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Input bias and how to compete when the best trader is artificial intelligence, what we know from psychology


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traders represented with hands outstretched to each other through the telephone

In his book The Coming Wave, Mustafa Suleyman predicts that AI will be able to successfully build business in a few years. You should just write a query like: “Go make a million dollars on Amazon in a few months with only a $100,000 investment.”

How?

Well, says Suleyman, AI could research trends on the Internet, find what’s selling on Amazon, generate product images and send them to manufacturers on Alibaba.

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The AI ​​could then “email back and forth to refine requirements … and constantly update marketing materials and product design based on customer feedback,” Suleyman writes.

In other words, it will make my job in marketing (and most jobs in business) irrelevant. This leaves those of us who work in companies large and small in crisis. What are we going to do? Why would businesses need marketers if AI can make a million dollars on Amazon without human help?

I would soon become like the London gaslighters of the 1800s or the porters of the 1900s—unnecessary and redundant. Except I think there is a get out of jail free card. I think there is a way to stay relevant in a world where the best marketer is AI.

Want to stay relevant? Use input bias

So what’s the secret to staying relevant? To explain, I must introduce a well-documented psychological phenomenon: input bias.

Input bias suggests that customers prefer products and services that require a lot of effort, money, or time to create. Nancy Harhut neatly describes this bias in her book Using Behavioral Science in Marketing.

She writes, “The quantity of input becomes a substitute for the resulting quality. While in some cases there is a direct relationship between how much time and energy is invested in a project, in other cases there is not. However, people are not always good at recognizing the differences. As a result, they may automatically assume that more effort equals better performance.”

For example, suppose I am told that my favorite restaurant is staffed by an Italian family with 80 years of experience. In that case, I’ll rate their pizza more affordable than the exact same pizza made by a machine in a German factory.

This is the input bias in the game. We all prefer products or services that require effort and experience. That’s why we love to hear or read about the hard work that powers our favorite brands.

Factory tour studies prove this. The paper “Pulling back the curtain” found that purchase intent increased by 60% after a customer saw behind the scenes.

input bias represented by beer

We also appreciate our own efforts. Two scientists from the University of Oxford discovered that opening wine with a cork intensifies its flavor by 4%. When participants were told that the wine was corked but did not open it themselves, this perceived quality and taste improvement disappeared.

input bias represented by wine

I even ran my own experiment to see if I could take advantage of input bias.

I host Nudge, the best marketing podcast in the UK. Over 350,000 marketers tuned in to my show to learn from my guests, garnering 482 five-star reviews. Sharing the effort I put into my podcast made my Reddit ad 45% more effective than a control ad.

input bias for ads

What to take marketers? You need to show how much human effort has gone into your offers.

Show how many engineers worked on your product. Celebrate the years your team has spent developing your craft. Potential customers need to know that you are creating something of high quality that can outperform quick fixes like artificial intelligence.

How traders Drunk AI

Before I close this post, I want to get back to bots. Facebook has developed an AI that is smart enough to manipulate and convince people. His name is Cicero.

Cicero was made by Meta to play a complex board game called Diplomacy. A mix of risk and poker, this game involves planning complex strategies, where backstabbing and deception are vital.

It’s easy to see how bots designed to manipulate human emotions can create engaging ads and persuasive pitches for new products.

What makes people different? It’s an effort.

Consumers will continue to prefer products and services with higher input levels. A potential CRM will prefer a sales deck created by a diligent saleswoman over an identical offering provided by human-grade AI.

An Instagram scroller will appreciate the artwork of the Mexican sculptor who documents each stage of her process through the same artwork created by LLM.

The solution to this marketing crisis is reassuringly simple.

Show the hard work put into service. Highlight the hours devoted to its creation. Take the time to create campaigns, ads, emails or content full of effort. Your customers can see how deeply you, as a retailer, truly care.

In the future, there will be more hyped AI offerings like Cicero that we will have to compete with. Input bias is one essential tactic to stay ahead of technology and future-proof our businesses in a world where artificial intelligence can quickly make millions.



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