Optimisim Bias

Evaluating

Optimisim Bias

This bias stems from our need to feel in control of our lives. We tend to overestimate our chances of a positive outcome which can lead to heightened sensitivity toward failure . Increased expectations can lead to negative experience if needs are not met.

For Example

Most people do not achieve success with their first business or lack the necessary funds, yet they persist, driven by optimism bias. They believe that they will defy the odds and achieve success, continuing to invest all their financial and cognitive resources into the venture. This overestimation of their chances of success leads them to ignore potential risks and negative outcomes, resulting in continued commitment to a project that may not be worth it.

Similar Biases

Planning Fallacy

We tend to remember tasks and goals that are not completed.

Discovered

Neil Weinstein

Introduced

Neil Weinstein in 1980 Unrealistic optimism about future life events

Source

Weinstein, N. D. (1980). Unrealistic optimism about future life events. Journal of Personality and Social Psychology, 39(5), 806-820.

Authors

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The Evidence

Optimism Bias in Risk Perception: Adjusting Estimates of Negative Events

Researchers asked participants to rate their chances of experiencing various negative events, such as getting ill or being burgled. After participants estimated the likelihood of these events, they were provided with the actual statistics and asked to reevaluate their initial estimates. The results indicated that when participants' initial estimates were below the actual statistics, they made minimal adjustments to their answers. However, when participants overestimated the likelihood of a negative event occurring, they significantly lowered their revised estimates. This pattern highlights a cognitive bias in risk perception and the tendency to maintain optimistic views even when confronted with contrary evidence.

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Source

The Evidence

The Influence of Optimism Bias on Student Loan Repayment Estimates

In a study conducted in New Zealand, students were asked to estimate how long it would take to pay off their student loans. The findings revealed that students were overly optimistic about their starting salaries and future expenses, leading them to estimate that they would repay their loans within 10 years. However, government statistics indicated that the actual average repayment period is significantly longer. This optimism bias influenced students to take out larger loans, underestimating the financial burden and duration of repayment.

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Source

The Evidence

Demonstrating Optimism Bias: Tali Sharot's Audience Experiment

Tali Sharot conducts an experiment with her audience. At the beginning of the lecture, she explains what optimism bias is and then announces a break for snacks. Despite a note on the vending machine outside the auditorium warning that it sometimes eats money, people still chose to use it. This behavior demonstrates that even when aware of optimism bias, individuals still fall victim to it, overestimating their chances of avoiding negative outcomes.

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Source

Affected Problems

Check the problems below the bias can help you fix in customer experience

Features

Price

Time

Experience

Optimism bias can complicate the process of relaying warning information to customers, as individuals tend to believe that negative events are more likely to affect others rather than themselves. This can leave customers feeling blindsided when adverse outcomes occur, resulting in a significantly worse customer experience. To mitigate this, it is crucial to communicate risks clearly and effectively, emphasizing the relevance and potential impact on each individual customer to foster awareness and preparedness.

Efficiency

Challenges

Customer Experience Pillars

Application Touchpoints

Interfaces where it can be applied most efficiently

Behavioral Blog

Use Cases

Check the use cases to inspire the application of this behavioral bias

View all

Msheireb Downtown Doha. Customer Loyalty Program Experience Journeys

We revamped Msheireb's loyalty program by redesigning tailored customer journeys for residential tenants, visitors, and commercial tenants. This project included mapping out key stages—such as discovery, lease, and renewal—across all segments to enhance engagement and ease of use. Each journey was captured in an animated video to illustrate the improved CX flow, ensuring a seamless and satisfying loyalty program experience.

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Msheireb Downtown Doha. Customer Loyalty Program Strategy

We developed a comprehensive loyalty program for Msheireb Properties in Qatar to boost customer retention and drive revenue. The program featured a 9-stage customer journey, segmented by customer archetypes, and incorporated a closed-loop feedback strategy using NPS, CSAT, and CES surveys. Key initiatives included defining member levels, benefits, and a phased implementation plan to enhance customer experience and program viability.

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Teyaseer. Elevating CX with Real-Time Customer Feedback Integration

For Teyaseer, we mapped a 9-stage customer journey from awareness to handover, integrating NPS, CSAT, and CES surveys to capture real-time feedback via email, SMS, and calls. Automated triggers ensured timely feedback collection, enabling immediate insights and actions to enhance CX at each touchpoint.

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Aldar Hospitality. A Comprehensive Approach to Customer Experience (CX)

Aldar Properties sought to enhance customer experience across five hotels from their hospitality portfolio. Analysis of touchpoints, design of journeys and playbooks, COVID-19 game plan and other efforts led to immediate improvements in service interactions and long-term strategies for boosting guest satisfaction and loyalty.

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Aldar Education. Transforming Customer Experience (CX) through the Admissions Process

Aldar Academies revamped their admissions process by assessing the existing workflow and designing a more efficient future process. This overhaul reduced process time by 88 hours, cut complexity by 3%, decreased effort by 34%, and increased automation tenfold, streamlining operations and enhancing overall efficiency.

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Aldar Academies. Designing Escalation Strategy for Education

Aldar Academies developed a comprehensive escalation strategy to enhance customer support operations. This strategy introduced an 8-level priority system, 4 escalation stages, and a detailed escalation matrix to streamline case management and ensure timely resolution of issues.

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Wasl. Voice of Customer (VOC) Strategy Development

Implemented a comprehensive Voice of Customer (VOC) strategy for Wasl, analyzing four distinct customer types and covering 100+ touchpoints across customer journeys. A closed feedback loop was established to drive continuous customer insights, enhance service delivery, and improve overall satisfaction.

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Wasl. Customer Experience (CX) Journey Mapping in Real Estate

Defined over 90 stages and developed 18 detailed customer journeys for Wasl, spanning residential, commercial, and land leasing categories. Conducted four workshops to align stakeholders on improving customer-centric experiences and optimizing processes for future journey enhancements.

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Wasl Mobile App & Self-Service Digital Transformation

Developed over 500 wireframes and conducted a comprehensive audit of 300+ screens to optimize Wasl’s digital platforms. Created two digital strategies to streamline user journeys, focusing on a super app versus specialized apps to enhance customer experience and operational efficiency.

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Wasl. Customer Service Design for Real Estate

Renascence conducted a comprehensive customer service analysis for Wasl, a leading real estate developer in Dubai, to drive digital transformation and enhance customer experience through data segmentation, pain point identification, and strategic recommendations.

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