A Marketing Lesson From American Idol

Have you noticed how often incompetent people are supremely confident? Not just auditioning for American Idol, but throughout life?

Professor Justin Kruger and graduate student David Dunning of Cornell University studied this effect in their 1999 paper, Unskilled and Unaware of It. Their conclusion: those who knew the least rated themselves most knowledgeable, and those who actually understood the topic were far less sure of themselves.

This result has been confirmed in multiple follow-up studies involving several skills and fields of expertise. It is known as the Dunning-Kruger effect, says marketing consultant Chuck McKay.

Which begs the question: why does this happen?

Answer: the basic skills and awareness needed for competency are exactly the same skills necessary to evaluate the competency.

Their lack of knowledge (incompetence) prevents them from recognizing their lack of knowledge (incompetence). People don’t know what they don’t know. They don’t even know where to look or how to look at it.

And it doesn’t dawn on them that skilled performers DO know this stuff, until they’re exposed, dramatically to their own ignorance. Until then, they delude their incompetent selves into illusions of confident competency.

If you’ve ever wondered how:
• people who can't articulate the issues, still feel confident casting their vote (or making inflammatory statements);
• how people with no experience teaching, know exactly what's wrong with our education system; and
• how those who have never studied investing, can blithely plow their life savings into the real estate market
Incompetence leads people to make poor choices. Incompetence prevents them from realizing they make poor choices. This is the Dunning-Kruger Effect (DK). On the other end of the DK continuum, competent people tend to rate themselves lower than they should. Their internal voices seem to say, "Hey, everyone knows this."

The dumb get confident; the intelligent get doubtful. And to a greater or lesser degree we're all guilty.

How Biased Feedback Makes it Even Worse

Imagine a typical Friday night in any typical neighborhood watering hole. The regular crowd shuffles in. One of them, Miss Karaoke Singer, is recognized by the rest as being the "best" in the club.

What kind of feedback does she get?

Do any of the other contestants tell her that her breath control is bad, her vibrato unnatural, or mention the odd affectation she's developed? Hardly. They don't know anything about nuanced performance. Since the only feedback she gets is positive, she thinks she's good.

Good? No, FANTASTIC! The Dunning-Kruger effect helps her to believe she's ready for American Idol!

Then comes the audition.

The judges tell her she's a poor singer. Her own incompetence prevents her from understanding what they're telling her. These judges must be stupid. After all, she just gave a great performance.

She gets angry. Tells off the judges. Not because she's defending herself. Not because she's trying not to look bad in front of her supporters. But because she's completely incapable of understanding just how bad she is.

Advertising That Doesn’t Work Probably Has More to Do With Dunning-Kruger Than Advertising

Much like our karaoke singer, every city has an advertiser who, rather than admit his advertising strategy and execution are flawed, convinces himself that advertising doesn’t work.

Does anyone in Mr. Businessman's entourage tell him his ads have nothing substantive to say? That they don’t speak to the buyer in natural language, and instead just spew out ad clichés like "fast, friendly, service?" Does anyone tell him that putting his kid and his dog in the ad won’t convince anyone to buy things from him?

Or more technically, does anyone tell our businessman that his ads don’t have enough frequency to make an impact? That he’s using the wrong medium? That his competition has effectively co-opted his position?

No. His friends get a kick out of seeing him on TV, or in the paper, or on radio, and the only feedback Mr. Businessman gets is positive. He thinks he's good.

Until he sees his sales figures. Plummeting or flat-lined sales force a confrontation with reality, and it’s the rare businessman indeed who doesn’t address his frustration and anger at advertising medium - or on advertising in general. Hence, the near-ubiquitous refrain of: "I tried advertising and it didn’t work."

Unfortunately for Mr. Businessman, if he doesn’t want to follow Miss Karaoke Singer back to waiting tables, he still needs to get more customers. And fast!

How Small Clients Can Get the Best Ads And Grow to Become Big Companies

The thing about big fish / small pond business owners is, they often believe their success in one field translates to competency in almost everything else. Rather than leveraging the expertise of their ad man, they’ll bully him until they get the kind of ads they want - ads full of Dunning-Kruger-esque follies.

But sometimes business owners who are genuinely good at what they do manage to overcome the Dunning-Kruger effect. They find a professional to bring to them the same hard-won competency and expertise they offer to their own customers.

Its much like what happens when a truly talented singer gets on American Idol: with the right direction and promotion, some dreams do come true.

What about you?

Are you an average karaoke singer? Or a true star in search of the right stage and the right spotlight? Knowing which is critical when you're fishing for customers.

How People Make Buying Decisions

The most important purchase you get from a customer is the second purchase.

Why? Because a two-time buyer is at least twice as likely to return and buy again as a one-time buyer, says marketer extraordinaire Jamie Turner.

So then the question becomes, "How do I get a one-time buyer to become a two-time buyer?"

Typically, that involves a combination of good customer service and the good sense of value. A good sense of value is achieved when a customer feels as though they're getting more of your product or service than they paid for.

For example, a Mercedes Benz is typically twice as expensive as a Volkswagen. Given that, you might assume that Mercedes Benz' market share would be significantly less than Volkswagen's, but it's not. They're almost equal (1.9% for Mercedes Benz vs 2.2% for Volkswagen).

