Role of Survivorship Bias in Marketing
What is Survivorship Bias?
Survivorship bias happens when we concentrate on strategies or plans that were “successful,” while overlooking those that were unsuccessful because of their lack of visibility.
How it is Important for your Business?
The world of startups is full of successful stories of who made it, how, and why. What rarely gets shared are the stories of startups that were unsuccessful and died following the exact same path of success. If you are to studying car rideshare startups, to avoid survivorship bias, you should not only study the difference between Uber and Ola, but also Sidecar, Split, and Bridj.
Role in Marketing
Let’s say that you’re doing market research for a digital camera company. You are trying to determine if the new camera should include a in-built flash or not. When you analyze all camera models that were profitable over the past year, you see that only 10% have a in-built flash. Based on this, you may make a decision that a in-built flash should not be included in the new camera model we are designing.
However, what if in the unprofitable segment of DSLR cameras, only 1% have in-built flash? If I know this data, it may make more sense to include a flash on the camera we are designing. Looking only at the winners has made us blind to the reality of the situation. We must asses both the winners and losers for the most realistic conclusions.
