What Is Hindsight Bias?

How Does Hindsight Bias Apply to Marketing?

Henry Foster
Last updated: Aug 14, 2020
Originally published: Apr 11, 2019

Also Known As: The "knew-it-all-along" effect, or creeping determinism.


Hindsight bias happens when someone sees an event as predictable and happens as they guessed it would, even if they have little to no objective reason for making that prediction.

Hindsight Bias Examples:

Honest Marketing: When marketing to customers, you need them to hit a point where they select your product or service and are later so satisfied that they congratulate themselves. These customers are genuinely happy that they bought your product as they feel that the value they receive was worth more than the price they paid.


In fact, you want them to be at the point that they they are telling their friends, “I knew this would be the best company to buy X from.”

Discounting: Businesses may assume that discounts increase revenue. This may be the case, but there are also adverse effects. For example, you may condition customers to expect discounts, meaning that they will only spend money when there is a sale.

Now when you try to take discounts away, your revenue may drop dramatically. This is exactly what happened to JC Penney’s revenue in 2012.

Inconclusive Experiments: If marketing experiments are not set up properly, it’s easy to identify something as a “win”, fudge numbers, or simply be left with inconclusive data. Then, as you look back on the results, you’ll use hindsight bias to justify why things happened the way that they did.

This is why it’s best to establish guidelines on what is successful and what is not.

For example, say I set up an experiment to see if including an image in my email newsletter increases click through rates. If the CTR increases for the newsletter with the image in it, I may automatically assume that the campaign was successful because of the image.

However, I have not considered the subject line, call to action and a variety of other factors that may have contributed to the increased CTR. This is why it’s important to add objectivity to your ideas and properly set up campaigns.

See Also: Curse of knowledge, Egg of Columbus, Historian's fallacy, Memory conformity

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Henry Foster

Henry Foster is a digital marketer from Boston, making money for B2B companies by generating leads via paid search and social.

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