Why? Because while a Mercedes Benz is twice as expensive, the perceived value is 2.5 to 3 times greater than a Volkswagen's. Customers who pay twice as much for a Mercedes Benz feel as though they're getting 2.5 to 3 times more value for their purchase.

See how that works?

How all This Relates to You
When you're thinking about how to sell more of your products and services, you can start by understanding how people make buying decisions.

Remember, most people make buying decisions in one of three ways:
With their gut
With their heart
With their mind

People who make decisions with their gut are intuitive, non-linear thinkers. They don't analyze a purchase in a structured "A...B...C" way as much as they analyze a purchase in a less-structured "A...Q...Z...Y...C...oh, look, there's a bird outside my window" way.

People who make decisions with their heart are driven by emotion. If your target market is driven by emotion, you'll want to work extra hard on establishing a strong, meaningful brand.

People who make decisions with their mind are logical, linear thinkers. If that's your target market, you'll want a feature-oriented, benefits-based marketing campaign.

Five great ways to take social media offline

Nothing is more social than hundreds of people, alone at home, signing into Twitter for a midnight snack of connection, right? Unfortunately, while many companies have given the green light to ‘do' social media, setting up Facebook Pages and Twitter accounts, this pursuit of social media greatness appears to be creating a sort of temporary amnesia when it comes to the more traditional aspects of relationship building. What about the power of touch or shared oxygen?

The truly thrilling frontier is a place where online and offline connections exist in tandem, not in isolation, says Anne Buehner, Associate Social Media Strategist at Red Door Interactive. Smart marketers will begin to put forth campaign ideas and social media tenets that not only dissolve the divide between on- and offline communities, but extend and synthesize stakeholders to connect with brands and one-another at multiple (digital and physical) touch points.

Here are five ways that companies can start moving in this direction:

1. Promote and recognize your social media community in-store. From store windows and t-shirts to receipts and napkins, companies are taking advantage of every opportunity to remind their customers that they're on social media networks. For example, Red Door client Charlotte Russe recently launched an in-store campaign that included signage and window displays featuring Facebook comments, tweets, and photos from social media fans. A mobile and QR Code sign up made it easy for customers to become a part of the social community while still in the store.

2. Create a live experience and provide a way for participants to promote it for you. The Jeep Rocks & Road Tour organized various off-road course events across the country that put people behind the wheel of its new model SUV. After going through a variety of terrain - including a nearly vertical slope - participants were given the opportunity to record a video recounting their experience and could automatically post it on their own social networks. To rev up the momentum of this campaign, Jeep also posted a few of these videos on its YouTube channel.

3. Facilitate Meetups to bring your community together for events in real life. Social technology blogs such as Mashable and TechCrunch have both created MeetUp groups in an effort to bring members of the community together. For its fifth anniversary, TechCrunch encouraged its community of "crunchies" to gather face-to-face and utilized meetup.com as a channel for folks to connect and plan events in their respective cities. In addition, Mashable encourages its readers to meet monthly in more than 1,150 cities around the world.

Similarly, tweet-ups bring a Twitter community together for a live event or mixer. Not only does this provide an opportunity to meet face-to-face with followers, but it can increase awareness of a brand and Twitter account. Attendees are also encouraged to tweet live from the events, thus updating their networks about the brand and activities.

4. Engage your online community with an offline scavenger hunt. Rather than offering prizes through online contests, brands can now mobilize followers through hybrid contents that involve offline activities. Last year, Red Door client ESET leveraged the early adopter crowd at SXSW and promoted its anti-virus software through a scavenger hunt that included a photo booth and interactive media wall. In addition, skateboarder Tony Hawk has hosted the "Tony Hawk Treasure Hunt" for two consecutive years and provides his followers with opportunities to win prizes that are hidden in more than 60 cities around the world by posting clues on his Twitter account. This tactic alone helped increase Tony's Twitter followers significantly.

Retailers can also execute similar tactics to spur foot traffic in-store and direct customers to Twitter - or any online community - for exclusive contest information.

5. Encourage check-ins. While the onslaught of location-based "check-in" services may seem overwhelming, there are many benefits to offering incentives for check-ins. Facebook Deals, for example, allows brands to drive those who like their business in-store and customers to Facebook for the deal, thus marrying the on- and offline communities. When consumers check-in to a location from most geo-location applications, it automatically posts to their Facebook and Twitter feeds (if they set up their accounts for social sharing). Thus, check-ins can increase a brand's exposure exponentially.

Vons and Pepsi both put a twist on basic check-ins when they teamed up with Foursquare. The Vons/Pepsi/Foursquare partnership made it easy for consumers to integrate their Vons Club card with Foursquare and receive special savings from Pepsi. Applications like Foursquare provide ample opportunities for business to offer incentives and syncing loyalty programs with social check-ins is a win-win for consumers and businesses.

Consumers are constantly seeking ways to translate their social media interactions into something more tangible. With new and evolving technologies, now is the time for companies to get creative and examine opportunities to extend the conversation, transparently and authentically, into the daily lives of their social communities. By engaging the social media family across multiple channels, platforms and locations, a brand can build and expand a loyal community of enthusiasts.