What will you choose?

Understanding the Ambiguity Effect

Quick! Pick the newsletter you want to read. You can either choose A or B.

Keep in mind - the one that you don’t pick will be gone forever.

Which one will you choose?

Haven’t you picked one yet? Think about what is stopping you from taking this seemingly unimportant decision.

In the meanwhile, look at what I have in store for you today!

I want to talk about a bias called The Ambiguity Effect. We tend to avoid options that we consider to be ambiguous or to be missing information. We dislike uncertainty and are therefore more inclined to select an option for which the probability of achieving a specific favorable outcome is known.

This effect is why you couldn’t pick between the two newsletters. Maybe, if you had more information about their content, it could have been easier for you.

Don’t worry; you don’t really have a choice. I couldn’t write two newsletters in the given time.

Another example of the ambiguity effect can be - you choosing between 2 shows or movies to watch. If you don’t have access to information like their genre, cast, crew, and their IMDB ratings, would you be able to decide?

The upside of this effect is that you will pick a rated show with your favorite actors.

The downside is that you might miss out on a hidden gem with new but brilliant cast members.

In general, we avoid taking risks on the off chance that it will turn out to be wrong. However, by playing it safe, we might miss out on something phenomenal. Our tendency to avoid risks due to ambiguity is also called ambiguity aversion. This distaste for ambiguity comes naturally to humans. Unfortunately, after much research and trials, we still don’t know the cause of this aversion.

Another school of thought mentions that the ambiguity effect results from a heuristic or a mental shortcut used to facilitate decision-making. It acts as a guideline for describing a general approach to problem-solving. This strategy occurs automatically and effortlessly and can help you conclude quickly. These shortcuts are generally right; however, we risk drawing an inaccurate or misinformed conclusion by using them because we fail to use logic and reason.

It is essential to understand this effect. If we are successfully able to avoid this bias, we will make more well-informed, reason-based decisions.

Why should you care about this effect?

You should care because, even if you have a top-class product but fail to put out enough information, your product will not be the chosen one.

Consumers tend to eliminate what might be good (or even better) choices for products and services merely because they don’t know the brand or haven’t used the service. Researchers believe it happens because consumers want quick, effortless decision-making and problem-solving. Thus, they wish to conclude quickly, regardless of whether that conclusion is inaccurate or misinformed.

Therefore a better understanding of this effect will help you market your product/service better. Here are some tips that you can use to counter this effect -

(a) Relevant information is the key - You should start by checking out your various competitors. Find out what information they are providing and make a list. Provide every bit of information they are providing and then some more. Don’t leave room for any doubts in your customer’s mind. Weave in your reassurances naturally into the flow of information, or list them all separately in a FAQ section.

(b) Hidden but accessible - If you have a complicated niche that requires a bunch of information, don’t overwhelm your customers by dumping all the information out there. Give them an option to know more or read more. You can have a separate page on your website your customers can visit for more information.

(c) Real reviews to the rescue - Social proof is one of the most prominent trust factors there is. Ensure that you collect testimonials or encourage your customers to review your product/service on a third-party review site.

Remember, honesty is the best policy, even in marketing. Transparency and honesty should be at the core of your marketing strategy. If your information is not in line with your product/service, you might not even be an option.

Some quick takeaways -

• The ambiguity effect is our tendency to avoid options that we consider ambiguous or to be missing information.

• This effect occurs due to our natural aversion to ambiguity.

• A better understanding of this effect will help you market your product/service better.

One last thought…

If you have a new product or are a young company, you might be at an unfair advantage due to the ambiguity effect. Some of the best ways to reverse this are communication and personal interactions with your customers.