In WWII, Allied planes would often return to their bases with hundreds of holes from enemy guns. This inspired crafty ground crews to bolt on metal plating over the holes to strengthen the planes and prevent future losses. They assumed that the evidence clearly indicated where they should place the extra protection.
But one American scientist wasn’t so sure… Abraham Wald, a brilliant mathematician and statistician, intervened and pointed out that while the surviving planes had been hit severely, they were still able to fly safely home.
He urged the military commanders to add more armor to the parts of the plane where there was NO DAMAGE. Wald theorized that the planes that didn’t make it back must have been hit in different places than the planes that did make it back.
In other words, it was the other parts of the plane that needed reinforcements – not the parts with obvious holes.
Enlightened commanders adopted Wald’s recommendation and his brilliant intervention would end up saving the lives of thousands of Allied airmen.
Survivorship Bias: A Universal Human Error
Wald’s mind-blowing theory about the bombers’ weak spots is a classic example of survivorship bias. This is actually a common human error that leads us to pay more attention to survivors and “winners” instead of trying to understand the failures.
Almost everyone has survivorship bias without realizing it. Our entire global culture is about celebrating winners and forgetting the losers.
As author David McRaney writes in his amazing article on Survivorship Bias: “If you are thinking about opening a restaurant because there are so many successful restaurants in your hometown, you are ignoring the fact that only successful restaurants survive to become examples. Maybe on average 90 percent of restaurants in your city fail in the first year. You can’t see all those failures because when they fail they also disappear from view.” As Nassim Taleb writes in his book The Black Swan, “The cemetery of failed restaurants is very silent.”
Think about these other examples of how you (and millions of others) focus solely on “survivors:”
Many children grow up wanting to be famous. After all, the rock stars and TV stars they see everyday are all famous. So, there is plenty of opportunity, right? The truth is that famous actors, musicians, comedians, etc. are only the ones who ‘made it.’ They survived the auditions, the competition and let’s face it – had some good luck or God-given talent. But, what about the millions of others who tried and failed to win the audition, to get that starring role in a sitcom, to even make it past a casting agent? This is a prime example of how we tend to obsess on and worship the winners, rather than the losers. If you understand survivorship bias and you truly want to be a rock star, then you would be better off interviewing failed musicians to understand how they veered off the road to success.
The most common question that people who live past their 90’s receive: “How did you do it?” One senior citizen could say they never smoked or drank one drop of alcohol in their life. Another might answer that they drank often, smoked everyday and ate whatever they wanted.
Whatever the answer, it doesn’t matter.
Because, we really should be looking at the millions of other senior citizens who DIDN’T make it past 90. What did they do that prevented them from reaching 90? What could you learn from them to stretch your own lifespan?
The fitness and health industry is notorious for profiting from people’s survivorship bias’. Consider how many weight loss success stories you see promoting a certain workout, diet, or even the advice of a fitness guru. It’s easy to fall for these testimonials and believe that these extraordinary claims produce consistent results.
Reality Check: These commercials not only show the survivors, but the super-survivors. The extreme and rare positive outcomes, like the person who lost 50 lbs in just a month. At the same time, they hide the failures and even the normal results, like the participant who lost a more stable 5 lbs in a month.
Survivorship Bias is Also Rampant in the Hotel Industry
Think about it.
We have survivorship bias thinking about our own guests and our own hospitality marketing efforts. Most, if not all, of your present data come from the guests or group business clients that successfully made a reservation.
But, what about the people who didn’t?
What about the people who visited your hotel’s website, clicked on a couple of pages, then decided to stop looking and left?
Here’s the truth: The guest intelligence you have right now is most likely misleading, over-optimistic data that only focuses on the people who actually made it to your hotel PMS. Most hotel’s guest data leaves out those people who didn’t ‘survive’ the buying journey. You’re overly focused on your known audience, instead of studying the business you lose.
To thoroughly optimize your hotel’s most successful conversion paths, you need to consider the entire audience, not just those who actually converted. In other words, you need to consider not just what’s working, but what’s not working, to drive bookings.
7 Ways to Prevent Survivorship Bias from Hurting Your Hotel’s Revenue:
1. Stop Copying Successful Hotels
It’s easy to look at successful hotels and think their strategy can be replicated in your market. But also take time to consider the other properties that failed in that same location, especially within the same chain scale level. Find out what went wrong, instead of only focusing on what went right for the survivors.
2. Conduct Loss Analysis on Failed Group Business Bids
Hotels often focus their sales efforts on seeking repeat business from specific groups, their “best customers.” Then, they proudly proclaim their venue is a ‘favorite’ of medical meeting planners, for example. Or, that their business is made up of mostly annual tech conferences. Instead, ask why other groups haven’t booked your hotel? What other industries are you missing out on?
Whenever you lose a piece of group business, the sales person needs to ask the meeting planner, “What went wrong? Why didn’t our hotel win your event?” This simple move could dramatically alter your sales efforts, sending your sales numbers skyrocketing in the future.
3. Discover Which Companies are Visiting Your Hotel Site
You can find out if meeting planners are visiting your website, even if they don’t send a message or fill out an RFP. We at Tambourine (and many other firms) have the ability to identify inbound website visitors by company, enabling our clients’ sales teams to find out which companies are visiting your meetings and event pages. For example, you can find out if someone from Ford or Microsoft started clicking around on your site.
This now-warm lead can act like a trigger for the sales person on your team (in this case, the sales person who is in charge of the Pacific Northwest market since Microsoft is headquartered near Seattle) to reach out to the meeting planning department at that company.
4. Conduct User Testing
Don’t fall in the trap of assuming what customers think about your hotel website. The only way to know how potential guests are interacting with your website and booking engine is to engage random, unbiased users to test it. (Shameless Plug: As part of our hotel marketing services, we implement random user testing for clients, and even provide videotape footage of tester’s live feedback.)
5. Monitor Points of Abandonment
Use your analytics to find out where you start losing potential guests on your website. Do you lose them right on the homepage? Or, when they encounter inconsistency moving from your website to the booking engine? Fixing whatever the problem is means you’re helping more visitors ‘survive’ the purchase journey to book a room.
6. Add More Languages
Your hotel is a global product. Or, at least it could be if you allowed your website to ‘speak’ to global audiences. Right now, too many American hotels only use English on their website. So, what if a family from Spain wanted to book a stay? Or, a group of business people from Dubai? You may think your hotel only attracts American travelers (or that virtually everyone speaks English), but that is survivorship bias at work… you only see English-speaking guests! If your website is only written in English, then only English-speaking travelers book your hotel, which leads you to assume that only English speakers want to stay with you. Consider what adding other language translations could do to attract global travelers.
7. Don’t Put Your Marketing on Repeat
It may seem like a smart strategy to repeat what worked for you last year, but again, this is survivorship bias at work. It’s even smarter to figure out why certain marketing tactics and campaigns failed. Did you have enough resources? Did the campaigns have enough time to flourish? Or, did you back down and just grab the lowest hanging fruit (relying on OTAs)?
It’s vital to know about ALL of your hotel’s online visitors and potential customers – not just those who successfully booked. This gives you more insight into how potential guests and group business clients engage with your hotel in their research phase. Plus, it will help you identify what to fix and where to make improvements. Examining your losses and avoiding survivorship bias can be the pivotal move that will lead to quicker buying cycles and higher conversion rates.
Tambourine uses technology and creativity to increase revenue for hotels and destinations worldwide. The firm, now in its 33rd year, is located in New York City and Fort Lauderdale. Please visit: www.Tambourine.com