186: Is the Dunning-Kruger Effect Costing You Commission?
Over the past 20 years, social scientists have been documenting the phenomenon that those who know the least about many topics actually have the most confidence in their understanding of them. According to the Dunning-Kruger effect, not only is ignorance bliss; it’s also incredibly deceiving.
Even without scientific research, this shouldn’t be surprising. In an era where propaganda spreads faster than ever, people with no personal topic expertise cannot be budged from their views on controversial topics about which they have shallow knowledge. That goes for sports refereeing and geopolitical conflicts, parenting strategies and medical practices, dietary choices and government policies.
And it applies to auction marketing. The auctioneers most opposed to online bidding are those who’ve never tried it. The same goes for many of the retail innovations that progressive auctioneers are implementing.
These naysayers are like the eight-year-old boy who emphatically declares that kissing a girl is gross.
“Just give ‘em time,” older, wiser kissers reply.
The more insidious Dunning-Kruger impact for most people who’ve read this far is in the smaller decisions, the day-to-day choices we make while assuming we know better. We’re more like the teenager who knows the opposite sex is attractive but makes poor assumptions in how to attract them and build stable relationships with them. Their words and actions make sense according to what they know.
The problem: we don’t know what we don’t know. Worse (as proven by the Dunning-Kruger effect): we assume we do. We could be wasting advertising dollars, missing motivated bidders, and selling things for less than they’d be worth with better marketing—and not even know it.
Success blinds us most of all. We assume that prowess in one aspect of life or business qualifies us as universal experts. If we’re not that brash, we at least leverage our accomplishments to get others to acquiesce to our opinion. We point to the letters behind our name or the number of auctions under our belt to support our strategy. We assume our instincts are educated enough to trust.
Even a market leader can be wrong. Decca Records passed on the Beatles; twelve different publishers rejected J.K. Rowling’s Harry Potter; Xerox chose their photocopier line instead of their groundbreaking Alto personal computer to be the business machine of the future.
The marketplace is constantly changing—seemingly at a faster pace than ever. Nobody can be omniscient in any field, let alone multiple ones. Specialized experts, sure. Immutable executives, no.
That’s why we have to be gathering data constantly about our processes, our advertising, and our clientele. We must consult our analytics, even if we choose not to follow its trajectories. We have to continually expose ourselves to new ideas, emerging technology, and even opposing viewpoints. We need to be absorbing books and blogs, podcasts and TED talks, conferences and continuing education.
If you’re like me, you need your ego confronted, your ignorance educated, your status quo challenged. That doesn’t mean we can never be confident in our decisions, just that we must be willing always to question our assumptions. As you can see in the Dunning-Kruger chart, we can gain confidence in our experience as we push far past common knowledge. We can earn the right to be voices for our beliefs.
Ironically, if we keep evaluating our work and questioning what we know, we can grow confident that we got the most and best for our sellers—and the biggest commission possible.
Stock image purchased from iStockPhoto.com
Chart image linked to source