- [00:07] Today’s behavioral economics foundations episode is about familiarity bias.
- [02:30] The subconscious brain makes decisions using rules of thumb based on predictability. It likes to know what is coming next so it can keep the reins which means it has a strong bias toward things it is familiar with.
- [04:03] What matters is knowing that the more people become familiar with things, the more likely they are to prefer them; to have a bias toward them.
- [04:22] Studies have shown that our bias toward the familiar can make it so we make worse bets, that we invest in the wrong things, that we will be more likely to hold out in jobs that we have outgrown or keep pouring money into projects we should have let go of.
- [05:49] That new job opportunity or relationship or project or apartment or whatever else is presenting itself will probably be scary at first, but that doesn’t mean it is bad or wrong. Embrace the feeling and jump in knowing that soon it will be like that song you hated the first time you heard it.
- [07:54] Eventually, and much faster than you think, this will become familiar—the new normal. You will adjust. Look at how so many people adjusted to working from home or wearing masks during the pandemic.
- [09:07] Is there a “way you’ve always done things” that feels like you can’t change it but might just be familiarity bias?
- [09:48] Awareness of familiarity bias can help you ask that question when you feel hesitant to take a step in a new direction.
- [11:59] Don’t be afraid to reuse an ad a few times, people might like it more as they continue to see it.
- [13:47] You don’t have to constantly feel the pressure to reinvent the wheel.
- If something worked, keep doing it! Maybe you want to do a slight tweak to see if you can improve on a good thing, but if it ain’t broke, don’t throw it out and start on something new.
- [15:43] It’s ok to prioritize an important project now and let something else that is doing fine sit on the shelf a little longer. It may be becoming familiar and making your customers like it (and you) even more with time.
- [16:58] Some things are not going to benefit you if you change them up. They could actually be a detriment.
- [17:40] When you are feeling like you’ve done something a few times so people must be getting bored with it and they’ll leave if you don’t do something new and fresh, remind your conscious brain that people like familiarity!
- [18:09] If you have anyone, customers or team members (or family members!) who hate the idea of a change and fight or resist at first, give it a little time to let familiarity bias set in.
- [19:21] What do you have in your business that is best to keep familiar for your customers?
- [19:48] Melina’s first book, What Your Customer Wants and Can’t Tell You is officially on presale and available on Amazon, Bookshop, Barnes & Noble, Book Depository, and Booktopia. Buy today and be one of the first to receive a copy when it officially launches May 11, 2021.
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Past Episodes and Other Important Links:
- Episode 51: Time Discounting: The I’ll Start Monday Effect – My Favorite Concept!: A Behavioral Economics Foundations Episode
- Episode 35: NUDGES & Choice Architecture: Introducing Nobel-Winning Concepts: A Behavioral Economics Foundations Episode
- Episode 142: Status Quo Bias: Why Change Feels Terrifying, a Behavioral Economics Foundations Episode
- Episode 16: Framing: How You Say Things Matter More Than What You’re Saying
- Episode 144: Disney: A Behavioral Economics Analysis
- Episode 147: What Your Customer Wants and Can’t Tell You: All About Melina’s First Book
- Preference and Belief: Ambiguity and Competence in Choice under Uncertainty
- Ambiguity aversion and familiarity bias: Evidence from behavioral and gene association studies
- Familiarity Bias PART I: What is it?
- What Is the Average Rate of Return on a Direct Mail Campaign?