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No.8 Base Rate Fallacy & Shopping Sustainably

No.8 Base Rate Fallacy & Shopping Sustainably

When we mistakenly judge a situation and fail to take into account all surrounding relevant information, we are using the base rate fallacy.

A phenomenon known as base rate fallacy illustrates how people can sometimes jump to inappropriate conclusions, with significant consequences.

Base rate fallacy or base rate neglect is the tendency for people to mistakenly judge the likelihood of a situation by not taking into account all relevant data. Don't think "99% accurate" means a 1% failure rate. There's far more to think about before you can work out the failure rate.

Lots of brands exploit the Base Rate Fallacy.  For example, when Apple stated that their products were made with 50 percent more recycled material last year, what they actually meant was that 18% of the material in its fiscal 2021 products was recycled or renewed, a 50 percent jump from the previous year's 12 percent.

If you thought 50% of the materials used by apple were recycled, then you failed to account for an earlier premise (50% of the previous years increase), and you committed the Base Rate Fallacy.

There are a lot of opportunities relating to base rate fallacy in-store and online. But you need to be careful not to confuse shoppers or have them distrust you.

Whiter than white

When comparing your environmental numbers against those of your competitors, instead of you appearing to offer a weaker sustainability credential (because you are too honest), highlight where your competitors are exploiting this bias.

Don’t be too white

If there is a better way to communicate a sustainability number or brand aspect then do so. In other words, being totally honest is good, but don’t be over-honest. Communicate with shoppers in the most effective but ethical ways possible, utilising base rate fallacy for good, not bad.

Base rate in context

Provide shoppers with context so that your base rate examples look as attractive and appealing as possible. For example, “Buy 3 get 1 free” Whisper buy 3 (that’s the instruction or order) and shout get 1 free.

Due to the current accountant lead nature of retail, base rate fallacy is a very, very big opportunity and potential problem. Examine the sustainability related numbers you communicate to shoppers and then look at them in relation to base rate fallacy. Could you be doing things better?  Or are you misleading shoppers?

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About Phillip Adcock

My name is Phillip Adcock: I have more than 30 years of human behavioural research and analysis, and have developed a unique ability to identify what it is that makes people psychologically and physiologically 'tick'.

Would you like to know more about how shoppers and consumers think? Download my FREE guide now. Alternatively, check out www.adcocksolutions.com, where there are more FREE downloads available there. Or why not simply email me with what's on your mind?

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Phillip Adcock

Phillip Adcock CMRS
Psychology & Behaviour
Change Consultant

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