples
Why does survival bias influence us?
How to actively identify survival bias
Should you copy the successful email templates of other companies?
What is the best way to process the survey results?
To what extent is it appropriate to copy (marketing) strategies of successful companies?

---

Survival Bias in Marketing: Why There Are No Universal Formulas

The same phenomenon is repeated every season: new books are released that tell and analyze how companies, athletes and artists have reached stardom, as if they were success manuals. The success in these cases, however, is usually obtained by those who sell the books, because readers mostly fail despite having implemented in detail the success methodologies of Steve Jobs, Dirk Nowitzki or Lady Gaga. Why can't they get it?

The formulas for success are themselves flawed . The authors of this type of book are under the influence of the so-called survival bias: by counting only the lives of people who have achieved their goals, they are distorting the analysis, since there are also many companies, athletes and artists who have applied the same secrets of success , but in vain..

Index

1. Survival bias: definition and history
2. Survival bias: examples from economics, finance, and medicine
3. Survival Bias: Marketing Examples
   1. Should you copy the successful email templates of other companies?
   2. What is the best way to process the survey results?
   3. To what extent is it appropriate to copy (marketing) strategies of successful companies?
4. Why does survival bias influence us?
5. How to actively identify survival bias

Survival bias: definition and history

Survival bias, or, in English, survivorship bias , is one of the best-studied cognitive biases in psychology. On a daily basis, we tend to be more aware of things that have gone well, so we tend to systematically overestimate our own chances of success . Examples of this phenomenon can be found in practically every sphere of life.

Definition

The survival bias ( survivorship bias ) describes in psychology the tendency that we have to focus on people or cases who have managed to overcome some type of selection process. In doing so, we tend to draw the wrong conclusions and systematically overestimate our (own) chances of succeeding ..

The term survivorship bias was coined by Allied engineers during WWII , who realized something when they discussed how to better protect their aircraft from enemy tank attacks . They had been reinforcing the worst bullet points on the returning planes, but their efforts were not working. The number of pilots who managed to return did increase, however, when they reinforced the armor that did not usually present impacts on the returning aircraft. These shields were precisely those of vital importance and those that had to be protected: if the planes were shot in these parts, they would crash. That was the reason why the planes that managed to return did not show damage to these parts.

Due to the survival bias, the engineers had initially focused on the survivors , that is, the aircraft that had returned. It was later, when also analyzing the planes that had crashed , when they found the truly essential points of the structure..

Survival bias: examples from economics, finance, and medicine

It is not necessary to look back to the Second World War to find examples of how our view of events is distorted when we focus on successes.

Investment companies regularly remove failed investments from their catalog so that they do not influence the balance sheet of the whole. Thus, at first glance, the performance seems much better to investors than it actually is, that is, much better than if they also included the funds that have caused losses.

The investors startups are regularly victims of the survivor bias, partly because the specialized media speak of millions in profits each month in the sector. Do you already want to invest in the new Google, Amazon or Apple? Think twice: most startups fail. What's more, nine out of ten startups disappear in the fourth year of life, but nobody talks about failed startups . The risk of losing your money in the world of startups is high, even if the news about it seems to say otherwise.

In medicine , survivor bias plays a very important role in estimating survival rates , for example, of cancer patients: if patients die just after being diagnosed, their cases are often not included in patient samples. studies, which skews the indices towards a more optimistic figure.

Survival Bias: Marketing Examples

Marketing is not spared the risk of succumbing to survival bias. Here are some examples of situations in which this cognitive bias is usually involved:

Should you copy the successful email templates of other companies?

On the net you will find numerous testimonials of success such as? With this email template we have increased our sales by 20% in one month ?. Do not forget that the consultants and agencies that have also used these templates, but have not managed to increase their sales, do not publish articles about it. So is the templates worth even taking a look at? Yes, it is worth it to get inspiration, but without taking the information out of its context and also checking with what interest the author publishes his valuable secret . Few disclosures are made for purely altruistic motives. If you want to adopt a strategy that you have seen elsewhere, adapt it to your target group, your product and your sector.

What is the best way to process the survey results?

Staying close to the customer is always a good idea. Staying in contact with customers can uncover weaknesses in the product and can even convince repeat customers to give the brand another chance if they are ever disappointed. However, to get a realistic view of the mood that prevails among customers, surveys are only a partially useful means, since only a small part of customers usually participate in them, usually those who have something especially positive or negative that say.

Therefore, if the feedback received is mostly negative, it does not mean that you have to rush to change the way you do things to appease disgruntled customers. In the same way, if the evaluations are mainly positive, do not be satisfied with this false security, but reflect critically on the structure of the sampling and the reliability of the survey. To get as complete an overview as possible, former clients should also be included in the sample. Keep in mind that your current customers are, in a sense, the survivors , since they are satisfied enough with the product to have continued to buy it so far.

To what extent is it appropriate to copy (marketing) strategies of successful companies?

Such a strategy worked for Amazon, Facebook has been using such a method successfully for years ... And yet, copying the procedures of companies that have succeeded does not usually give good results. Why?

Among other things, because not all correlations hide causality. Just because company X is very successful in highlighting the buttons on its website in orange does not mean that it will work for you too. Just because both Bill Gates and Steve Jobs dropped out of school doesn't mean you have to drop out to catapult your company to success. In fact, the statistics say rather the opposite: those who leave their studies, also tend to fail as entrepreneurs.

If you want to adopt strategies from others, try to choose models whose context assimilates as much as possible to yours. Something that works well in real estate is likely to have little effect on Internet beverage sales or software trading . Always test the success strategy that you think you have recognized and optimize it with your own experience in practice.

Why does survival bias influence us?

The human brain is configured, for evolutionary reasons, to identify variations or exceptions. That is why we are fascinated by the stories of people who rose from the lowest to the highest, and we remember information about successes better than information about failures. Most of us, after all, are not part of the winning elite.

Since success stories sell very well, the media fill the platforms with news of this type and thus reinforce our tendency to remember mainly the stories that end in successes.

Plus, focusing on positive stories brings a sense of control . We want to believe that there are recipes for success. Recognizing the effect of survival bias means being painfully aware that such universal formulas probably do not exist, but that luck, chance, and individual factors play a decisive role in the results.

How to actively identify survival bias

Survival bias is a cognitive distortion that must always be taken into account in marketing strategies. Whether it's analyzing well-known brands or the data itself, survival bias can disrupt companies' ability to evaluate. Fortunately, however, it is not an unavoidable sentence, nor does it make studies and analyzes lose their validity. Once survival bias is taken into account in marketing strategies, its effect can be avoided:

• Questioned the testimonies of success. Can it even be said that there is a causal relationship? Is it rather an exception? How likely is it that the same result will occur if the methodology is copied?
• Expand your observations. Check from the start that your A / B tests, surveys and data collections do not only include survivors , but all cases for which you have data.
• Ask yourself more often why? . Many marketers tend to focus on how : How did others do it? How can we achieve our goals? Analyzing both your own results and those of others is a much better way to get closer to your goals than superficially copying supposed infallible formulas.

Note

Besides survival bias, there are also many other cognitive biases that every marketer should be aware of. We present the most important ones to you, such as the anchor effect, the halo effect, the lure effect, the confirmation bias, the hindsight bias and the selection bias.

---